The prospects for Tesla’s proposed 250MW “virtual power plant” in South Australia look significantly brighter after the success of its first trial and an enthusiastic response from the South Australia government.
So far, some 100 Housing SA homes have received their 5kW of rooftop solar and the 13.5kWh Tesla Powerwall batteries, with another 1,000 homes to receive solar and battery storage under an agreement locked in by the previous state Labor government.
The original plan was to install a total of 50,000 Housing SA and low-income homes with solar and storage, slashing bills for those homes by around 30 per cent and creating a 250MW “virtual power plant” that could be used to boost security and reliability on the state’s grid.
The fate of the third phase – which will rely on private finance, and the emergence of another retailer – was clouded when the Liberal state government won the state election in March, and said then it would favour its own proposal of giving subsidies in the form of grants for battery storage to 40,000 homes.
An announcement on the $100 million grants for 40,000 homes is expected in coming months, but it now seems clear that the new government is interested in doing both – a result that would see at least 90,000 subsidised and supported battery storage installations across the state.
There are also ongoing talks about a different scheme proposed by German manufacturer sonnen, which could see another 10,000 batteries brought into the market.
In a statement on Sunday, the state government hailed Tesla’s first VPP trials for “delivering cheaper energy to South Australians who need it most”, and increasing the reliability of the state’s energy network.
The results of those trials conducted by Tesla – obtained by RenewEconomy – show that groups of Tesla Powerwalls installed in homes can deliver much of the same services as the Tesla big battery in South Australia, such as providing rapid and accurate response to frequency changes.
This graph below shows how two Tesla Powerwalls (red and green), respond to so-called “droop settings” by autonomously and automatically injecting active power when the frequency (blue line) drops below the thresholds (dotted lines).
“This response demonstrates the ability of the SA VPP to autonomously and instantaneously provide frequency services that help maintain the stability of the grid,” the Tesla document says.
The South Australia government acknowledged this, saying that Phase 1 of the Tesla VPP (100 homes) demonstrates that distributed Powerwall technology can increase the supply of energy during peak periods.
It says this would increase reliability and cut prices in South Australia and “when paired with solar and wind” generate clean renewable energy.
“This program is already delivering participating South Australians significantly reduced electricity bills,” energy minister Dan van Holst Pellekaan said.
“The Marshall Government has always highlighted the critical need for more storage to increase security and lower expensive peak costs.
“The final rollout phase (Phase 3) is subject to the success of the trials, the financing of the program by the private sector, and the satisfaction of both Tesla and the Government in the final program design.”
“In addition to this program, we will also be announcing details of our $100 million Household Storage Subsidy Scheme to deliver 40,000 more home batteries in the coming months.”
The results are also timely given the recent price spikes in South Australia, artificial surges more or less engineered by the gas cartel when competition is removed through network constraints.
The Tesla big battery has already smashed one of the cartel’s ruses in the FCAS market, and more competition would help further lower prices in both the FCAS and wholesale electricity markets.
Another of the tests conducted by Tesla related to what is called “regulation” frequency services, using 10 Tesla Powerwalls, including one inactive one.
Like its “big brother” at the Hornsdale Power Reserve, which features an array of 100kW Tesla Powerpacks, these also showed fast response and accuracy (unlike some traditional fossil fuel plants).
“The aggregated test group response to a high degree of accuracy to meet the 4 second active power set points,” the Tesla test report says.
“The figure also demonstrates that the Gridlogic platform dynamically manages the output from the individual Powerwall systems accounting for local system usage and constraints and distributed the active power requirement accordingly.”
In other words, distributed Powerwalls can continue to do the primary job at their location – storing solar from the household rooftop, supplying power when solar output falls – and providing broader services to the grid.
Tesla is not the only company rollout out projects like this – there are a variety of VPP and micro-grid trials going on around the country – but its proposed 250MW VPP is by far the biggest in Australia, and the world.
It’s also heartening to see such process in light of reports from the ACCC last week, which sought to put a handbrake on distributed energy, ending subsidies for rooftop solar. Its 370-page report focused only on the health and returns for centralised generators.
Yet most analysis, including from the CSIRO, network owners and the Australian Energy Market Operator, and their equivalents overseas, expect up to half of all demand to be met by distributed generation – rooftop solar, battery stooges demand management – over the next few decades.
The Tesla VPP proposes to install rooftop solar and Powerwall batteries for free. The funders get their money back through bills for the use of electricity, but it still reduces the cost to those low income households – who would otherwise not afford either solar or storage – by around 30 per cent.
Phase 1 of the project targeted 100 homes and phase 2 targeted 1,000 homes, supported by $30 million of government funding. However, the next phase, to meet the remaining homes to make the 50,000 target, was dependent on private funding and the emergence of a new retailer to handle it.
The separate Liberal program targeting 40,000 home would be for a $2,500 grant, but it is understood the new government is looking at ways to ensure these are interconnected so they could also act as a type of virtual power plant.
South Australia’s minister for Human Services Michelle Lensink said the Tesla VPP project was “incredibly beneficial” in offering much-needed bill relief for Housing SA tenants.
“This project gives South Australians huge help in paying excessive power bills as they struggle with daily cost of living expenses,” Lensink said.
Giles Parkinson is founder and editor of RenewEconomy.com.au, and is also the founder of OneStepOffTheGrid.com.au and founder/editor of www.TheDriven.io. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.