The Mid North is set to become home to the world’s biggest battery, with the state government signing a historic agreement with French renewable energy company Neoen and US sustainable energy company, Tesla.
The 100-megawatt Tesla lithium ion battery energy storage system will be paired with Neoen’s Hornsdale Wind Farm, north of Jamestown.
The deal comes after the South Australian government announced it would take greater control over its energy usage in March this year, following what Premier Jay Weatherill described as an “unnecessary load-shedding event” in February and the state-wide blackouts last year.
The battery is set to operate at all times and provide energy stability for renewable energy sources, while also providing back-up power in cases of electricity shortfall.
Mr Weatherill confirmed at a press conference with Tesla and Neoen representatives at Adelaide Oval on Friday that 91 expressions of interest were lodged for the project, with Tesla and Neoen chosen as the preferred consortium.
Tesla chief executive officer, Elon Musk, famously promised to deliver the storage system within 100 days or it is free, and confirmed the commitment remained in place with the state government during the press conference.
The 100-day time frame will begin once the grid interconnection documentation is signed. The system is expected to be installed before summer but there was no confirmation of how much taxpayers would contribute to the project.
Mr Weatherill described the consortium deal as an “extraordinary collaboration on an international basis.”
“This project will open up new possibilities for renewable energy in this state, this nation and around the world … it starts here in South Australia,” Mr Weatherill said.
Mr Musk said that many local jobs would be created during the installation phase of the storage system.
He said the facility would also “have some value as a tourism spot for a while”.
Northern Areas Council mayor Denis Clark said the deal would have long-term benefits for both Jamestown and the region.
“It sures up our employment for the long-term,” Mr Clark said.
“But it is not just great news for Jamestown, it is critical news for our region’s benefit.”
He said the battery would have “enormous flow-on effects” for other towns due to the increase in employment.
The mayor also said that public support would be strong for the project.
“It (battery storage) has much less of a visual impact compared to turbine towers … I think the community will welcome the news,” he said.
South Australian-based business Consolidated Power Projects was confirmed by Mr Weatherill as the successful project contractor.
MUSK ADMITS TO ‘RISK’
Tesla founder Elon Musk conceded during the press conference that the ambitious project came with risks.
“There is certainly some risk because this will be the largest battery in the world by a significant margin,” Mr Musk said.
“It will be three-times as powerful as the next biggest battery installation in the world.
“I see this as something the world will look at as an example of how to do large-scale battery applications for the grid.
“We need to deliver, we need to get it done … and make sure it is working properly”.
IMPACT ON POWER PRICES
Mr Musk would not be drawn on the exact cost of the project, but said the technology would bring prices down for South Australian consumers, who are currently experiencing the highest power prices in the world.
International Head of Energy at Tesla, Cal Lankton, said the project would lower electricity costs for consumers.
“As opposed to being something that cost taxpayers money … it is actually going to provide price stability, market stability and lower prices overall for customers, especially at the summer peak-months.”
LIFE OF SYSTEM
The bold storage system batteries are expected to last about 15 years, but depend on their usage patterns, according to Mr Musk.
He confirmed that the electrical elements of the system were expected to last between 20-30 years, with extra batteries able to be introduced into the system to fill storage short-falls over time. The lithium ion batteries can also be recycled.
COAL VS RENEWABLE ENERGY
On federal government criticism of South Australia’s renewable energy reliance – and the interests of some to build more coal-fired power-stations to provide base-load power – Mr Musk said battery storage would revolutionise energy across the world.
Both Mr Musk and Mr Lankton agreed that any new energy source would be built with battery storage in the future.
The Tesla CEO said that coal provided long-term economic challenges.
“The fundamental challenge of coal-fired power stations is that they are quite difficult to be financed,” he said.
“The writing is on the wall for the long-term future of coal – it does not have a long term future.
“When one looks at building or upgrading a coal-fired power plant … investors know that coal does not have a long term future so the capital cost is incredibly high.
“They want to charge an incredibly high interest rate because they know it is not going to last 30 years.”
NEOEN LOOKS TO FUTURE
Neoen deputy chief executive Romain Desrousseaux was confident in working with Tesla to deliver the battery storage system.
“From the beginning we have been looking for battery suppliers, and Tesla was quickly identified,” Mr Desrousseaux said.
“The challenge is not only to build it but to have it working with the grid.”
Managing Director of Neoen Australia, Franck Woitiez said the system would provide cheaper electricity for consumers.
“The wind farm is selling electricity between half and two thirds of the average price of the market,” Mr Woitiez said.
“With the battery storage we will be able to bring cheap electricity … when the people need it.”
Mr Weatherill confirmed that 70% of the battery is reserved for South Australian government energy purposes, with the remaining 30% left for market-based activity.
Mr Desrousseaux said that Neoen had no plans to extend the Hornsdale Wind Farm, but confirmed the company was continuing to investigate further options for wind and solar investment in South Australia within the next 12-18 months.
It remains unclear whether that investment includes proposed plans to build a wind farm and energy park at Beetaloo Valley.