For anyone wondering whether money should be spent on renewable energy, look no farther than the beat-down The Hornsdale Power Reserve (HPR) has given the fossil fuel industry in just two years in South Australia.
The Hornsdale Power Reserve owned and operated by Neoen, a French renewable energy producer, was built by Elon Musk and Tesla back in 2017. In its first year of operation in 2018, The Hornsdale Power Reserve saved consumers AUD40 million ($26.14). In 2019, that number soared to AUD116 million ($75.78).
After a total investment of just $96 million by Neoen, and the state government only needing to chip in $4 million a year for 10 years, the return on investment has the potential to be huge.
And, it will only get better from here. Currently, the Tesla Powerpack stores 100 MW/129MWh, but they plan on increasing the storage by another 50MW/64.5MWh within the first half of 2020.
In an interview with RenewEconomy, Garth Heron, the head of development at Neoen Australia, spoke about the benefits of having renewable battery storage:
Hornsdale has just been the best asset for the state, and for us as well, it’s a real success story. We have shown that these kinds of systems can work. It saves consumers a lot of money, and it’s something we should be rolling out right across the market.
To see just how much money has been saved, let’s look at an example from January. The Australian Energy Market Operator asked for 35MW for the Frequency Control and Ancillary Services (FCAS) markets, which are events that require quick reactions when the grid needs to use extra power.
The prices charged by the Hornsdale Power Reserve were as low as AUD270 ($176) per MW. Before the HPR energy was available the fossil fuel generators used to charge AUD11,500($7,511)/MW to AUD14,000($9,143)/MW. This equated to a savings of AUD14 million in just five hours.
According to the Australian consulting firm Aurecon, the HPR has had a significant impact on FCAS market regulation. Since the installation of the Tesla Powerpack, the average price has fallen from AUD450($294)/MWH to AUD20($13)/MWH in just 2 years.
The financial savings inspired more battery projects in Australia, the expansion of the HPR and two more batteries have been commissioned in Victoria. There are already signed contracts for 200MW and 400MW batteries in the NSW, and 100MW and 150MW in Queensland.
Outside of Australia, Tesla and PG&E have plans to build a 1GWh Megapack that will provide 730MWh during off-peak hours. This will be constructed on the site of the old Moss Landing Power Plant just north of Monterey. Construction is expected to be completed by the end of 2020.
Garth Heron is excited about the future of battery storage and expects this is just the beginning:
You will see many more new batteries coming into the market doing a similar role. It’s just the tip of the iceberg that will enable these kinds of savings in other states. And it will make the grid so much more robust.
