Tesla Energy and utility scale projects

[adiggs]

I found this article on oilprice:
Political Rivals Hurl Insults Live Over Power Outages In Australia | OilPrice.com

And it suggests to me an alternative view of what we've been reading about in South Australia, as well as an approach that we might be hearing from fossil fuel interest regarding the idea of bringing storage into the market.

Namely - that the SOURCE of the problems for South Australia's power woes is the aggressive adoption of renewable energy sources. This sounds to me like a reasonable sounding narrative that can be used to oppose renewables adoption.


I don't think this quite fits in with the Shorting Oil thread (my first thought because of the source), and I think this is a big enough topic to be worthy of it's own thread instead of a few posts here and there in a bigger thread. As @jhm has mentioned in the Shorting Oil thread, there are other countries in the world with a need for energy storage to create options for their own energy systems. I foresee a need for regular discussion of Tesla Energy developments around the world!


For now, I am especially interested in hearing from anybody Down Under that can provide some local color; what's really going on, what do the politics look like, does this twitter storm look like it's turning into some real and serious business (or is it just talk)?

 

[renim]

Ok, I'll bite - Queenslander

background on Australia electricity
1/2 of the cost is transmission and distribution (poles and wires)
1/4 of the bill is for the paper shuffler / phone operator (retailer)
1/8 of the cost is for the power station
1/8 of the cost is for mine/well head

in recent years we had 2 energy crisis in Australia, one in Tasmania, and one in South Australia.
They had 3 factors in common

1. they are at the edge of the transmission system, when the transmission goes down, they are vulnerable
2. they over relied on existing renewables, that is if the wind is too high, or the rains were too low, they were vulnerable
3. they prematurely mothballed/closed gas/coal power stations, when power stations are surplus to requirements, why pay for them? (hint to cover when point 1 and 2 occur simultaneously)

• South Australia had a further nuance, they had an ivory tower perspective to efficiency, the realities of non energy grid stability services was a rude awakening to them.
• The states that export gas don't want to lose revenues and royalty for selling it to others. (Ie Qld does coal seam gas, NSW does not do coal seam gas, why should Qld sell natural gas to NSW, if NSW won't use their own anyway?) transitioning from coal to gas in Australia is a transition from a low cost, sure steady supply, to globally cost volatile supply.

(anyway, South Australia needs to get their sugar in order, or else next year their grid will fall over again. (yes it has cost me personally, I had some IP demonstration that was cancelled due to SA grid non outage, outage.))

for the rest of eastern Australia, its mostly different,
presumable an upgrade of the tunnelling and power stations is expected to add a swing 2000 MW of emergency power and storage to pre existing snowy mountains dams. Thats great for solar/wind developers, but make utility battery storage un-needed for some time to come

 

[Bgarret]

The S. Australia situation looks to me like the opening salvo in the coming war between fossil fuels and renewable energy. To date, there have been minor scuffles- net metering, US States banning the direct sale of Teslas, Scott Pruitt, demagoguery of Solyndra, climate change deniers, advocacy for hydrogen cars, Florida's and many southern states solar policies....all minor speed bumps to slow adoption of the wave of renewable energy.

In S. Australia, the gloves are coming off. Storage - battery, pumped or otherwise - directly threatens entrenched fossil fuel interests that have imposed an oligarchy pricing scheme to the detriment of the region and its citizens. Advocates of new renewable, less centralized (and more democratic) technologies - Cannon-Brookes, Elon - are beginning to use their new wealth, power and social media to take on the Koch brothers and their ilk that have distorted markets and bought favorable tax and regulatory regimes from politicians looking for political influence and campaign capital.

If you think S.Australia is a "brawl down under", wait until US utilities start fighting back against solar + storage and the auto and oil industries fight back when the battery costs drop to $100kWh and they are faced with Trillions of dollars of stranded assets, obsolete Capital investments, legacy pension costs and dwindling stock prices. Disruptive technologies are just that, and I can't think of one historic case of those that have amassed wealth and power quietly relinquishing it to a new regime. S. Australia bears watching, as - like Mel Gibson and the Hemsworth brothers, it could be coming to a theater near you....very soon.

