Musk Bets He Can Fix Aussie Power Woes in 100 Days or It’s Free
bloomberg.com
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The cost of batteries and surrounding hardware here means that on this particular deal Musk is losing money. 100 days isn't a lot of time, and he needs to get about 1% of yearly global li-ion battery production to Australia, build surrounding hardware, AND install it in 3 months.
It's definitely doable, and he's not giving out-of-this-world prices, but he is losing money here.
It is completely worth it though: a lot of backup battery plants are hilariously overpriced and seeing "oh, this Australian company got 100mWh for $25MM, we paid $100MM for the same" will probably get some people thinking about switching to Tesla.
Also worth noting that Tesla's battery costs will drop in the future, so if a utility company asks them in a year from now for the same $250/kWh rates they can probably get them.
(Yes, I am 'that battery guy' that makes battery systems and comments on battery stuff a lot here.)
Note that the quoted price of $250/kWh was given at the pack level (just the Powerpacks).[1] So the total project cost should be expected to exceed $25 million after including shipping, tariffs, site preparation, installation, bidirectional inverters, and interconnection.
>build surrounding hardware, AND install it in 3 months
The nice thing about the Powerpack is that they need very little surrounding hardware. The units are rated for outdoor installation, and they just forklift into place to a concrete pad. A group of Powerpacks (4-8) shares a common bidi inverter, which is wired to the grid interconnect on site. Done.
The obvious thing to do would be to construct a building to house the packs and protect them from the elements, but I'm not sure that makes economic sense. These are exothermic devices when operating, so a big challenge will be cooling and ventilating the building. And if you're making a building just to spend capital and energy to ventilate it, was it really worth it to enclose weatherized equipment?
It might make sense in hot climates to put a solar "carport" over the batteries to shade them and reduce cooling load. Tesla has one that's supposed to be cheap to install.[2]
I expect the economically "right" answer (open air install, solar canopy, or prefab building) depends on local climate, expected battery duty cycle, and financing. Not to mention factors like your boss saying "100 days or it's free." ;)
>he needs to get about 1% of yearly global li-ion battery production to Australia
In 2013 Tesla gave global production as 34 GWh of cells.[3] 100 MWh works out to 0.29%, and I don't expect cell production has gone DOWN since 2013. So if you're looking for an order-of-magnitude, 0.1% would be less wrong (in both the multiplicative and the additive sense).
The completed Gigafactory is expected to produce 150 GWh/year, so this is only 0.06% of that. Unfortunately I haven't seen reliable numbers about the production volume at present (with about 14% of the planned 13.6 million ft^2 footprint completed, and probably half of that outfitted for production). I naively estimate the Gigafactory is currently producing at about 2% planned final capacity, so 100 MWh represents around 12 days of production.
[1] https://twitter.com/elonmusk/status/840096176678420481
[2] http://www.solarcity.com/newsroom/press/solarcity%E2%80%99s-...
[3] https://c1cleantechnicacom-wpengine.netdna-ssl.com/files/201...
By the way, your own sources contradict each other - even if you _do_ believe that image from Tesla, the Gigafactory's completed capacity is 35 GWh/yr. This blog post states the same [0]. The segment which is done is cool, but it is surrounded by construction equipment and I doubt it is producing very many cells.
Finally, since I doubt you're in the battery industry, there are two very important numbers: production capacity and production. For example, 2014 worldwide production capacity was almost 30 GWh, but worldwide production was only 5.4 GWh [1]. This is due to a lot of factors, but ultimately only a fraction of manufacturing capacity is used at any given time. A lot of graphs that you see on blogs will conflate the two.
[0] https://www.tesla.com/blog/battery-cell-production-begins-gi...
[1] http://evobsession.com/wp-content/uploads/2016/04/image-23-e...
It's not easy to find, but I did some digging. Looks like an analysis of the global battery industry, with the 2013 version presented at the 2013 Battery Japan conference.[1] From other citations I found[2][3] it's clear the speaker is Hideo Takeshita, who in 2001 was the vice president of IIT (the Institute of Information Technology Ltd.)[4] and in 2014 was the president of a battery market research firm called B3 Corporation.[5]
Sure the document isn't freely available online, but given the commercial nature of the content that hardly seems suspicious.
>your own sources contradict each other
Sorry, I should have been more clear. It gets very confusing since it's a moving target, and you can rarely tell who is using what source (and when that source is from).
