Musk says Tesla big battery to pay for itself within a few years, bigger ones on the way

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Musk says Tesla big battery will pay for itself within a few years, and has sparked interest from other governments for even bigger batteries to replace gas peaking plants.

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Tesla founder and CEO Elon Musk says the Tesla big battery in South Australia has been so successful it will likely pay for itself within a few years, and has prompted interest from other governments to install even bigger batteries as a substitute for dirty and expensive gas peaking plants.

Musk, in comments accompanying the company’s latest quarterly results, which showed a small profit for a second consecutive quarter, said the company’s battery storage business is likely to double in 2019, and promised increased production would reduce waiting times for both Powerwall and Powerpack batteries.

“(Energy storage) is going to be a gigantic business,” Musk told an analysts briefing later. There was no comment, and no questions, about the rumoured “mega-battery”, a mooted 1MWh battery storage unit.

The $96 million Tesla big battery in South Australia, officially known as the Hornsdale Power Reserve, and owned and operated by Neoen, has been a stunning success – not just with the speed, versatility and accuracy of its performance, but also its contribution to grid stability and reliability, and its ability to deliver significant savings and make money on its own account.

“While the Hornsdale battery that we built in South Australia is still the largest battery in the world, we have recently received multiple requests to build significantly larger battery projects,” Musk said in the statement.

“The Hornsdale project has generated substantial savings and is likely to pay for itself within a few years.

“This has generated interest from governments and municipalities to invest in large battery storage projects rather than in conventional peak energy generation.

“In addition to providing backup generation and cost savings to businesses, Powerpack units are now used in over 100 microgrid projects across 32 countries.”

Musk said that Tesla deployed 1.04GWh of battery storage in 2018, a three-fold increase over the previous year, and expects it to double again in 2019 as a new manufacturing line at Gigafactory 1 in Nevada boosts the output of both Powerwall and Powerpack modules.

Tesla claimed its average sale-to-installation time also decreased by about 50 per cent in 2018, although local installers in Australia still complain of significant waiting times.

Musk said Tesla sees growth opportunities for its domestic Powerwall battery story unit in North America, Australia and Europe where electricity rates are high and solar panels combined with Powerwall units will help reduce electricity bills.

He expressed confidence that the proposed 250MW virtual power plant in South Australia – originally proposed by the former Labor government and finally embraced by the new Liberal government, will move to its third phase that will lift deployment from the currently contracted 1,100 units to 50,000 units.

“That will provide increased grid reliability and lower cost for all customers,” Musk said, adding that the company’s margins also continue to improve due to increased efficiency of installations. The company recently lifted the price of the Powerwall 2 battery storage unit in Australia and elsewhere.

See also: Musk predicts demand for Model Y could be double that of Model 3.

 

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