 

[larmor]

More to come: Abu Dhabi solar plant in the region where oil comes from. If that is not a warning for oil/lng I'm not sure what is...
Abu Dhabi to Build World's Largest Solar Power Plant

 

[adiggs]

Ok, I'll bite - Queenslander

background on Australia electricity
1/2 of the cost is transmission and distribution (poles and wires)
1/4 of the bill is for the paper shuffler / phone operator (retailer)
1/8 of the cost is for the power station
1/8 of the cost is for mine/well head

in recent years we had 2 energy crisis in Australia, one in Tasmania, and one in South Australia.
They had 3 factors in common

1. they are at the edge of the transmission system, when the transmission goes down, they are vulnerable
2. they over relied on existing renewables, that is if the wind is too high, or the rains were too low, they were vulnerable
3. they prematurely mothballed/closed gas/coal power stations, when power stations are surplus to requirements, why pay for them? (hint to cover when point 1 and 2 occur simultaneously)

• South Australia had a further nuance, they had an ivory tower perspective to efficiency, the realities of non energy grid stability services was a rude awakening to them.
• The states that export gas don't want to lose revenues and royalty for selling it to others. (Ie Qld does coal seam gas, NSW does not do coal seam gas, why should Qld sell natural gas to NSW, if NSW won't use their own anyway?) transitioning from coal to gas in Australia is a transition from a low cost, sure steady supply, to globally cost volatile supply.

(anyway, South Australia needs to get their sugar in order, or else next year their grid will fall over again. (yes it has cost me personally, I had some IP demonstration that was cancelled due to SA grid non outage, outage.))

for the rest of eastern Australia, its mostly different,
presumable an upgrade of the tunnelling and power stations is expected to add a swing 2000 MW of emergency power and storage to pre existing snowy mountains dams. Thats great for solar/wind developers, but make utility battery storage un-needed for some time to come

Interesting stuff @renim. I find I have lots of questions I'd like to ask, but I think the one I'm most interested is in the cost breakdown. Is that approximately the way electric bills break down, or is legislated / designed that way?

And I'm wondering how a utility scale solar / wind / geothermal (any power station that doesn't burn fuel to generate electricity) fits into that - do they get paid the 1/8 for the power station, or do they also get paid the 1/8th for the fuel provider (for a total of 1/4)? The former is good for consumers (renewable electricity would cost less by the cost of the fuel that isn't being burned, the latter would be good for attracting investment by making power stations that don't need to buy fuel more attractive financially.

 

[neroden]

Despite the fact that the main problems in South Australia related to (a) transmission line failures, (b) failure to actually actively manage the grid competently, (c) decisions by fossil fuel plant operators to keep capacity out of the market to raise prices, wind & solar were *immediately* blamed for the failures (inaccurately) by the national government. Which is generally considered to be in the pocket of the coal companies. Giles Parkinson has written a lot of stuff about this and he's kind of disgusted.

This really is the opening skirmish in the big political fight between renewable energy + batteries vs. incumbent fossil fuel privateers. The incumbents, with the national government in their pocket, attempted to create a false narrative to blame renewables for everything which went wrong. The state governments fought back. (This was all happening months ago -- read reneweconomy.com.au.) Individuals have been putting up their own battery systems to escape the problem and that's been reported in the papers. And now we have the involvement of Cannon-Brookes and Musk.

(Don't get me started on the complex politics of natgas in Australia, where the same national party which is promoting coal is promoting *exports* of natgas even while there are intermittent domestic supply shortages and high domestic prices.)

 

[Bgarret]

Interesting stuff @renim. I find I have lots of questions I'd like to ask, but I think the one I'm most interested is in the cost breakdown. Is that approximately the way electric bills break down, or is legislated / designed that way?

And I'm wondering how a utility scale solar / wind / geothermal (any power station that doesn't burn fuel to generate electricity) fits into that - do they get paid the 1/8 for the power station, or do they also get paid the 1/8th for the fuel provider (for a total of 1/4)? The former is good for consumers (renewable electricity would cost less by the cost of the fuel that isn't being burned, the latter would be good for attracting investment by making power stations that don't need to buy fuel more attractive financially.

Excellent breakdown by Bloomberg New Energy Finance on the cost/benefit of the potential S.Australia Tesla battery storage proposal.

Tesla’s $169 Million Battery Play Is Just the Beginning

 

[adiggs]

...

This really is the opening skirmish in the big political fight between renewable energy + batteries vs. incumbent fossil fuel privateers. The incumbents, with the national government in their pocket, attempted to create a false narrative to blame renewables for everything which went wrong. The state governments fought back. (This was all happening months ago -- read reneweconomy.com.au.) Individuals have been putting up their own battery systems to escape the problem and that's been reported in the papers. And now we have the involvement of Cannon-Brookes and Musk.

