Australia Should Take a Chance on Elon Musk

by Anna Gretz
March 13, 2017

Elon Musk claims that battery storage could solve Australia’s power crisis in just 100 days… and he can prove it.

Grid-scale battery storage took a huge jump last year in the United States, with Tesla leading the charge with the launch of the new Powerpack 2, built for grid and industrial-scale applications. Though Lyndon Rive says that Tesla has a long pipeline of grid-scale battery storage projects, they’re willing to jump in and commit to providing an energy solution to Australia in 100 days… or it’s free.

Musk made the offer to fellow tech mogul Mike Cannon-Brookes on Twitter, and it definitely caught his attention. Musk tweeted, “Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?” It didn’t take long for Cannon-Brookes to reply, “You’re on mate. Give me 7 days to try sort out politics & funding,” and asked for a private message with a rate quote. Things got really serious, really fast.

The confidence with which Tesla CEO Elon Musk speaks comes primarily from the com’any’s recent success in California. In just 90 days, Tesla completed the installation of a 80MWh battery storage plant at Edison’s Mira Loma substation. To give you an idea, completing a job this big, this fast, is basically unprecedented. Anyone who has observed the crawling pace of infrastructure change knows that solutions to power issues rarely come quickly… let alone near-instantaneous.

But is battery storage what Australia needs to remedy their specific energy crisis? There ar some unique issues involved.

Some Background on Australia’s Energy Crisis

Australian Prime Minister Malcolm Turnbull has just declared a national energy emergency, and the Australian Energy Market Operator says that either gas or electric generation is going to come up short in meeting demand unless they come upon a quick solution.

When talking about energy in South Australia, it’s important that we first mention that SA is a world leader in the integration of wind and solar energy. Right now, the state generates an impressive 41% of its electricity through intermittent renewables like wind and solar. But despite the amazing feat of securing a huge percentage of integrated renewable energy, wholesale electricity prices in South Australia have hit a huge increase, forcing the SA government to re-open an additional natural gas plant that had previously been brought offline. The situation is pretty complicated.

This is actually why the SA government would prefer not to call this a “crisis” at all. A crisis usually refers to a sudden problem, but the energy problem in SA has been a long time coming. Wholesale power prices have been rising for a few years now, and it was pretty easy for people to see that bigger problems laid on the horizon. One of those problems was… winter.

The Australian winter was cold last year, resulting in higher demand, and lower renewable energy generation. This caused an additional increase in energy prices, and a heightened sense of urgency to figure something out, before blackouts became a reality. And then, they did.

Last September, South Australia went dark when a statewide blackout hit. More recently, a major heatwave forced Australian authorities to intentionally cut power from electrical utility customers, because there simply wasn’t enough supply to meet demand.

The South Australian government is, in fact, in the market for a new source of electricity to adequately supply its population with power. Elon Musk has been on a roll with energy storage installations lately, and he wanted to throw his hat in the ring. Tesla execs believe that with 100-300MWh of grid-connected battery storage, they could prevent widespread outages from every happening, ever again. Musk claims that he can use the existing infrastructure and add battery storage, essentially solving SA’s power problem. In fact, he can’t think of a better, more cost effective solution.

Why Energy Storage Could Actually Be The Solution

South Australia has over 1700 MW of wind installed, and 700 MW of solar. Battery storage is something the government could do well with. Why? Because energy storage is the key to unlocking all of the energy wind and solar have to offer.

Here’s how: The crisis in SA came about partially because of a huge increase in intermittent renewable energy resources, like wind and solar. Installing and integrating these power sources, without setting a system in place energy storage to fill in the gaps when the these sources aren’t in full swing (ie. when the wind isn’t blowing or the sun goes down) is setting the grid up for a complicated balancing act.

Energy storage stores excess power generated during peak times of wind and solar, and makes it available when these two intermittent resources are not meeting demand, smoothing out the big issue Australia is having with supply and demand.

It’s easy to see that the level of solar power generation would fluctuate greatly over the span of 24-hours… everyone knows that the sun is going to eventually go down. But that is exactly when demand for electricity ramps up--people are returning home from work, and looking to heat or cool their homes, wash clothes or dishes, charge their cars, or turn on their entertainment systems. Battery storage evens out the bulk of supply earlier in the day with the higher demand later in the evening by storing excess and making it available when people need it the most.

Though battery storage is relatively new on the scene, Australian households are leading the way in residential rooftop solar installations, with 1.6 million units installed already. Energy storage doesn’t only make sense on a utility-scale level, but on a residential level as well. Storage and smart management systems can help households get a better value for their rooftop solar panels, while supporting the struggling power grid at the same time.

Tesla is showing us how fast and how far battery storage can take a failing grid. Australia should do it’s grid, and a worldwide audience, a favor, and let Elon Musk follow through on his ambitious offer.