07/04/2018

How Elon Musk's Big Tesla Battery Is Changing Australia's Power Landscape

ABC News - Nick Harmsen


Tesla's big battery is launched in South Australia (ABC News)

 Key points
  • AEMO says the Hornsdale Power Reserve is capable of charging at a rate of 80 megawatts and discharging at 100 megawatts
  • It has a storage capacity of 129 megawatt hours
  • That means it could operate for about 75 minutes at full capacity
The world's biggest lithium-ion battery — built by tech billionaire Elon Musk's company Tesla last year — has survived its first summer in South Australia's mid-north.
And according to a new report by the Australian Energy Market Operator (AEMO), it's outperforming coal and gas generators on some key measures
Here's a look at how it's performed and its potential impact on the future of power in Australia.

The big battery could stop another statewide blackout
In September 2016, South Australia was plunged into darkness when storms tore through transmission lines.
The faults in the transmission system prompted several wind farms to unexpectedly power down.
With that sudden loss of generation, South Australia immediately began drawing more power across the interconnector to Victoria, which overloaded and switched off.
Transmission towers that were downed in strong winds near Melrose in South Australia in 2016. (ABC News: Tom Fedorowytsch)
The 100 MW output of the Tesla battery might appear small compared to South Australia's peak energy demand of about 3000 MW, but its ability to quickly inject electricity within a fraction of a second is a large factor in its success.
AEMO is now working on a new protection scheme, and Tesla's big battery will play a part.
It aims to detect high flows on the interconnector and trigger the battery to start discharging its full output as quickly as possible, while shedding power to homes and businesses if required.
And future batteries could also be a part of the scheme in the future.

The battery is capable of responding more quickly to problems than coal, gas or hydro
According to AEMO the speed, precision and agility of the battery is unprecedented in dealing with both major power system disturbances and day-to-day frequency variations.
And on December 18 it got the chance to prove it, when a coal generator in New South Wales tripped.
The battery was able to respond to the sudden loss of 689 megawatts of generation within a fraction of a second.
A gas or steam turbine might have taken minutes to respond and adjust.
The substation near Jamestown in July this year, before construction began on the giant battery. (ABC News: Nick Harmsen)
The Hornsdale Power Reserve is registered to provide what is known in the power markets as Frequency Control Ancillary Services (FCAS).
FCAS requires providers to keep a little bit of power in reserve — which the market operator can use to help correct the supply/demand balance in response to minor changes in load or generation.
Some FCAS services are reserved for use in a major event — like a major power station fire, a transmission line tripping or a big industrial load switching off.
Until Tesla's big battery switched on, FCAS services in Australia had only ever been provided by traditional coal, gas, diesel and hydro generators.

It has saved electricity customers cold hard cash
According to the report, early evidence shows the battery is helping cut some of the costs borne by South Australian electricity users.
With a high penetration of wind farms — which until recently haven't offered FCAS — the state has sourced much of it back up power from generators on the eastern seaboard.
However, when the interconnector to Victoria is under maintenance AEMO is required to source some frequency control within the state.
Before the Tesla battery, there were only four gas-fired power stations offering those services.
Elon Musk's Tesla giant battery contributes to the backup power market. (AAP: Ben Macmahon)
The problem is, they're not always available and can be very expensive, a cost which eventually flows through to South Australian energy consumers.
To put it in context, on a single day in October 2016, the Australian Energy Regulator found the cost of regulation services within SA exceeded $4.5 million, while buying these services has cost the state more than $50 million since 2015.
But with the battery now offering FCAS services at lower prices, the South Australian market has not seen similar price spikes over Summer.

It has been a money maker
According to analysis from consulting firm Energy Synapse, the Hornsdale Power Reserve has made an estimated $1.4 million so far by buying power when prices are low and selling when they're high.
The overwhelming majority of this money – 95 per cent - was made on five very hot days in January and February, when prices were at their most volatile.
Interestingly, the Energy Synapse analysis estimates that the battery actually lost money in the energy market on 57 days.
But that doesn't include the money made from FCAS.
It's also not entirely clear how Neon's money-making arbitrage strategy works, given it also owns the neighbouring Hornsdale Wind Farm, which is contracted to provide energy and shares a grid connection point.
Energy Synapse's founder Marija Petkovic says the battery's operators will need to be careful to avoid needlessly cycling it for little financial gain.
"This is an important consideration because the lifetime of a battery is strongly related to how many times it is cycled," she wrote.

