Last week South Australian Premier Jay Weatherill announced he would take Elon Musk up on his offer to power the state, with the world's largest lithium ion battery set to be installed in collaboration with French renewable company Neoen and the State Government.
But will it solve the state's power woes? Australian experts weigh in below.
Dr Christopher Jones, National Secretary of the Australian Electric Vehicle Association
The awarding of a 129 MWh battery contract to Tesla is big news for South Australia, as it will be able to instantly provide power to the grid when needed, as well as taking out any fluctuations in generating capacity from surrounding wind farms and PV installations. The battery will supply close to 10 per cent of the state's energy needs for almost an hour.
It might seem like a drop in the energy demand ocean, but it's the first of many drops. Storage has long been the missing link for renewable energy, and coupled with developments such as pumped hydro in the Snowy Mountains scheme, will make a significant contribution to Australia's greenhouse gas reduction commitments.
Professor Peter Murphy, David Klingberg Chair in Energy and Advanced Manufacturing at the University of South Australia's Future Industries Institute
It is fabulous news for the state of SA because the Tesla battery is exactly the type of technology we need to complement our existing renewable energy generating capacity.
This is indeed an insight into the future of energy.
Having an exemplar of this technology in SA may enable and foster local innovation, research and ultimately manufacturing of advanced technologies such as these by industry in SA.
Tesla is building the world's largest lithium-ion battery in South Australia — an installation 60 per cent larger than any other large-scale battery energy storage system on the planet.
In partnership with the SA government and French renewables company Neoen, alongside the third stage of the Hornsdale Wind Farm, the PowerPack battery farm will top 100 megawatts of capacity and provide 129 megawatt-hours of energy generation to the region — load balancing the state's renewable energy generation and allowing emergency back-up power if a shortfall in energy production is predicted.
Professor Hugh Saddler, Honorary Associate Professor of the Crawford School of Public Policy at Australian National University
The battery installation will make an important contribution to increasing the security and reliability of electricity supply in South Australia. It should also help to keep a lid on wholesale electricity prices, by making it more difficult for gas generators in the state to drive prices up to extreme levels by what is called strategic re-bidding behaviour.
Frequent, very short lived extreme price spikes are a major cause of the super high average wholesale prices, for which all South Australian electricity consumers are now paying.
The project is indirectly underwritten by electricity consumers in the ACT, who are paying for all the output of the Hornsdale windfarm, as part of the ACT's move to 100 per cent renewably sourced electricity by 2020. In that sense, it represents a partnership between the governments of South Australia and the ACT.
Dr Geoff James, Research Principal at he Institute for Sustainable Futures, University of Technology Sydney
The Tesla 100 MW battery is of world significance both because of its size and its impact. The urgent need to keep South Australia's grid frequency stable was demonstrated by the September blackout. The Tesla battery is an important part of the solution and is available quickly enough to provide support during the coming summer.
Co–locating the battery with a wind farm highlights another key characteristic of battery energy storage: its value is being able to do multiple things at once, and to do them quickly. The Tesla battery farm, like a modern Stonehenge aligned with the surrounding turbines, will shift wind energy production to make it more dispatchable and therefore more profitable.
At the same time, its high power capacity will be available in quick bursts to keep frequency in the right range. In just the same way, batteries at residential and commercial premises can support both the owner and the grid, and it won’t be very long before South Australia can aggregate another 100 MW of battery capacity in this way.
David Dawson, Economics Leader for Victoria and South Australia at Arup
Further integration of renewables into the Australian national electricity mix will require the deployment of both large-scale and distributed electricity storage. In particular, continued connection of wind and solar photovoltaic farms at grid scale greater than around 100MW will require addition of electricity storage technologies of comparable size to stabilise the intermittency of generation resulting from these renewable technologies.
The most potent application of storage technology to help stabilise the grid of the future will see the deployment of battery technologies (eg. Li-ion, flow) providing fast frequency response over short time intervals in the order of seconds to minutes, alongside pumped hydro energy storage technologies, which can respond within minutes and deliver significant power output over periods up to between six to eight hours, once battery technologies tail off delivery and need re-charging.
The combination of fast-response high-cost Li-ion battery technology with hour-long lower-cost PHES technology will be a potent combination which will allow the Australian electricity market operator and ElectraNET to better manage the stability and reliability of the South Australian grid.
It's a combination of different storage technologies which will help integrate more renewables into the Australian grid.
Arup is working with Consortium members, EnergyAustralia and Melbourne Energy Institute of the University of Melbourne, on a seawater PHES project, under joint funding with ARENA.
Ian Lowe, Emeritus professor of science, technology and society at Griffith University, Qld and former President of the Australian Conservation Foundation
Cost-effective storage of electrical energy is the only problem holding us back from getting all of our power from wind and solar. This project is a significant innovation to demonstrate the feasibility of large-scale storage. It will not, by itself, enable South Australia to have reliable energy just from wind and solar, but it is an important step forward.
Dr Ariel Liebman, Deputy Director of the Monash Energy Materials and Systems Institute at Monash University
The announcement about the Neoen and Tesla investment in a 100MW/129MWh battery adjacent to the Hornsdale wind-farm in South Australia is groundbreaking and clearly foreshadows the shape of the Australian energy future. I welcome this exciting announcement which will be remembered as the first large scale proof-of-concept on the National Energy Market transformation path.
However, we shouldn't get too complacent because there are still significant challenges in turning this kind of activity into business-as-usual. We still don’t have a National Planning Framework, as pointed out by last month's Finkel Review. We need a new paradigm in system planning, where we are able to make efficient investment decisions in a nationally coordinated fashion over at least a 20-30 year horizon.
These are decisions regarding where we should build batteries, versus off-river pumped hydro storage, as well as where and how much additional transmission capacity we should build. This requires an expansion of AEMO/AER's RIT-T and SENE transmission cost-benefit assessment processes to include cross-state investment that will take place over the next 20-30 years, as we will be connecting unprecedented quantities of new wind and solar farms often far from existing grid locations.
Failing to take such a national approach will likely result in billions of dollars of stranded assets as different technologies unexpectedly emerge as competitive at various locations at different points in the future. The current NEM market design cannot efficiently incentivise investment over the required horizons.
We are working on the analysis and design of such a framework at MEMSI at Monash University and I’m looking forward to modelling the impacts of this announcement and supporting Australia's enhanced planning and policy making needs.
Professor Sankar Bhattacharya, Acting Head of the Department of Chemical Engineering at Monash University
This is a substantial development in the deployment of battery technology; its operation will shed light on the techno-economics and identify opportunities for improvements as the batteries are scaled up in the near future.