Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. But I can't by law give you advice, and I do make mistakes. Remember: the unexpected sometimes happens. Oddly enough, the expected does too, but all too often it takes longer than you thought it would, or on the other hand happens more quickly than you expected. The Goddess of Markets punishes (eventually) greed, folly, laziness and arrogance. No matter how many years you've served Her. Take care. Be humble. And don't blame me.

BTW, clicking on most charts will produce the original-sized, i.e., bigger version.

Saturday, July 8, 2017

Telsa to build world's largest battery bank in South Australia


In this post, I talked about Elon Musk's amazing offer to build a battery bank in South Australia which would "solve SA's power woes".  Well, after a competitive tender, Tesla has announced that it will, in co-operation with the French alternative energy company Neoen, build the world's biggest battery bank in South Australia.  It's maximum output will be 100 MW, which is 3 times larger than any other battery bank, and it will store 129 MWh of electricity, which is 1.6 times the Aliso Canyon battery bank in California.

Musk said that a failure to deliver the project on time would cost the group $50 million, which suggests that this is roughly the cost, since Musk is sticking by his promise to build it in 100 days or it would be free.  It would provide 1/15th of South Australia's electricity demand for 80 minutes.  This doesn't sound like a lot, but it's not meant to provide power overnight, say, or for the afternoon peak.  It'll work a bit differently:

The hourly averages of wind power generation can be predicted with almost complete accuracy 24 hours out (and even a week out is a good indication)  - and the more wind you have the more accurate. Solar is even more predictable. What's difficult is the 5 to 15 minute prediction. Will we have 190 MW or 177 MW in exactly 15 minutes time? That is the trick. 
And that's exactly what a big battery allows you to plan for. What you do is smooth the gaps between generation and load. If that gap starts to grow toward 100 MW (the size of your battery) and you don't have anything else ready to go, THEN you start your diesel (gas) generator. And you turn it off as soon as a cheaper source comes [back] online.  [Hat tip to RobertAussie]

The battery bank will be used to prevent the kind of cascading failures that occurred last (southern hemisphere) summer in South Australia.  When a big generator or a power line goes down, it causes voltage and frequency on the grid to "jerk".  This can cause other generators or grid lines to "trip", which cause further failures potentially leading to a system-wide collapse.  Unlike other forms of storage (CSP, pumped hydro) or gas peaker plants, batteries can respond virtually instantaneously to fluctuations in the frequency or the voltage of the grid.  This makes a blackout like those which occurred last summer much less likely.

It's not big enough though to solve the problem of time-shifting.  Demand peaks in the late afternoon, when the sun is already past the meridian, and continues into the night when there is no sun.  And although wind supply is forecastable, it's not fixed.   To reach 100% renewables, SA will likely require 5 hours of storage, plus an additional interconnector via Broken Hill to the east coast NSW grid.  It seems very likely that South Australia will build a CSP plant near Port Augusta in the state's north (lots of sunshine there).  The Federal government has already agreed to to tip in $110 million to help fund it at a low interest rate as part of a deal to get the support of Nick Xenophon in the Senate.  And you may be sure that if this battery bank works as expected, there will be others: after all, at this cost, one hour's storage would be just $750 million.  But it is a beginning.  It emphasises yet again that at some point a 100% renewable electricity supply is feasible, and as the cost of renewables plunges, also inevitable.

Read more here:

Tesla to build world's biggest lithium ion battery in South Australia

Elon Musk's big battery brings reality crashing into a post-truth world

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