Tesla big battery results suggest local storage better than “monster” projects

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New analysis of the performance of the Tesla big battery in South Australia suggests that distributed local battery and pumped hydro projects could offer better value to the grid than a single “monster” project like Snowy 2.0.

The analysis, from energy analyst Hugh Saddler, in his quarterly update of the National Electricity Market for The Australia Institute, will make a useful contribution to the debate over the future of storage in Australia.

The Tesla big battery, known as the Hornsdale Power Reserve, has impressed all observers since it was switched on in early December, with the notable exception of the federal government which wants instead to build the massive Snowy 2.0 pumped hydro project at a cost of $8 billion or more.

Saddler’s analysis confirms earlier reports – see our story Tesla big battery moves from show-boating to money-making – that its speed and flexibility allows it to intervene in high-priced events and “take the straw off the camel’s back.”

Already, the battery’s has eliminated significant price gouging in the small FCAS market, as we reported here. Premier Jay Weatherill confirmed this week that the Tela battery had “smashed” the gas cartel’s hold over the FCAS market, which provides network security.

Its influence on the bigger wholesale electricity market is less marked, because with only 30MW of capacity dedicated to arbitrage, it is still just clipping the peaks of a local grid that can consume up to 3,000MW or more at times of peak demand.

Still, Saddler says, its impact is clear.

“The graph shows a consistent pattern of charging up overnight, when prices are very low (well below $100 per MWh on all three days) and discharging in the late afternoon, when prices are very high ($8,000 per MWh between 4.00 and 4.30 pm local time on 7 February, which is 3.30 to 4.00 pm NEM time, as shown in Figure 11, somewhat lower on the other two days).”

Saddler notes that battery storage sceptics (yes, there is such a thing) often point out that 30MW is hardly more than 1 per cent of the peak demand of 2.9GW on 7 February.

“This is true, but not particularly relevant,” Saddler says.

“The Hornsdale battery is the first of its kind. Planning for a number of others in South Australia, Victoria and elsewhere is well underway.

“Since the capacity requirement for frequency control services is limited, it is almost certain that a number of subsequent battery projects will devote a larger proportion of their capacity to energy arbitrage.”

And, Saddler says, Hornsdale is clearly making the case for distributed storage.

“The experience of operating Hornsdale Power Reserve already demonstrates that multiple smaller energy storage facilities, which will certainly include both batteries and small pumped hydro projects, located close to wind and solar generators, are almost certainly better suited to matching variable supply with varying demand than a single monster project located a thousand kilometres or more away.” he says.

This is a clear reference to Snowy 2.0, which he also notes will only be able to deliver its service via multiple transmission lines “which often reach saturation capacity when demand for electricity reaches peak.”

Snowy Hydro has tried to turn the case for its big pumped hydro project into a battle between its project and battery storage. But its costings of battery storage have been contentious, see The case against Tesla and battery storage just hit peak stupid and so has its estimates of the value chain.

Note: Saddler also defended the AEMO and its Integrated System Plan Consultation, which has been used by critics to call for the closure of the key market institution.

“AEMO is required to think long term, and therefore to consider a wide range of possible futures, in order to do its job of managing the evolving electricity system,” Saddler notes.

You can see live updates of Neoen’s Hornsdale Power Reserve, as the Tesla big battery is know, on its home page here.


  • Ken Dyer

    My mind is absolutely boggling at the asinine idiocy shown by the Turnbull COALition Government. Here we have Turnbull currently in Washington touting our world leading superannuation funds to Trump, no doubt so Trump can build his bloody wall, and buy guns for all the school teachers in America.

    Surely our idiot government can find a few infrastructure projects here in Australia that benefit Australians, and would be an appropriate investment for our trillions of superannuation dollars.

    Superannuation managers take note – people will march out of super funds unless they support renewable energy projects, and not human rights abuses under the Trump Administration.

  • BushAxe

    Graph also gives a good insight as to the impact large scale solar will have in SA meeting the daytime demand with batteries filling in the gaps.

  • Peter F

    Hugh has belled the cat. It was pretty obvious to anyone who looked at either the wind supply curves, the power demand curve or even just the map of the NEM that storage near the load is generally best. If not at the load, near the existing grid and finally at the generator on the existing grid. Most of the storage events will be less than four hours and a few spread out to 12-14. Why anyone would need an expensive 7 day storage plant that is a long way from the load and requiring large transmission investments is a bit beyond me

    • Andrew Scott

      I am not sure whether your question is rhetorical or serious but here is a ten point response to ponder over:

      1. For some loads, such as Large Industrial Plants like Smelters, Coke Ovens Batteries, Blast Furnaces and their Stoves, security of continuous supply of electrical energy is an absolute imperative.

      2. It is necessary to ensure that plant operations continue in a way that is safe, environmentally benign, not causing irretrievable plant damage, and is producing outputs that are adequate to justify continuation of the business.

