Speed of Tesla big battery leaves rule-makers struggling to catch up | RenewEconomy

Speed of Tesla big battery leaves rule-makers struggling to catch up

Tesla big battery’s dramatic intervention after Loy Yang trip, and a separate 0-100MW injection in just 140 milliseconds, illustrates yawning gap between technologies and market rules. The future is here, but market rule makers are not ready for it.


The Tesla big battery – the world’s largest lithium-ion battery installation – has only been in operation for three weeks, but already it has highlighted just how unprepared the National Electricity Market, and its rules and regulations, are for this new technology.

Most of what Tesla has done in its first few weeks has been for show: a test of its own capabilities for the satisfaction and curiosity of its owners and developers, and a demonstration to other market players of what is possible now, and what is to come.

In those first few weeks it has intervened to show how it can respond to demand peaks, ensuring supply and clipping prices; it has played in the FCAS market (frequency and ancillary services); it has discharged at full capacity (100MW); and displayed its rapid re-bidding and charging and discharging capabilities.


(Some recent events are illustrated in the graphs above from the ever-observant and data-rich Dylan McConnell from the Climate and Energy College).

Last week, in one of its most dramatic interventions, the Tesla big battery responded in an instant when a Loy Yang A unit tripped and sent frequency down below 49.8Hz, the normal trigger point for a reaction from contracted generators.

In what is known as the FCAS contingency market (designed to cater for such sudden outages), the Hornsdale Power Reserve, as the Tesla big battery is known, displayed its speed of response, helping arrest the fall in frequency before leaving and allowing the contracted generators to complete the job.

It was largely for show because the Tesla battery is not an official player in those markets.

It could have done more, as it has demonstrated in testing at other times, including ramping from 0 to 100MW in 140 milliseconds (but not, as some media reported, for the Loy Yang trip), but the fact is there is no market mechanism for batteries to be rewarded for such Fast Frequency Response.

We have to remember that the Tesla big battery exists only because it is contracted by the South Australian government to provide specific services to the local grid, and to allow its owners Neoen to play with some time shifting of wind energy.

But one suspects its remit allows for it to play elsewhere and emphasises the point to the owners of the 20th century machinery that the future is here. The S.A. government is effectively providing a service to the whole Australian energy market by paying the Hornsdale Battery to be available and on-line.

But as far as the NEM and its rule-maker are concerned, the future is not yet here. Or at least they are not ready for it.

Market rules have not yet been adjusted, they still favour the ageing incumbents, and the go-slow mentality on rule changes continues. And it’s a damning indictment on those who should have seen the future coming, because they have been told about it often enough.

This is as true for Tesla as it is for other battery storage developers. Indeed, it is true for the promoters and would-be providers of energy efficiency and demand management, and a whole range of smart technologies that could make this grid more efficient and reduce costs.

The 5-minute settlement rule, designed to favour fast-responding technologies like batteries, has been approved, but will not replace the existing 30 minute settlement rule, designed for slow-moving machinery like coal and gas, until mid 2021.

In the meantime, the rorting of bidding practices will continue, delivering windfall profits to generators who – according to the pricing regulators – are doing nothing illegal but merely exercising their “market power.”

The market for what batteries can also provide, as demonstrated in the Loy Yang A trip, is for fast frequency response. But the market rule-maker, the Australian Energy Market Commission, is still wrestling with these rules.

One could forgive the AEMC had this technology appeared out of the blue, but batteries have been operating and demonstrating their capabilities for several years in other markets in the US and Europe. In Australia, it’s as though they’ve suddenly sighted an alien spaceship.

Many readers of our story on the Tesla battery’s response to the Loy Yang A trip complained that its intervention was minor (only 7MW), brief (a few seconds), and didn’t exactly save the grid.

Screen Shot 2017-12-21 at 11.56.56 AM

The point is however, that the battery demonstrated what could be done. As Simon Hackett, from Tesla rival Redflow, tweeted in response to Elon Musk’s tweet of our story, the battery is designed to provide fast response, to stop the sticks falling out of the “Jenga pile” before other generators can catch up.

The problem is that market rules and pricing mechanisms are not designed around technologies like batteries that can go from 0 per cent to 100 per cent full power in a fraction of a second.

It is understood that the Tesla control system automatically sensed that system frequency dropped when Loy Yang tripped.