But, more financial incentives for battery owners should be introduced
The AEMO found the battery provided high-quality back up power and could respond more quickly to a major problem than traditional coal, gas or hydro generators.
But it said market didn't adequately recognise or reward the agility of batteries.
It's flagged the possibility of new, faster moving frequency control markets, like those offered overseas, to make sure Australia maximises the benefit of new batteries.

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Mark Carney Warns Of Climate Change Threat To Financial System

The Guardian - 

Bank of England governor says firms must acknowledge risks to avoid ‘catastrophic impact’
Mark Carney said there were growing opportunities for firms to finance the transition to a low carbon economy. Photograph: Victoria Jones/PA
The governor of the Bank of England has warned of the “catastrophic impact” climate change could have for the financial system unless firms do more to disclose their vulnerabilities.
Telling banks and insurers they would need to provide more information about the risks they might face from climate change, Mark Carney said failure to do so would have damaging effects for financial stability.
He said the finance industry could be forced into making rapid adjustments if they did not gradually expose where their climate change risks might lie, which he said could trigger steep losses.
The governor warned of a “climate Minsky moment”, referring to the work of the economist Hyman Minsky, whose analysis was used to show how banks overreached themselves before the 2008 financial crisis.
“Given the uncertainties around climate, not everyone will agree on the timing or scale of the adjustments required … [but] the right information allows sceptics and evangelists alike to back their convictions with their capital,” Carney said.
Speaking at a summit of central bank governors in Amsterdam, Carney said there were growing opportunities for firms to finance the transition to a low carbon economy. He said new technology investments and long-term infrastructure projects would need to be financed at roughly quadruple the current rate.
His intervention comes as Threadneedle Street ramps up its assessment of how well insurers are identifying, measuring and mitigating weather-related risks this year. Insurers were exposed to steep losses by extreme weather events, such as Hurricane Harvey, in the US last year.

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Solar PV And Wind Are On Track To Replace All Coal, Oil And Gas Within Two Decades

The Conversation -  | 

Solar photovoltaics are now the world’s leading source of new electricity generation. US Air Force
Solar photovoltaic and wind power are rapidly getting cheaper and more abundant – so much so that they are on track to entirely supplant fossil fuels worldwide within two decades, with the time frame depending mostly on politics. The protestation from some politicians that we need to build new coal stations sounds rather quaint.
The reality is that the rising tide of solar photovoltaics (PV) and wind energy offers our only realistic chance of avoiding dangerous climate change.
No other greenhouse solution comes close, and it is very hard to envision any timely response to climate change that does not involve PV and wind doing most of the heavy lifting.
About 80% of Australia’s greenhouse gas emissions are due to the use of coal, oil and gas, which is typical for industrialised countries. The land sector accounts for most of the rest.
Australian greenhouse gas emissions in 2016. ABS, Author provided
Sadly, attempts to capture and store the carbon dioxide emissions from fossil fuels have come to naught due to technical difficulties and high cost. Thus, to curtail global warming we need to replace fossil fuel use entirely, with energy sources that meet these criteria:
  • very large and preferably ubiquitous resource base
  • low or zero greenhouse gas emissions and other environmental impacts
  • abundant or unlimited raw materials
  • minimal security concerns in respect of warfare, terrorism and accidents
  • low cost
  • already available in mass production.
Solar PV meets all of these criteria, while wind energy also meets many of them, although wind is not as globally ubiquitous as sunshine. We will have sunshine and wind for billions of years to come. It is very hard to imagine humanity going to war over sunlight.
Most of the world’s population lives at low latitudes (less than 35°), where sunlight is abundant and varies little between seasons. Wind energy is also widely available, particularly at higher latitudes.
PV and wind have minimal environmental impacts and water requirements. The raw materials for PV – silicon, oxygen, hydrogen, carbon, aluminium, glass, steel and small amounts of other materials – are effectively in unlimited supply.
Wind energy is an important complement to PV because it often produces at different times and places, allowing a smoother combined energy output. In terms of worldwide annual electricity production wind is still ahead of PV but is growing more slowly. The wind energy resource is much smaller than the solar resource, and so PV will likely dominate in the end.
Complete replacement of all fossil fuels requires solar and wind collectors covering much less than 1% of the world’s land surface area. A large proportion of the collectors are installed on rooftops and in remote and arid regions, thus minimising competition with food production and ecosystems.
The more widely PV and wind generation are distributed across the world, the less the risk of wide-scale disruption from natural disasters, war and terrorism.
Other clean energy technologies can realistically play only a minor supporting role. The solar thermal industry is hundreds of times smaller than the fast-growing PV industry (because of higher costs). Hydro power, geothermal, wave and tidal energy are only significant prospects in particular regions.
Biomass energy is inefficient and its requirement for soil, water and fertiliser put it in conflict with food production and ecosystems. Nuclear is too expensive, and its construction rates are too slow to catch PV and wind.

