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Kent Moors

Kent Moors

Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk management, emerging market economic development, and market risk assessment. His…

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Tesla Just Changed The Energy Storage Game

Musk

Back when Tesla Inc. (TSLA) unveiled a test of its new “Powerpacks” – batteries to power homes and businesses – it was clear that the company’s future wasn’t in building cars…

But in providing for a broad spectrum of power sources.

Now, most people still regard lithium-ion batteries as something just to do with cellphones or electric cars.

But now, a major announcement by Tesla indicates the shift to serving large-scale power needs is happening sooner than expected.

This could be an absolute game changer in energy storage…

And could revolutionize energy worldwide.

In Less Than 100 Days, Tesla Will Open the Largest Ever Battery Project

In less than 100 days, the mother of all lithium-ion batteries will be operating in South Australia… charged by renewable energy.

The 129-megawatt hour (MWh) project comprises the world’s largest lithium-ion energy storage system ever – more than 60% larger than an 80 MWh facility at Mira Loma in Ontario, California.

The project combines a huge system designed by Tesla with a nearby 99 turbine wind farm operated by French renewable energy company Neoen. And the prospect may be the most important advance in electricity production in decades.

To add some spice to the announcement, Tesla founder and head Elon Musk pledged that he would provide the project for free if the 100-day commitment could not be met.

That means the massive series of battery packs and inverters – the battery actually encompasses two subsystems each having 198 Tesla “Powerpacks” and 24 inverters – is supposed to be online by the beginning of December.

And the location in South Australia is no accident…

Tesla’s Batteries Will Help Prevent Blackouts

South Australia has been plagued by increasing blackouts. Last year the problem accelerated with residences in some areas left without power for weeks.

The Tesla battery will not completely solve the problem (it’s designed to provide electricity for about 30,000 homes). But an initial success will allow for a rapid expansion of applications.

Now, neither Tesla nor the South Australian state government will directly comment on what the system costs. Related: Russian Energy Minister: No Additional Output Cuts Are Needed

However, anecdotal industry information puts it at between $A200 to $A400 million ($155 to $310 million). For his part, Musk has estimated the cost to be “around” $42 million, while Tesla’s battery division head Lyndon Rive had initially out the price tag at about $51 million.

Any of these makes the battery project doable, especially when there are government players interested and worsening power distribution problems.

Without providing any details, South Australia’s Premier Jay Weatherill added on Saturday (July 8) that the entire project would fall “well within” the amount budgeted for renewable energy.

Each Powerpack charges using the renewable energy provided by Neoen and then distributes electricity during the peak demand period. This allows a better operation of the South Australian grid.

What is even more important from the state’s perspective is the ability of the system to inject emergency backup power in the event of a blackout or rolling brownout.

The Mira Loma facility in California has already provided a proof of concept that this works…

This is the “Holy Grail” of Energy Storage

Using Tesla Powerpacks and operated by Southern California Edison, it has been operating flawlessly since being put on line last December. That one is charged by both solar and wind power.

The 80 MWh station is intended to save power generated from renewable sources as well as providing backup against blackouts.

The next two stages in this fascinating development are just as exciting.

First, expanding usage of these huge batteries does not require a physical expansion of existing infrastructure. It is more efficient to place stand-alone stations or substations near power sources and communities being serviced.

While there is a clear advantage to having the leverage of placing additional electricity onto the grid as needed, the requirement does not mean that the traditional economy-of-scale approach is used.

Serializing stations in a spread-out network with access to the grid, rather than serializing the equipment in a single location, improves performance.

Second is the “Holy Grail” in all of this. Five or six years ago I began addressing another matter upon which this Tesla project now focuses…

Tesla is Making a Technological Leap Forward

I’m talking about what we in the business call “inversion.”

The inverters contained within the lithium-ion battery array address the single most negative aspect of generating electricity, from wind or solar, for transport.

Wind and solar harvest energy in direct current (DC), but electricity is transported over power lines using alternating current (AC). The switch from one to the other is called “inversion,” and it can waste a third or more of the electricity produced.

Tesla is now working on reducing that amount by integrating their inverters with the rest of the system. Retaining just a fraction of the electricity that would otherwise be lost through inversion will have a major impact on the bottom line.

In fact, solar and wind already have grid parity, i.e., they generate power at the same cost as more traditional sources, in many places globally (including South Australia).

And now, the combination of lithium-ion batteries with improved inversion technology will make them even more cost-effective – and be an absolute game changer.

By Dr. Kent Moors

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  • Jhm on July 17 2017 said:
    Nice write up. I would also point out that adding batteries to the grid is beneficial for making good economic use of traditional baseload generators. While most attention goes to batteries as a form of peak power, they are also helpful in soaking up surplus power. For example, if wholesale power prices are spending too much time at prices below $20/MWh, this undermine the ability of baseload generators to turn a modest profit. Batteries step in to buy up these super low prices to preserve an average price that is economic for baseload.

    This is also why collocation with wind and solar. We don't want excess power from intermittent source to flood the market when prices are below $20/MWh. Capturing this excess power at the source is one way to minimize the network cost. Indeed a power line connecting a solar farm to the transmission grid might only be used when the sun shines, but if there is on site storage then peak load is less and the line can be used 24/7.

    So batreries make for better utilization of transmission assets as well as baseload generation assets. They do not undermine these traditional grid assets. They complement them and make them even more useful.
  • Georg on July 18 2017 said:
    I would think that working on super capacitors would be more important.
    Quick charging super capacitors and solar power and goodbye oil except for
    industrial and domestic use.
  • brian armstrong on July 18 2017 said:
    Having solar I realised that if there's a grid failure I will loss solar power .thinking of a solution I realised if I had a electric car all the power from the solar could goto the cars battery's and also give me limited power to use at home
  • anon on July 18 2017 said:
    @Brian Armstrong
    This is already being tested in a city (forget where...Netherlands?) Where electric cars plug in all over the neighborhood to store and provide electricty for the houses and each other. Grid uses solar and wind primarily. Cars provide storage and secondary electricity when needed.

    A "mobile grid"
  • manofsteel194275 on July 18 2017 said:
    More pollution, so what, any battery can do this, another trick to charge us more for energy, you can bet on that. Musk, is one of their boys, trusting him is like trusting a rattle snake.
  • David Hrivnak on July 23 2017 said:
    I agree Tesla is on the front end of this exciting and clean technology. The new power wall 2 is now 13 KWh up from 10 and the price has dropped from $7500 to $5500. It won't be long before we can all add a PowerWall.
  • larry on July 27 2017 said:
    solar and wind do not have grid parity. they are far more expensive.

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