“Tesla’s Giant Australian Battery Saved Consumers $35 Million In Four Months” – (Ecowatch)

Today we will be analyzing another Ecowatch piece. This time, however, the issue is not solely (or mainly) based on the source or the presentation of the information as published. The problem is more in a macro issue surrounding the emergence of this new technology that is often overlooked in its coverage. And not just Ecowatch either, almost all media platforms are prone to fall into this trap. Traditional, mainstream, independent and ideological. By ideological, I am mostly referencing niche oriented outlets such as Ecowatch, but one can also swap that out for political leanings.

It is not all bad news, however. Let’s go through some of the positive, and work towards the criticism.

Since switching on in December, Tesla’s massive battery in South Australia has already drastically lowered prices in the region’s frequency and ancillary services market (FCAS) and has taken a major share of that market, Renew Economy reported.

During Australian Energy Week, McKinsey and Co. partner Godart van Gendt boasted about the stunning efficiency of the 100-megawatt Powerpack system, which is connected to Neoen’s Hornsdale wind farm.

For the purpose of the ignorant (me included), frequency and ancillary services market (FCAS) refers to mechanisms and infrastructure tasked with ensuring constant power grid reliability. To quote Wikipedia:

The term ancillary services is used to refer to a variety of operations beyond generation and transmission that are required to maintain grid stability and security. These services generally include, frequency control, spinning reserves and operating reserves. Traditionally ancillary services have been provided by generators, however, the integration of intermittent generation and the development of smart grid technologies have prompted a shift in the equipment that can be used to provide ancillary services.

https://en.wikipedia.org/wiki/Ancillary_services_(electric_power)

In this case, the Tesla setup replaces traditional natural gas (or other) backup options.

“In the first four months of operations of the Hornsdale Power Reserve, the frequency ancillary services prices went down by 90 percent, so that’s 9-0 per cent,” van Gendt said Thursday, as quoted by Renew Economy.

“And the 100 megawatt battery has achieved over 55 percent of the FCAS revenues in South Australia. So it’s 2 percent of the capacity in South Australia achieving 55 percent of the revenues in South Australia.”

The Australian Energy Market Operator calls upon the FCAS to provide back-up energy whenever generators fail or fall short. This service has typically relied upon costly gas generators and steam turbines, with electricity rates up to $14,000 per megawatt during these outages.

But Tesla’s big battery, which was designed to feed South Australia’s unstable power grid, has changed the game. Whenever it has needed to discharge its power to the grid, costs have hovered as low as $270 per megawatt, as The Guardian noted.

As Renew Economy noted, “various estimates have put the cost savings to consumers from the FCAS market alone at around $35 million, just in the first four months of its operation.”

What’s more, the Powerpack system has responded much quicker to power outages (within milliseconds), with the benefit of no greenhouse gas emissions.

There is no doubt that the North American and European markets would benefit from the mass implementation of such a service. A great way to help gloss over the problems associated with the operational capacity of carbon neutral generation methods like solar and wind. And with wide enough development, one could likely expand beyond just covering shortfalls and go right to helping to feed peak demand. Rather than having to rely on fossil energy to keep up with peak demand hours, one could just release from a reservoir instead.
Indeed, it takes a lot of energy to power the macro North American or European grids. But presumably, this power pack technology will go down in price with mass adoption (as is the case with new innovations). As such, which is cheaper in the long haul?

Feeding 12 gas/coal/nuclear plants indefinitely? Or making a big purchase (likely in stages over time, a gradual transition) but also saving money by not needing to have as many generation plants operating at any one time?

For the sake of interest (at least to me), here are the macro grids of both North America and Europe.

Being those enormously vast power grids are both vulnerable to all manner of human and nature induced disaster and inefficient, this new technology can possibly help in that regard as well. Huge grids are necessary when New York City or Montreal are far from Niagra Falls or James Bay (and other sources of electricity).  But in combination with new alternative energy sources, these power packs should help eliminate the need for these huge grids. If not entirely, then they should reduce overall reliance on them. Helping to keep technological outages hopefully isolated locally or regionally. As opposed to limited to 2 or 3 entire interchanges that happen to be running close to maximum capacity. Something that has happened at least twice in North America and once in Europe (if memory serves).

The only real issue that I see here (at least so far) is the source. At least at the moment, Tesla seems to be the only entity doing the legwork in terms of the research and manufacturing of this technology. Which seems to be working successfully both in central Australia and in Putro Rico. While that is alright at this early juncture (well, maybe not the Putro Rico part, if I am interpreting it correctly. As explored HERE), not so much with the further prevalence of the technology. Complete monopolies are not good for anyone (well, besides their beneficiaries), and this is no different.

This piece may come across as paranoid. But at this early time, long before any of this has become ubiquitous enough to be essential to smooth economic operations of societies worldwide, it’s good to at least attempt to find a new frontier than the previous. Though I come across many articles articulating a mid to long-term where future wherein the technology of renewables crushes old fossil fuel interests, one has to ensure that were not just trading one nemesis for another.

For example, by going all in on just one profit-driven entity just because their leader is held in high regard by many people. Or due to old interests starting to realize the way the winds are blowing, and buying their way into a seat at the table.

http://calgaryherald.com/business/energy/oil-companies-following-silicon-valley-in-backing-green-energy-startups

https://www.ft.com/content/648a25ce-116d-11e8-940e-08320fc2a277

http://money.cnn.com/2017/10/12/investing/shell-oil-buys-electric-car-charging/index.html

Big oil is dabbling in emerging energy markets because this is where the market is headed. Though their current forms may paint a different picture in the mind, the purpose of these companies is (and always has been) to make money. In the past, that revenue has mostly been based around petrochemicals. But we are headed in a different direction in coming decades. There is no better example than China to see this theory of mine, in action.
Only one country is betting on fossil fuels (possibly 2, considering Canada’s asinine desire to unload hard to prepare bitumen on a world that is moving away from petroleum).

In short, though the future is indeed bright, one has to stay vigilant. Where there is money to be made, the old ways of capitalism are bound to make an appearance if no attempt is made to keep them at bay.

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