A renewable grid
PV and wind are often described as “intermittent” energy sources. But stabilising the grid is relatively straightforward, with the help of storage and high-voltage interconnectors to smooth out local weather effects.
By far the leading storage technologies are pumped hydro and batteries, with a combined market share of 97%.
The cost of PV and wind power has been declining rapidly for many decades and is now in the range A$55-70 per megawatt-hour in Australia. This is cheaper than electricity from new-build coal and gas units. There are many reports of PV electricity being produced from very large-scale plants for A$30-50 per MWh.
Solar PV and wind have been growing exponentially for decades and have now reached economic lift-off. In 2018, PV and wind will comprise 60% of net new electricity generation capacity worldwide. Coal, gas, nuclear, hydro and other renewable capacity comprise the rest. Globally, US$161 billion will be invested in solar generation alone this year, compared with US$103 billion in new coal and gas combined.
The path to dominance by PV and wind. In 2018, PV and wind are likely to comprise 60% of net new electricity generation capacity worldwide. Andrew Blakers/Matthew Stocks, Author provided
PV and wind are growing at such a rate that the overall installed generation capacity of PV and wind has reached half that of coal, and will pass coal in the mid-2020s, judging by their respective trends.
In Australia, PV and wind comprise most new generation capacity. About 4.5 gigawatts of PV and wind is expected to be installed in 2018 compared with peak demand of 35GW in the National Electricity Market. At this rate, Australia would reach 70% renewable electricity by 2030.
Together, PV and wind currently produce about 7% of the world’s electricity. Worldwide over the past five years, PV capacity has grown by 28% per year, and wind by 13% per year. Remarkably, because of the slow or nonexistent growth rates of coal and gas, current trends put the world on track to reach 100% renewable electricity by 2032.
Current world electricity generation trends, extrapolated to 2032. Andrew Blakers/Matthew Stocks, Author provided
 Deep cuts (80% reduction) in greenhouse gas emissions require that fossil fuels are pushed out of all sectors of the economy. The path to achieve this is by electrification of all energy services.
Straightforward and cost-effective initial steps are: to hit 100% renewable electricity; to convert most land transport to electric vehicles; and to use renewable electricity to push gas out of low-temperature water and space heating. These trends are already well established, and the outlook for the oil and gas industries is correspondingly poor.
The best available prices for PV already match the current wholesale price of gas in Australia (A$9 per gigajoule, equivalent to A$32 per MWh for heat).
High-temperature heat, industrial processes, aviation and shipping fuel and fugitive emissions can be displaced by renewable electricity and electrically produced synthetic fuels, plastics and other hydrocarbons. There may be a modest additional cost depending on the future price trajectory of PV and wind.
Electrifying the whole energy sector of our economy of course means that electricity production needs to increase massively – roughly tripling over the next 20 years. Continued rapid growth of PV (and wind) will minimise dangerous climate change with minimal economic disruption. Many policy instruments are available to hasten their deployment. Governments should get behind PV and wind as the last best chance to deliver the necessary solution to global warming.

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