...

I see it the same way - as the opening skirmish in this big fight between incumbents and disrupters. This video posted over here:
2017 Investor Roundtable:General Discussion

is the best articulation of the fundamental thing at work in the word that I've seen so far - the world of near zero marginal cost energy is arriving. This is going to be good for society in general, not particularly good for the incumbents that are deeply invested in energy that does carry marginal cost (fuel cost to be burned to create electricity).

And I don't see any way for the incumbents to dodge it. The question is how disruptive, how painful, and how fast this will all play out.

 

[adiggs]

Elon Musk has turned Australia’s energy debate on its head

Pretty clear Australia is still in the talking about it stage, but this article is point out how the talk has shifted, and in a very short time. Renewables have gone from "intermittent" to "variable" (same thing really, but one is meant pejoratively, one is is something you work with).

I also get from the article that South Australia has a tender out for 100MW of storage for installation before next summer (which I presume to mean December '17).

I like this observation:
"Musk is a long way from being the first person to explain the future of energy markets to Turnbull or the Coalition. But it may be that Musk can be the acceptable messenger, who can cause them to listen, and bring a change in attitude."

 

[adiggs]

S.A. government eyeing world-first gas plus battery storage units

Some more details on the peaker 250MW gas plant that is also part of South Australia's plan. There is more technical details with the emphasis on combining some battery storage with a peaking plant so that besides electricity. It sounds like we're going to hear about this system in other locales sooner than later:

"
In all, the machine can provide 50MW of GHG-free spinning reserve, flexible capacity, and peaking energy; 25 MW of high-quality regulation; and 10 MVA of reactive voltage support and primary frequency response when not online.

The GE unit was designed specifically to meet with California’s energy plan, which calls for 50 per cent renewables by 2030 and may aim for 100 per cent by 2045."

The article is thinking S.A. is planning on 5 of these, and is also thinking of them as spread out around the grid rather than being concentrated in one place. Flexibility, response, distributed.

 

[renim]

Interesting stuff @renim. I find I have lots of questions I'd like to ask, but I think the one I'm most interested is in the cost breakdown. Is that approximately the way electric bills break down, or is legislated / designed that way?

And I'm wondering how a utility scale solar / wind / geothermal (any power station that doesn't burn fuel to generate electricity) fits into that - do they get paid the 1/8 for the power station, or do they also get paid the 1/8th for the fuel provider (for a total of 1/4)? The former is good for consumers (renewable electricity would cost less by the cost of the fuel that isn't being burned, the latter would be good for attracting investment by making power stations that don't need to buy fuel more attractive financially.

I'm in Qld,

• 1/2 the bill is for transmission/distribution. In my case that is a state owned utility called Energex
• 1/4 the bill is for wholesale price, this is what goes to the powerstations (private and public), since the powerstation pays the mine (private only), it also includes the fuel bill. This generally does not get broken out, presumably each powerstation has its own mix of supplies and hedges etc.
• 15 % is green schemes, payment for network metering and other renewable costs (see lower table for precision)
  
• ~15% is retailer costs and margin, basically the un-help desk to intercept real people from talking to Energex

In general, Australia State governments built most or all of the power infrastucture, but over the past 20 years have privatised

• retailing (the power bill) many entrants, very low customer loyalty
• power stations

http://www.aemc.gov.au/getattachmen...4d4/2016-Electricity-Price-Trends-Report.aspx
recently hazelwood power station was retired, its in Vic, but it affects SA.

for Qld, this is the costs given, here, the retailer, powerstation, and mine costs are lumped togerther in 'competitive market'

FWIW, the current problem in South Australia is not too much intermittant energy, its too little robustness due to powerstation retirement, and its going to get worse. South Australia does not curtail renewable electricity, they can consume or export it. The $550million to be spent on powerstation and battery, is money that could've productively been spent on more solar/wind, but isn't, because their grid is now too fragile.

 

[adiggs]

It appears that Victoria is also seeking an energy storage system, with a tender open for 20 MW / 80 MWh by this summer (which I take to mean Dec '17), and another 50 MW (guessing 200 MWh) by next summer.

Victoria’s energy storage deadlines could rule out solar thermal

Though they are theoretically open to any of a variety of storage systems, the nearer timeline suggests a battery system is nearly a requirement.

 

[adiggs]

Wow, just wow:
Gas generators hold South Australia consumers to ransom, again

It may be legal, but in exchange for short term profits, these businesses are going to see their customers revolt.

