What is the Tesla big battery actually selling? It’s not just energy

The Tesla big battery has been a point of fascination for many in the energy industry since its official opening at the start of the month.

Everyone, from the market operator down to generators, consumers, competitors, the owners of soon-to-be-redundant incumbent technologies and, one suspects, Tesla itself, is keen to know exactly how it will operate.

One of the common inquiries we have received since updating the popular NEM-Watch to incorporate the Tesla battery, and its ability to both charge and discharge in rapid time, has been “why isn’t it doing anything?”

Appearances can be deceiving. One part of the big battery’s function is to do what gas peaking plants do, and fire up in times of peak demand (and high prices) – although firing up is not quite the word here.

Let’s remember that most gas peaking plants operate for just a few hours a year, when prices are really high.

The Tesla battery will be able to operate more often than that, because it’s ability to charge at low prices, and then sell into the market at higher prices, means more opportunities for it to be used.

This table above is an example. Charging the battery (HPRL1) with lots of wind blowing and then in the next five minutes offering to discharge (generate).

That also means it doesn’t have to wait for the huge price spikes, the surge in demand and “scarcity” in supply to justify its operation.

But that’s not the only thing it can do. It also plays a less visible role of providing important network services such as frequency control and ancillary services (FCAS). This is a completely different market – in fact, about six markets – and they are not visible on the energy only market.

Dylan McConnell, from the Climate and Energy College in Melbourne, has helpfully provided these graphs to illustrate exactly what the Tesla big battery is up to in certain times.

The trick here is that Tesla is actually providing a service, it is not necessarily putting this output into the grid. If called on, it will, but most of the time it is there for exactly what these services are called – contingency and regulation.

Contingency, McConnell explains, are for those events when a large power station trips off, and the battery can act quickly to “hold the grid’ together while bigger but slower moving machinery is fired up.

Regulation is basically the throttle controls that the Australian Energy Market Operator wants to be able to deploy to make the minor adjustments needed to keep the grid stable. The battery, like other spinning machinery, offers these services – and is paid for them – but is mostly on standby.