Elon Musk owned Tesla installed a battery farm in South Australia in 2017 and has since helped residents save $116 million in energy costs, Bloomberg reports.
The company installed the world’s biggest lithium-ion batter to help reduce the risk of blackouts as the country moved to renewable power generation.
Operating via the Hornsdale Power Reserve, it has helped to restore stability to the network and lower the costs of running the power grid, according to reports.
The decision to install the battery came after a Twitter ‘bet’ between Musk Australian software billionaire Mike Cannon-Brookes where Musk promised he could build the battery ‘in 100 days or its free’.
Two years on and the battery farm has slashed the costs required to regulate the South Australian grid by about 90 per cent, Bloomberg claims.
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Tesla won a bid in July to build a 129 megawatt hour (MWh) battery and had it ready by the start of the southern summer in December 2018
Operating via the Hornsdale Power Reserve, it has helped to restore stability to the network and lower the costs of running the power grid, according to reports
The 129 megawatt system installed by Tesla offers a way to tackle the variable power generated by wind and solar generators – it stores up the energy until it is needed and distributes it through the grid during lower generation periods.
They smooth out the power flows that can threaten the stability of a network made up primarily of renewable sources of energy.
This is what was happening in Australia until the Tesla battery was installed – but since then it has helped respond to those issues quickly.
The battery was built at a wind farm operated by France’s Neoen that is located about 225 km (141 miles) from the South Australian capital of Adelaide and will supply power to the lithium-ion storage cells.
It was installed near Jamestown, in South Australia’s mid-north.
A state-wide blackout in 2017 was blamed by opponents of renewable energy on the rush to embrace wind and solar power – this led to the Musk bet on Twitter.
‘The grid has a heartbeat that needs to be regulated,’ Garth Heron told Bloomberg.
He is the head of development for Neoen – the company behind the grid in South Australia and said ‘there will be a faster battery roll-out than most people expect.
‘They really are able to solve a multitude of problems.’
The battery has been designed to help cover temporary dips in wind power, say for 15 minutes, or help control frequency on the grid at times when natural gas-fired plants are unable to help balance generation and power demand.
The 129MWh lithium ion battery was installed by TESLA near a wind farm close to Jamestown, in South Australia’s mid-north
![Musk said in July 2018 that the cost to Tesla would be '$50 million [US $39 million/ £29 million] or more' if it failed to deliver the project on time](https://i.dailymail.co.uk/1s/2020/03/06/13/25624104-8082841-image-a-20_1583500526702.jpg)
Musk said in July 2018 that the cost to Tesla would be ‘$50 million [US $39 million/ £29 million] or more’ if it failed to deliver the project on time
‘What they’re trying to do is buy a little bit of time for other systems to respond to fluctuations,’ said Bikal Pokharel, an analyst with energy consultants Wood Mackenzie in Singapore.
The battery helped Hornsdale reduce network costs by about $116 million in 2019 which Heron says will be passed on to households and businesses in the area.
‘Not only has the Hornsdale Power Reserve identified how batteries can physically help the grid, it has also showed how they can make money along the way,’ BNEF analyst Ali Asghar told Bloomberg.
‘More importantly, it has boosted investor confidence in the storage market by showing developers how revenues from different power based services can be stacked to build a business case for storage in Australia.’
The state has yet to say how much it paid for the battery, which is part of a £293 million ($390 million) plan that includes diesel-fired generators to help keep the lights on following a string of blackouts over the past 18 months.
Musk said in July 2018 that the cost to Tesla would be ‘$50 million [US $39 million/ £29 million] or more’ if it failed to deliver the project on time.
He said when it was switched on that he hoped the battery will be the first step to Australia becoming a renewable energy powerhouse.
Premier Jay Weatherill said: ‘While others are just talking, we are delivering our energy plan, making South Australia more self-sufficient, and providing back up power and more affordable energy for South Australians.’
Analysts have estimated the battery should cost around $750 (US $585/£439) to $950 (US $741/£556) per kilowatt, or up to $95 million (US $74 million/£56 million).
WHAT IS TESLA’S ‘GIGAFACTORY’?
Tesla’s ‘Gigafactory’ is located on Electric Avenue in Sparks, Nevada.
The factory’s name stems from ‘giga,’ a unit of measurement that represents billions.
One gigawatt hour is the equivalent of generating one billion watts for one hour — one million times that of one kilowatt hour.
Tesla says the factory will be producing 35 gigawatt hours of batteries by 2018.
The current structure has a footprint of 1.9 million square feet, which houses 4.9 million square feet of operational space across several floors
It’s currently about 30 percent finished – and once complete, it will be the biggest building in the world
That’s the equivalent to the entire world’s production in 2014.
New York City uses around 52 gigawatt hours of energy per year.
Once completed in 2020, the factory is set to become one of the biggest buildings in the world, with a final size of 10 million square feet.
Already, the current structure has a footprint of 1.9 million square feet, which houses 4.9 million square feet of operational space across several floors.
‘Once complete, we expect the Gigafactory to be the biggest building in the world,’ Tesla said.