The original capacity announced in their blog post[6] on 2014-02-26 was 35 GWh/yr at the cell level and 50 GWh/yr at the pack level (importing 15 GWh/yr of cells).[7] That's what you're seeing on the chart.
Later at the 2016 shareholder meeting on 2016-05-31, Tesla CEO Elon Musk announced that they were going to triple the final production capacity at the Nevada Gigafactory.[8]
[1] https://web.archive.org/web/20130207162628/http://www.batter...
[2] http://www.sdle.co.il/AllSites/810/Assets/c%20pillot-avicenn... (page 42)
[3] http://www.avem.fr/docs/pdf/AvicenneDiapoXining.pdf#21 (page 21)
[4] http://electronicdesign.com/energy/li-ion-batteries-reach-hi...
[5] http://wardsauto.com/miscellaneous/battery-experts-seek-lowe...
[6] https://www.tesla.com/blog/gigafactory5
[7] https://www.tesla.com/sites/default/files/blog_attachments/g...
[8] http://electrek.co/2016/05/31/tesla-triple-battery-output-gi...
The latest I've seen ( https://www.aemo.com.au/-/media/Files/Gas/National_Planning_... ) suggests that there is a risk of not being able to produce enough at all, let alone keep the grid stable.
My read of that report is that current "Aussie Power Woes" are the ageing generator infrastructure, not grid stabilisation which was a politically interesting but otherwise relatively minor hiccup a few months ago in South Australia.
In addition to those two there are cost troubles brewing related to the cost of maintaining infrastructure for power (poles & cables), and energy prices are moving upwards. May or may not be related to generators capacity, I don't know.
"Alternative generation fuel sources such as biofuels, or technologies such as energy storage, may be viable alternatives to GPG, if cost-effective. These alternatives would help alleviate gas supply shortfalls by reducing gas demand, while still supporting renewable generation integration."
Though since one of the other solutions to a gas shortage is to stop shipping so much of it out of the country, it seems the "problem" may well be blown out of proportion.
Shipping via ocean freight (I will avoid the obvious pun) is exceptionally cheap; for example consider the following article from 2016:
> https://www.flexport.com/blog/why-are-ocean-freight-rates-so...
There was power rationing in NSW a couple of weeks ago, and Victoria's largest power station is about to be closed down.
There is plenty of power (especially in SA), but it is at the wrong times. Batteries (or any kind of storage device) are the perfect solution.
On the other hand, the Koch brothers attack Musk as a fraud.
https://www.theguardian.com/technology/2016/dec/04/elon-musk...
Perhaps you're with them?
I'm guessing that this escapade — if it works — is going to be more productive than $25M in marketing/advertising spend.
It appears that there is sufficient capacity in SA but providers are holding out for higher prices or not wanting to meet demand because they are providing higher priced capacity from their operations in other states.
Given that, no sane supplier would refuse to sell given they would be making unlimited profit. Hey, I'd be connecting up my windup flashlight if I got paid $999,999,999 per kilowatt hour.
The issue must be a bad market. Either people aren't paying for what they use, there isn't sufficient transmission capacity to have a sufficiently large market to avoid local monopolies, there are price caps or floors, the market isn't fast enough (no automated trading), or new entrants are limited from participating.
In a correctly working market, electricity never fails because all people using electricity at the time of the failure would be paying an infinitely high price, and therefore be bankrupt.
Even if a good is quite scarce (Such as electricity in a blackout), the price is dependent on demand. Low supply does not inherently make a good expensive.
I'm not sure why it took that long, but I guess it's that you can't just flick a switch and everything is powered on again. You have to phase it to avoid peaks and some areas/power stations might be hard to reach or a bunch of coordination/equipment checks are needed before they can be started up; and the more remote, the lower the priority.
So, more local buffering = less problems when the main feed drops out. If local areas can be self-reliant for some time, and help to smooth out peak demands on startup, it's much less of a problem when there is a failure high up the line. It doesn't solve the total production problem, obviously.
From the looks of things, even a 100MW system being instantly available wouldn't have helped prevent the outage (given the 445MW shortfall from windfarms disconnecting due to voltage drops), but it may have helped reduce the time taken to restart the network.
[1] https://www.aemo.com.au/Media-Centre/Update-to-report-into-S...
So if the politicians point is that renewables destroy jobs, the evidence does not support this claim.