Frequency instantaneously changes across the National Electricity Market when an event happens and while synchronous generation provides mechanical inertia which helps moderate frequency changes, other technologies are required to provide fast follow-up, to inject power into the network to stabilise frequency.

This is what batteries are really good at: injecting power fast. In the same way that, if you are riding a bike up a hill and start to wobble, you need to pedal a little harder, the battery kicked in.

In these situations it is not so much about how hard you pedal but making sure you stay balanced by responding quickly to changes.

South Australia and Tesla  are not alone in pioneering the deployment of batteries to deliver grid security and reliability alongside increased renewable energy deployment.

A recent report by Everoze titled “Batteries Beyond the Spin – The dawning era of digital inertia on the Island of Ireland” summarises a Queens University Belfast study commissioned by AES, another global leader in energy storage.

The report is based on experience with a 10MW battery energy storage system at the Kilroot Power Station in Northern Ireland. A key observation of the report is batteries provide 100 per cent of their output as digital inertia, vs synchronous generators which are limited to 7-14 per cent of total capacity.
Click on image for video of Neoen Hornsdale Battery
This would mean the 100MW Tesla Big battery could provide the equivalent inertial response to 700-1400MW of traditional generation.

The Everoze report concludes “adopting digital inertia can slash the cost of delivering inertial response as well as improving the quality of power response following events”.

The battery industry insists that we can address system security, reliability, affordability and lower emissions while accepting the digital era has spread to the energy system, and that we are moving beyond the steam age.

The AEMC know that times are changing and have a process underway to review Frequency Control Frameworks.

As its November 2017 issues paper states:

“Sometimes, large generating units and transmission lines may trip unexpectedly and stop producing or transmitting electricity. These events tend to result in larger changes in system frequency and more significant impacts on the safety and reliability of the power system. Controlling frequency is therefore critically important”.

The problem with the AEMC and its application to public policy is that it seeks to attributes blame for frequency stability on new variable technologies like wind and solar (the AEMC likes to call them intermittent), and not the old clunkers that seem to trip on a very frequent basis.

(Four times in the last week, with another 1,500MW out of action – the equivalent of another Hazelwood generator).

However, progress in being made. The forward thinking discussion paper released by the Australian Energy Market Operator recognises the need to act, and quickly. “NEM planners must prepare for and manage a rapid transformation of the power system,” it wrote.

It at least is looking at how it can change market rules to encourage the anticipated huge resource in household battery storage, and how that can help the grid. It also wants to recognise the importance of large scale storage, be it battery, pumped hydro or solar thermal.

In a submission to the AEMC, Tesla goes through all the different hurdles that make it hard for battery storage. “The current structure of the NEM was not set up to fully cater for the incorporation of non-synchronous technologies and battery energy storage,” it says.

It suggests that the AEMC should consider a 2 second market or even a 1 second market, but also warns against mandating each and every wind and solar generator to have storage, as it will result in higher costs and wasted capacity.

Tesla is not the only one to make the complaint. Batteries can provide any number of services (up to 20, according to some estimates), but on the NEM can basically only get paid for one: time-shifting the output of wind and solar.

That was the complaint of the builders of Lincoln Gap wind farm, who are going ahead with battery storage anyway, to test the waters.

Interestingly, the Hornsdale wind farm, adjacent to the Tesla battery, this week began playing in the frequency control market, finally doing the tests with the Australian Energy Market Operator. It is the first wind farm to offer this service in Australia.

HDWF2-2017-12-19As ever, these graphs – which show the energy and FCAS offerings from Hornsdale 2 wind farm, as opposed to the battery – are from the ever vigilant McConnell.

The next big storage installation, next to the Wattle Point wind farm, will rely on contacts from the transmission provider, and a grant from ARENA, to provide frequency response and micro-grid and islanding services on the Yorke Peninsula.

Even the Victorian government is struggling to make enough funding available to the two preferred winners of its tender for two battery storage installations providing at least 100MWh of storage.

That result was supposed to be announced in late August, and installed by January 1. But negotiations are continuing, and are now expected to go through summer before an announcement is made.

The Lakeland solar and storage facility – supposed to the first combined large-scale solar and storage installation on the grid – is also facing numerous delays as AEMO, the local grid people, and the project’s own engineers get their minds around various issues.

The ARENA-sponsored project was supposed to connect in July, but now looks set for a late January start-up at the earliest, a delay of six months, if not more.

