The batteries that Tesla has implemented have been working too fast for the company to get paid. Elon Musk’s company claims that they haven’t been paid for more than a third of the electricity that they are producing for the South Australian state.
The Tesla batteries provide back-up electricity when generators fall short or fail. How these companies get paid depends upon the response time of the energy. The energy market operator has three different response times for the amount of money paid; 6 second, 1 minute and 5 minutes. However batteries can provide back-up energy in less than 200 milliseconds. So any power that is recovered within 200 milliseconds and 6 seconds is too fast for it to be registered.
As far as the energy market operator is concerned, the power never went out and that is what Tesla is having trouble with. The Australian Energy Market Operator (AEMO) current specifications are based upon fossil fuels and how they operate when the power goes out.
As the specifications are based upon older technology it is harder for the fast acting batteries to be recognised and be paid accordingly. The installation that Tesla created is the largest lithium-ion battery in the world. The power initiative was also built within 100 days as former South Australia Premier, Jay Weatherill, made a bet with Elon Musk that it couldn’t be done.
The Frequency Controlled Ancillary Services (FCAS) is a term that is applied to a group of services that help maintain power systems when they go out. When the FCAS is used there is a considerable jump in the price of electricity. Examples can be seen when South Australia reached a $13,400 megawatt hour and Victoria reached a $10,152 megawatt hour earlier this year in January. The aim for the batteries is to provide cheap immediate, energy that is used to combat the high process that normal FCAS services use.
Tesla believes that Hornsdale in South Australia has demonstrated how effective battery energy storage can be and how it can provide aid when critical systems are brought offline. With the implementation of the batteries the FCAS forecasted the price per megawatt hour to be $9000 which is considerably higher than the normal $20 megawatt hour. When Tesla’s battery installation was called to aid in the problem, the plant managed to reduce the price to sub $300 megawatt hour.
With the obvious success that the battery plant has had in South Australia, can we expect to see this technology implemented in other cities in Australia?