“Humungous” batteries will be mainstream feature of renewable grids, says Tesla

Tesla chair Robyn Denholm has described the mainstream adoption of grid-scale battery storage in Australia and around the globe as “the key” to replacing emissions-intensive – and increasingly anachronistic – gas and coal power generation with 100 per cent renewables.

In comments on Thursday afternoon at a webinar hosted by RenewEconomy editor Giles Parkinson, Denholm said the development of the newly announced “humungous” Tesla battery being built by Tesla and Neoen in Geelong, Victoria, marked “truly exciting times” in the evolution of the global energy market.

As RenewEconomy reported here, the Victorian government announced on Thursday that French renewables developer Neoen had won the contract to develop what will become the biggest battery in Australia, providing essential services to the Victoria grid.

The 300MW/450MWh Victorian Big Battery will be more than twice the size of the 150MW/194MWh Hornsdale Power Reserve, which was until recently the biggest battery in the world, and was recently expanded to add new synthetic inertia and other key grid services to South Australia.

Like Hornsdale, the new Victoria battery’s hardware and software will also be supplied by Tesla, but in this case using the new 3MWh Megapacks, which Tesla says can deliver a major peaking plant four times quicker than traditional fossil fuel projects.

And while the cost of the project has not been revealed, the Geelong battery will be paid a “service charge” of $12.5 million per year for a 250MW and 125MWh component under a 10-year contract with the Australian Energy Market Operator.

Speaking in the webinar alongside Victorian energy minister Lily D’Ambrosio and Neoen Australia general manager Louis de Sambucy,  Denholm said the size and scale of the Geelong battery project – and the involvement of AEMO in the procurement process – was “very important” to Tesla.

The significance, Denholm said, lay not only in proving out the size and scale of the US company’s energy storage technology, but also to demonstrate the growing capabilities of batteries to provide essential grid services traditionally the preserve of fossil fuel generation technologies like gas peaking plants.

“[The Victorian battery is] roughly the size of a typical gas turbine. So we’re talking that size and scale in terms of the battery that we’re delivering here,” Denholm said.

“And I think with AEMO actually selecting battery technology to provide this service, I think … it gives a nod to the maturation of the technology even over the last couple of years.

“Globally, we’re seeing that batteries are really the key for renewable energies and for … allowing renewables to replace gas and coal generation, lowering energy prices whilst improving the grid reliability and, of course, lowering emissions for the environment,” Denholm said.

“We are seeing a lot of demand because, like the leadership here in Victoria, what we’re seeing is many energy operators around the world are not wanting to renew their fossil fuel-type of turbines,” she added.

“So they want the storage and they want to actually harness the renewable energy that we can use to generate energy for consumers and at the same time lowering the cost.

“So to me, all of those things together and with the advent of new technology and improving technology over time, that that wave of change is happening.”

Denholm also gave a nod to the Andrews Labor government in Victoria for its commitment to meeting a 50 per cent by 2030 renewable energy target as well as net-zero emissions by 2050.

“To me, that takes courage and it’s real leadership in the context of what the environment needs,” Denholm said.

In her own comments during the webinar, minister D’Ambrosio – who earlier in the day described the new battery as “humungous” – said the state’s ambitious renewable energy and climate targets had helped deliver a “really fantastic outcome,” that would be realised “very soon.” (The goal is for the Geelong battery to be ready to go for the Summer of 2021-22.)

“It was only a few years ago that people genuinely thought that really big batteries were … probably 15 years away. Not the case at all. …And we’ve seen that with with communities backing a decarbonised energy system. We’ve seen it with really competitive [tender] processes.

“And the process that AEMO has undertaken on behalf of the Victorian government has really shown that the cost curve of these technologies has come down quite significantly.

“Why wouldn’t you do something like this?” D’Ambrosio added. “The fact remains is that we need a number of tools in our toolkit to ensure that we actually have a well managed transition. So yes, we need more renewable energy. Absolutely. But we also, of course, need to ensure that we’ve got the technologies in place to be able to have a smooth transition away from coal thermal generation, in particular in Victoria.

“It’s also about signalling to industry and the broader sector that the Victorian government and the community understands all of the pieces that need to be put in place, in a well planned way, to enable more investment to come on board.

“So this is a really strong signal to the global market that is always look to Victoria for great leadership and is a good place to invest, that we’re going to continue to be a great place to invest. And this is about enabling more renewable energy to be created and delivered into our system.”