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  1. Dee Vee 3 years ago

    Just another example of innovation by Tesla that will kill the “greed is good” operators like AGL. Tesla didn’t need to invent or even enable this option, they weren’t paid for it. Its just about doing things properly.

    • MaxG 3 years ago

      Yes, love that too… do it because you can, just screw up their revenue stream / potential!

  2. neroden 3 years ago

    Bluntly the NEM is not fit for purpose. I understand that each state is allowed to opt out of it by legislation due to electric power being reserved to the states. Maybe it’s time to do this. South Australia could design its own electricity market and it would be much better.

    • Hettie 3 years ago

      Yes. Most States except NSW seem to want to play in the 21st century, not the 19th. It’s the Feds that are wedded to the past, terrified of the future, and loath to loose the black goose that must be laying brown paper wrapped golden eggs for them, because why else would they defend it so frantically?

  3. Tom 3 years ago

    The first graph looks like a wind farm providing FCAS – Hornsdale 2?

  4. Tom 3 years ago

    Bye bye FCAS market. Or at least it will become a much smaller market than at present.

    Bye bye SA 4-gas generator rule.

    I wonder if this will ever result in lower retail energy bills? Perhaps its a good time to be a shareholder in an energy retailer?

    • Cooma Doug 3 years ago

      It is not bye bye FCAS. Its hello RCAS. R being the word rapid.

      • Greenfanatic 3 years ago

        Sorry, its Regulatory responsible to mitigate the load generation discrepancy due to forecast error in generation and demand, error in ramping up/down of governor and so on.FCAS is for big change due to major fault in big generator or transmission line.

  5. Cooma Doug 3 years ago

    This is my favourite write of yours Giles. This is a big step in flushing away the fog and creating a vision of what can be very complex.
    Im waiting for the day when a nerd from somewhere will describe a frequency measurement device measuring frequency in the first 5 milli seconds of a cycle.
    That will enable some amazing stability control and load side response.

  6. Kevan Daly 3 years ago

    Zero to 100 MW in 3 mains cycles seems incredibly fast to me. Has inductance been abolished in SA?
    Anyone know the details of the power electronic circuitry between the battery and the grid?

    • Guy Stewart 3 years ago

      It helps to look at the origins of the technology. Tesla Energy got their start in cars, that means massive, quick, and precise variation in power delivery.

      The components of the Hornsdale Power Reserve are rows of Tesla Power Packs. Inside the Power Packs are rows of tiny lithium cells. The scale of the battery is impressive, but moreso because it is built from millions of tiny little units.

      It is temping to think of large power supplies are lumbering and slow. They have been until now. But using very small modular components integrated together in a highly co-ordinated way means a lot of the rules and expectations don’t apply any more.

      • Phil 3 years ago

        Effectively lot’s of microgrids in a centralised model
        And centralised on a scale that can be located anywhere.
        VERY VERY quickly and cost effectively.

        I don’t think the power industry has quite understood where this is going yet. And the frequency control advantages make a 100MW battery equivalent to a 1000MW one (see article link below)

        Yet one very senior person stated this battery is so tiny it will make virtually no difference.


  7. Hettie 3 years ago

    As regulars of this forum know, I am slowly gaining more understanding of the less technical aspects of a terrifyingly complex system.
    The question has been asked, can such interventions as last Thursday’s millisecond response to the Loy Yang trip mean lower prices. But how can it not?
    Sudden failure of big chunks of generating capacity threaten that supply will fall below demand.
    Rapid intervention is required to prevent inertia from dragging the whole network to frequency below what is needed to maintain voltage.
    Enter the rapid response gas guys. Who charge up to $14,000 MWH for a 30 minute response to a crisis that lasts less than five minutes. Nice work if you can get it.
    BUT a millisecond response, that gives the other generators time to register that the failed unit has been switched out of the grid, before they have slowed down in sympathy, aborts the precondition for that obscene price gouging. So the price stays within reason.
    As I’ve said before, I’m working this out as I go along, but I have a feeling that sometimes a layperson’s simple exposition can cut through an awful lot of over complicated crap. And I’ve been seeing a fair bit of that in the discussions of this event.
    I know that if in fact I’m just blowing it out my ear, someone will put me right.
    Feel free.