 

[Discoducky]

Those be some nasty price spikes. Hopefully batteries to the rescue very soon!

 

[Fast Laner]

Good read on use of batteries for mobility and storage published by german daily newspaper "Frankfurter Rundschau"

Geschäft mit Autobatterien nimmt Fahrt auf

 

[TheTalkingMule]

Wow, just wow:
Gas generators hold South Australia consumers to ransom, again

It may be legal, but in exchange for short term profits, these businesses are going to see their customers revolt.

It's my understanding that there were plenty of legislative and judicial hurdles to these generators being able to export LNG. As in the US, the people are getting precisely what they voted for. Nevada filled their House and Governor's office with NV Energy employees and got screwed. They have now very quickly revolted and seem to have easily won. This will very likely lead to a revolt in the land of Oz, those people don't play.

I still think you take this case study as the foundation of a grand tax/budget/priority bargain in the US. These frackers hold more sway than people think, especially in swing and conservative states, and would like nothing more than 5 years of stability to make their billions and head off into the sunset.

 

[adiggs]

This isn't a specific incremental big scale project, but I still found it interesting reading, and likely a big source of future reading for us all:
How Horizon Power plans to remove world’s biggest fossil fuel subsidy

This outfit, Horizon Power (if I'm reading the article correctly), is the vertically integrated power company for Western Australia - an awfully big space (by volume), with a small customer base (# of people). Sounds like they are aggressively shifting from a centralized power grid / system, to more micro-grids, distributed power, etc.. The economics are well established to make the transition friendly (by reducing a subsidy that brings $2/kwh power to people at $.26/kwh).

I expect to see a lot of early market evolutions showing up at scale here first (or at least early), and then percolating out to other utilities and countries.

It being Australia, this might be a particularly good place for Tesla Solar to be shipping those roofs to get started.

 

[Skotty]

The S. Australia situation looks to me like the opening salvo in the coming war between fossil fuels and renewable energy. To date, there have been minor scuffles- net metering, US States banning the direct sale of Teslas, Scott Pruitt, demagoguery of Solyndra, climate change deniers, advocacy for hydrogen cars, Florida's and many southern states solar policies....all minor speed bumps to slow adoption of the wave of renewable energy.

In S. Australia, the gloves are coming off. Storage - battery, pumped or otherwise - directly threatens entrenched fossil fuel interests that have imposed an oligarchy pricing scheme to the detriment of the region and its citizens. Advocates of new renewable, less centralized (and more democratic) technologies - Cannon-Brookes, Elon - are beginning to use their new wealth, power and social media to take on the Koch brothers and their ilk that have distorted markets and bought favorable tax and regulatory regimes from politicians looking for political influence and campaign capital.

If you think S.Australia is a "brawl down under", wait until US utilities start fighting back against solar + storage and the auto and oil industries fight back when the battery costs drop to $100kWh and they are faced with Trillions of dollars of stranded assets, obsolete Capital investments, legacy pension costs and dwindling stock prices. Disruptive technologies are just that, and I can't think of one historic case of those that have amassed wealth and power quietly relinquishing it to a new regime. S. Australia bears watching, as - like Mel Gibson and the Hemsworth brothers, it could be coming to a theater near you....very soon.

IMHO...load balancing issues is where the fossil fuel industry will attack, because it is where most renewables advocates are weakest. Too many renewables advocates have dreamy ideas about magic alignments of a combined renewable generation matching consumer usage (trying to brush the problem under the rug or pretend it doesn't exist), when what is really needed is boat loads of stationary storage. More Gigafactories. We need Tesla Powerpacks being handed out like candy.

Shore that up, and then they will attack by claiming the batteries are wasteful and toxic, so make sure to also CYA there, and have a recycling plan in place for however many decades down the line the batteries need to be replaced.

 

[adiggs]

Another island looking for energy storage:
Norfolk Island has “too much” solar, now it wants storage

Not exactly big scale the way the other tenders in this thread - this island has 1.4MW of solar installed (whole island), but that IS enough that the island's duck curve shows solar fully producing energy demand by day (and then burning diesel by night).

Australia is proving to be an awfully interesting place to learn about, if you'd like to see a possible future for energy grids.

"Expressions of interest are due the beginning of May".

 

[kenliles]

Great article over at electrek
Tesla’s new patent for its Powerpack explains how its energy storage stations can go up to 1 GWh