      3. It is needed not just for a few minutes or hours but for weeks or perhaps even months for some items of plant.

      4. Some examples of critical systems that may be needed are:
      exhausters to avoid gas leaks and explosions,
      pumps to run cooling systems to avoid meltdowns,
      pumps for scrubbers and electrostatic precipitators for environment protection systems,
      blowers to keep heating systems going so that High temperature refractories do not cool below critical temperatures at which cracking and catastrophic failures may occur.
      Un-interruptable plant monitoring and control systems and communications.

      5. Some of these systems may require many tens of Megawatts of Power.

      6. Regarding durations of grid outages:
      When the extreme weather damaged HV transmission in SA in Sept 2016 the western and northern half of the state lost Grid support for days, not hours.

      7. Some of Eyre Peninsula was off grid for almost 5 days.

      8. It is highly unlikely that the capacity of a local battery storage facility, even if very large, will be sufficient to cover operational power requirements of a major industrial plant for more than several hours.

      9. It follows that access to energy from a pumped storage hydro electric facility may be required along with additional HV transmission for security of supply.

      10. The location of Topography suitable for Pumped storage(s) will dictate the transmission distances.

      • neroden

        So, you’re right up through point 2. The rest of what you’ve written is garbage!

        Anyone who’s operated one of these continuous-operation large industrial facilities — and anyone who’s studied them for even a few minutes — knows that the ideal situation for them is *onsite* power supply. They are all installing *local onsite* power in case of grid outages. They *cannot* rely on the grid.

        So they’re installing gigantic batteries. Locally. Along with diesel generators, but the batteries are cheaper to operate. Anything involving transmission wires is simply not acceptable: it will only be used if it’s cheaper but full ON SITE backup is required. Snowy is not an option because if the wires from it fall down, it causes an interruption.

        You really should have turned your brain on before posting the idiocy you posted. You point out that downed transmission lines can take down grid power for days (in point 5)… and then you propose (in point 9) pumped hydro, which is connected through those SAME LINES and would also not work if the lines are down, as if it would be a solution, when it wouldn’t help one whit. This is obviously false and a completely stupid suggestion. Did you think at all before you wrote this tosh?

        • Mike Dill

          I actually thought Scott was doing well until item 9. Local production and storage is critical.

          • Andrew Scott

            regarding points 6 and 7, see my reply to Peter F about increased supply security in the Port Augusta-Whyalla section of the grid but continuing vulnerability for Eyre Peninsula.

      • Peter F

        If there are widely distributed renewables such as the new wind and solar plants now being built at Port Augusta as well as storage in the region then most of the supply will be local so a long grid outage no longer means low power

        • Andrew Scott

          The RE and storage developments in the vicinity of Port Augusta will support the 4 existing HV circuits between the Davenport yard near Port Augusta and the Cultana yard near Whyalla.
          The combination of these inputs and the multiplicity of circuits will benefit Whyalla and Port Augusta in terms of increased security of supply.

          However Eyre Peninsula relies on a single low capacity very old and unreliable 132 KV supply extending south west of Whyalla.
          It frequently fails. Its limited capacity also prevents further wind farm development in the region.
          A long outage of this circuit will continue to mean low power, or more likely no power, for most Eyre Peninsula residents regardless of the RE around Port Augusta.

          • Peter F

            1. I agree that Port Augusta solution is not a total solution but it does solve the heavy industry issues in points 1-6.
            2. As I said storage at the load for example 4 hours stoarge at Port linoln alongside the existing diesel plant would provide much better support on the line and by charging offpeak would reduce peak loads on the 132 kV line and thus reduce the frequency of outages.
            3. distributed storage in effect reduces the constraints of grid capacity because the distributed generation can be used to charge distributed storage rather than forcing all the generation back up the skinny pipe

  • brucelee

    I imagine when more solar comes online, and the state demand curve is peakier, that it will have an even more pronounced beneficial impact.

  • Be

    One day of storage, with at least the first hour or so being batteries, is all most grids will ever need. WIth one day of storage, solar and wind can supply nearly 100% of the demand. They will only need reserve generators for occasional low sun and wind times or for grid faults. Since grid failures are over 99% of all blackouts and electricity disruptions, distributed storage and reserve generators, microgrids, are the key to reliable (resilient) grids. How much storage and reserve generations depends on the critical demands in the microgrid. Solar and wind combined with some batteries smoothout the outputs and stress the grid less. They also allow firm electricity commitments.

  • remoteone

    An aspect of the use of distributed storage which I think needs to be kept in mind is that it adds to the physical security of electrical infrastructure. The feds’ are always banging on about how they are protecting the country from hackers and terrorists yet do little to actually secure our infrastructure from either.

  • Our economically orthodox, IPA-compliant sock-puppet government must never ever commit the heresy of ‘picking winners’!

    To make absolutely sure, they like to pick losers. Big losers.