Balancing act: Tesla battery system earns university nearly $74,000 in 3 months

A 1.1MW/2.15MWh Tesla Powerpack battery system installed at the University of Queensland has saved almost $74,000 on electricity costs in just three months, and not just by storing cheap solar power.

The UQ’s Energy and Sustainability team this week published a fascinating and in-depth 38-page report on the first quarter of operation for the $2.05 million battery system, titled The business case for behind-the-meter energy storage (pdf).

The results show the battery system – itself paid for using savings from the University’s existing solar systems – generated $73,938 in value during Q1 2020. And it did this not just by storing energy when grid prices were low and discharging when they were high, but also – in fact, mostly – by helping to balance the grid, including jumping to attention when major coal plants failed.

As the report explains, 62 per cent of the value generated by the UQ battery system over the quarter was generated through participation in what’s known as frequency control ancillary services, or FCAS. Another 26% came from the battery’s virtual cap contract, while arbitrage raised 12%.

FCAS is used by the Australian Energy Market Operator to maintain the frequency on the electrical system and, as a behind-the-meter asset of less than 5MW, the UQ battery currently participates in three (of eight) contingency FCAS markets.

These markets require capacity to be available to respond to a drop in system frequency below the dead band threshold of 49.85hz within stated timeframes, and for this response to be sustained until frequency is restored to the normal operating range (usually within 10 minutes).

As the report explains, FCAS providers are paid for every interval in which they are available to respond to a frequency event. So, as illustrated in Figure 3.6, below, when a unit of the Victorian Loy Yang A brown coal plant tripped offline unexpectedly on the afternoon of Friday 6 March taking 558MW of generation with it and causing the NEM frequency to dip as low as 49.751 Hz, the UQ battery did its thing.

“(It) sensed this frequency deviation immediately and was able to switch from charging at a rate of 919 kW to discharging at a sustained rate of 1,099 kW – providing a total of 2.02 MW of ‘generation’ into the network to help arrest the fall in frequency,” the report says.

“This response was sustained for 304 seconds, after which frequency restored to within the normal operating range.”

The provision of this sort of service to the grid has also proven to a big earner for the very much bigger Tesla Big Battery, or Hornsdale Power Reserve, in South Australia, which on Friday revealed a huge jump in revenue for the critical role it has played in keeping the lights on in that state, particularly during the 18-day “separation” when a tornado tore down the main link to Victoria.

FCAS aside, the establishment of the battery system at UQ was a key step in allowing the University to start trading directly in the national wholesale electricity “spot” market – and becoming Australia’s first university to do so.

“We developed a custom control algorithm for the battery that enables us to automatically buy and sell power, 24-hours a day,” said UQ energy and sustainability manager Andrew Wilson.

“It charges our battery when clean energy is abundant and prices are low, and discharges when prices are high – often during the evening peak.

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On this score – arbitrage – the report shows the battery system earned $8,523 in net revenue across Q1; a result the UQ team says underperformed business case expectations just slightly, partly due to a physical fault with one out of 10 of the battery packs.

Of the revenue earned through arbitrage, the data was heavily skewed towards January, when net revenue was almost double the value earned in February and March combined, due to the underlying pricing volatility in the NEM during January compared to the other months.

This is illustrated in Figure 3.5 which shows that although cumulative arbitrage revenue gain was steady across the full quarter, large ‘jumps’ in this revenue occurred as a result of high-priced intervals on a handful of days in January.

“While a simple concept, being able to effectively select the lowest and highest prices in a volatile market such as the NEM presents unique challenges,” the UQ report notes.

“These … include a reliance on imperfect forecasts, as well as what is known as the ‘5/30 rule’ whereby spot prices are set every 5 minutes but financially settled based on a half hourly average.”

Figure 3.2 shows a snapshot of the battery system’s performance on January 04 – the first day of high prices and volatility in the quarter, while Figure 3.3 offers an example of the battery system’s decision making in a different context – discharging during the evening of March 14 despite low prices, to free up space for charging the following day during forecast negative price intervals.

On the whole, however, the team is clearly chuffed with the battery’s first-quarter performance, and confident it will continue to deliver.

“The battery will also pay forward into the future, as the Q1 performance data shows it is well on track to pay for itself within the eight years we forecast,” Wilson said.

There’s plenty of room for fine-tuning, too. The report notes that the battery’s Demand Response Engine, or DRE, was born as a solution to manage not only the battery, but additional demand response initiatives, such as HVAC control, as they were developed.

DRE – a cloud-based, data-driven, supervisory control system hosted within Amazon Web Services – is described by the team as a novel platform in which autonomous, event-driven predictive controllers can be designed, simulated, and deployed across UQ infrastructure to help improve and optimise energy asset operation.

“One of the reasons UQ has committed to publishing the battery’s full performance data (is) so industry and researchers can learn from the University’s experiences,” Wilson said.

Throw in UQ’s soon-to-be-completed, $125 million, 64MW Warwick Solar Farm and the University’s transformation into a “gensumer” will almost be complete.

“The new battery and the solar assets make UQ a significant renewable energy leader, as the whole world looks to chart the path to the new ways we will supply electricity,” said Professor Peta Ashworth, who leads UQ’s Master of Sustainable Energy program.

“Delivering future-focused, sustainable electricity supplies is a really big and important quest for UQ’s next generation of engineers,” she said. “There is no better place to learn about the future of energy than at UQ.”

The University of Queensland’s Energy & Sustainability team is holding a webinar and Q&A,  Report Launch – The business case for behind-the-meter energy storage, at 1pm on Friday May 22. You can register to attend here.

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