    • daroiD8ungais7 3 years ago

      > “Rapid intervention is required to prevent inertia from dragging the
      whole network to frequency below what is needed to maintain voltage.”

      Inertia isn’t to drag. When your car engine cuts out at 100km/h it’s inertia that keeps it rolling. Drag slows it down. The grid’s version of drag is load.

      • DJR96 3 years ago

        “Inertia” does not maintain frequency. It can only reduce the rate of change of frequency (RoCoF). It can not reverse the direction of change, that needs energy input.

        And this is exactly why battery storage is so much better at maintaining network stability because it can instantly respond to events and inject/absorb energy. Not just reduce RoCoF.

        Ultimately, the entire network must adapt to using ‘digital’ management and eliminate inertia from it’s vocabulary altogether. It can be done.

        • Mike Westerman 3 years ago

          Great in theory, less so in practice: an AC network is a mess of LC elements and unruly control elements that make orderly load and frequency control difficult. Inertia slows it down so twitchy elements are only deployed in little chunks and for small perturbations, larger chunks for big perturbations. That way the system is easier to keep dynamically stable. One day will most likely will have predominantly distributed generation and storage that will enable microgrids interconnected by DC to others, in which case I could well imagine digital management and a much more robust efficient architecture than we have now.

          • DJR96 3 years ago

            I should have added that the future system would not use frequency as a measure of any sort. Frequency can be completely fixed and unwavering, and then voltage alone can be used to monitor and govern the network.
            Such a system is not that difficult and could be implemented within the next decade – so long as all authorities cooperate and regulations put in place to allow it to happen. And it must for the network to improve at all.

          • Mike Westerman 3 years ago

            Frequency is used because the information is shared at close to the speed of light so frequency is essentially the same everywhere in the network. Voltage is everywhere varying differently. If you want to get away from frequency and particularly the frequency-voltage interactions, go DC. If you have microgrids – why not? Especially if most loads have most of their own generation and storage locally.

          • DJR96 3 years ago

            Frequency has a very narrow band of acceptable operation, and without knowing local voltage levels as well it is difficult to know where to adjust supply – for the very reason you mention. Frequency is universal. And it also suffers from phase misalignment too. ie SA is often 10’s of degrees lagging Victoria. This misalignment can cause it’s own issues.

            We’ve been monitoring local voltage across the network for decades now and know what voltage is required at pretty much any point to ensure all customers are getting acceptable voltage. And the acceptable range is much greater than that for frequency, so it makes sense to use it as a means for monitoring and regulating the network.

            I’m talking about the entire network. Microgrids certainly can be managed individually within the wider network, and can support the wider network, but not necessarily manage the wider network.
            Far too expensive to convert the wider network to DC transmission. And not necessary.

    • Ana Naputo 3 years ago

      YOU are right.

  8. Jon 3 years ago

    As consumers we want the NEM to succeed and transmission lines improved.
    The more spread out and connected the renewable generation is the less fluctuations in generation from one source or area will effect all of us.

    The 4 Gas turbine rule in S.A. has already been shifted.

    Paid to or not the response of the HPR is proving its worth in a way advertising can’t buy. 🙂

  9. Tint Depot 3 years ago

    This is a very interesting article about the Tesla battery & Australian energy. I look forward in seeing how energy storage systems can help bring electrical stability and bring down kWh costs.

  10. Pedro 3 years ago

    Great to see real world proof of the advantages of utility scale battery systems with stabilization of the grid. In a few year the politicians will be wondering what all the fuss was about.

    • JDL51 3 years ago

      In the U.S. they are going out of their way to create a fuss to protect the coal market. Don’t see that changing until they get thrown out of office.

  11. GregS 3 years ago

    So the 30 minute rule is still in effect for a few more years, but has the battery not effectively neutered it? Being able to respond so quickly, will it not kill a lot of those obscene price spikes?

    • Mike Westerman 3 years ago

      Until the rentseekers learn how to outrun it.

      • GregS 3 years ago

        Yeah I’m sure they will busy trying to figure out how to outsmart it

        • Mike Westerman 3 years ago

          It’s a worry with very long duration large scale pumped hydro – your marginal cost can be close to zero but your ramp rate is very fast. Tools for gaming the market.

          • GregS 3 years ago

            Reminds me of Enron. The CEO would boost that he employed the smartest guys in the country and they would always find loopholes to exploit.

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