[0] https://web.stanford.edu/group/emf-research/docs/occasional_...
Anyone who suggests that's a feature, and not a defect, is either a fool or has designs on your wallet.
My point isn't that more people employed = cheaper energy. Obviously that's not how economics works.
My point was, if politicians are advocating for building out more fossil fuels because renewables "take away jobs" that argument has been proven false. [0]
[0] http://fortune.com/2017/02/21/donald-trump-jobs-coal-mining-...
The SA government has been in power for too long, and a change would be good, but the opposition party is just woeful. Last campaign they ran on the idea of the state funding the Adelaide Oval upgrade, but instead of building a new hospital (which we need) they proposed the idea of upgrading the current - asbestos ridden - one, while it was still operating. There was just no way that was a viable option - it was an entirely stupid plan, and they lost just like they deserved to.
I was hoping for better this time, but currently they are planning on getting rid of the SA renewable energy targets, and using "clean coal". I just can't vote for that. (And ironically they also decided to oppose any nuclear industry or power in SA too.)
Sorry for off-topic, but is there anybody reading this who could help me claim a twitter username that is inactive for almost 10 years now? Any hints are welcome. AFAIK twitter doesn't do that officially anymore. It would be really awesome.
There are only a few consequential military powers today that can seriously attempt to fight a major war outside their own borders while simultaneously enduring opposition: US, Russia, China, Germany, France, UK. All the next tier powers down from that can be trivially crippled, locked down to their own territory and prevented from substantially joining the battle. IE there can be no WW3 until or unless the world changes a lot.
And I misspoke in saying "WWIII". What I meant was a nuclear exchange between the US, Russia and their allies. That's almost happened more times than most people realize. The Cuban Missile Crisis did pretty much happen in public. What would that have looked like on Twitter?
If private citizens using technology to solve a nation's crippling issues is awesome.
So typical of Australian politics. Any event, positive or negative, is used to attempt to score cheap political points. We have no leaders with long term vision. There is no discussion about building Australia's future, only mud slinging at the opposite party. The few large scale nation building projects that commence are gutted once the opposing party is elected, and in the end, the people who lose out the most are the Australian public.
"Coal is the future" - Tony Abbott
There are enough conservative elements here already making misinformed claims about renewable energy that any failures or compromises, even for good technical reason, will be seized upon.
That about 15% of tesla's car production over that time period.
I bet they have sufficient supply chain slack to accommodate that if they need to.
I am honestly surprised that someone as smart as Elon wouldn't recognise both the crassness of a comment like that, and that he likely doesn't fully understand the political landscape that caused the situation.
Good luck getting through the red tape and border crossing negotiations. To say nothing of the near 50 degree weather beating down on old infrastructre that spans thousands of very sparse kilometers.
Edit: to clarify, it is arogant because he is stirring an already controversial pot in a country that is frankly none of his business. I am from the state that is enduring the power troubles, and the technology in use is not the core of the issue, it is the artificial market policies dictating the generation of power. Having batteries wouldn't solve that, as having people to pay for the energy generation is the mechanism that is actually broken.
Truly amazing how far we have come from the era described in that article. Now, we're on the aphelion .. indeed, Musk has landed his rockets safely, successfully now.
/back-on-topic:
I think Musk might have something with the e-shingle concept, in the Australian market. All he'd have to do is open-source the thing, and provide some capital incentives to build a few fabricators in the Australian deserts, closer to the source of the materials needed..
There are no "border crossing negotiations": it's just the SA government. That could be a problem, but they are motivated to find a solution.
50 degrees isn't a huge problem. Tesla has a similar system in California in similar climate.
artificial market policies dictating the generation of power - unclear what you mean by that. Gas plants aren't economic because we've sold all our gas in long term contracts overseas. New "clean" (ha!) coal stations are expensive investments and not particularly cheap to run either. Wind and solar works well and is cheap when it is running, but it intermittent.
In regards to my comment about artificial market policies, I was referring to the way AEMO comissions electricity to be put into the grid and how private companies can refuse the request at first (but not if AEMO pay excess to force the extra generation).
That was how we had our most recent outage, AEMO requested extra energy but the private companies did not fullfil the request as it was not cost effective.
> AEMO requested extra energy but the private companies did not fullfil the request as it was not cost effective.
I think that is a pretty good example of non-artificial market policies.