Tesla Powerpack In Australia Generated $17 Million In Revenue In 6 Months

SEP 25 2018 BY MARK KANE 16

Tesla’s ESS in Australia pays back fast

According to an IPO application released by French company Neoen, which operates the world’s largest battery energy storage system in South Australia (129 MWh/100 MW at Hornsdale wind farm), the ESS supplied by Tesla in 2017 is lucrative investment.

The whole cost of the ESS was €56 million ($66 million) or nearly $512/kWh (includes not only batteries, but also all the power electronics, connections and installation). Revenues in the first 6 months amounted $17 million (over 25% of the cost)!

Revenues breaks into two categories:

  • €8,1 million ($9.5 million) for the grid services and energy sales
  • €6,7 million ($7.9 million) for storing and selling electricity from the wind farm

“It’s unclear how Neoen is attributing the value of the stored electricity from its wind farm since it is accounting the two assets as a whole in terms of revenue, but it would mean the battery system generated between ~$10 million and $17 million during roughly its first 6 months of operation and it is on pace for over $20 million in revenue during its first year.”

It means that the most money comes from stabilizing the grid (not from the wind farm needs itself) – there were several reports on how much money it generates. Apparently, since the launch of the ESS, costs of grid services decreased by 90%.

That should enable it to achieve a payback period of just a few years.

Neoen operates 2 GW of wind and solar farms and hopes that IPO will enable to raise €450 million to increase capacity to 5 GW by the end of 2021.

Source: Electrek, Reuters

Categories: ESS, Tesla

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16 Comments on "Tesla Powerpack In Australia Generated $17 Million In Revenue In 6 Months"

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Amazing. It’s boggling to see such obvious solutions that greatly benefit humans as a whole- that are artificially suppressed by the few handful of people who control utilities and transportation.

A rising tide COULD lift all boats, except as humans we don’t typically allow it.

why do you say that?
CA is installing loads of batteries.
NY is doing the same.
CO has a large one going in, and Xcel has decided to add more because of that.
Vermont utility is help household get powerpack and then will have access to the electricity on-demand.
It looks like things are moving along quite nicely.

So what exactly are you gripping about?

I say that because I know the lengths that utility companies go to in order to protect their bottom line. Including artificially marginalizing solar via what they credit for solar production. I live in Nevada and it’s pretty blatant. We lost 5,000 jobs in my state 2 years ago because NV Energy had the PUC crush solar. If you need an understanding of the lengths Big Oil goes to, simply pay a little attention. Same goes for the Big 3 auto manufacturers.

And I wasn’t ‘gripping,’ I was sharing an observation.

Keeping in mind that the economic operating conditions of this installation are probably close to the best in the world, high cost per kWh for power, previously had huge loading balancing issues, this payback period isn’t necessarily representative of most jurisidictions, but its still a great case study to show that even at today cost per kWh a large scale battery storage installation be quite profitable.

Biggest constraint right now is module supply, but even at double the cost, they could probably add another storage bank of similar size in Southern Australia and still get a reasonable return on investment. Hopefully other large scale storage solution, like Vanadium flow, will continue to advance so that the ‘peaker plant’ of the future is just a bunch of batteries.

Yes, the South Australia electricity market was pretty messed up.

I’m not sure more batteries would produce that much more revenue. They were very rarely limited by capacity in the early numbers I saw.

“conditions of this installation are probably close to the best in the world”
Yes, if these terms were the same all over the world you would see a half mil reservation list for storage too. The thing is you don’t need to have only 2 years of payoff, all that is needed is to have a payoff…that’s it!

Going by various reports, I’d estimate the backlog in Powerwall installations to be in the tens of thousands as well…

Only that many because it’s still relatively expensive if on the grid. 10 years from now if it gets its price cut in half then it will be panic tme for utilities.

I think every Island is ideal for solar and battery and cost savings would be great too.
I can’t see how diesel and or coal can compete with solar and batteries. Hawaii, Puerto Rico etc. I think the only thing slowing adoption is the supply of batteries.

Almost all utility scale renewable deployments now include batteries. The batteries are a great help in dealing with things like wind lulls, clouds passing over, etc. These small little variability things are thus handled by the batteries…and the larger variability is handled by weather prediction and the rest of the grid.

And the batteries also provide other grid services like frequency regulation, help for black-starts, evening duck-curve coverage, etc.

It is getting to the point where even gas plants & gas peakers, pretty much only new fossil fuel plants built these days, are having to compete with battery + renewable plants.

A little storage can also save a large wind/solar installation money on grid connection and transmission infrastructure. Instead of sizing for peak output, you size for 90% (or whatever) of peak and let the batteries soak up the rest.

I don’t see a case for new gas peakers in areas with good wind/solar. New fast-response NG combined cycle plants can handle daily variability, batteries can manage short blips. You can still fire up the old gas peakers in extreme cases.

No thank you.
It is time to kill the Fossil fuels.
instead, far better to have base-load come from Hydro, Geo-thermal, and Nuclear, then add in wind and esp. Solar (local site), and finally batteries to handle the daily variability.
In fact, Vermont has it right. They are paying a bit of money to building owners to put in batteries, but than allow the utility to access for smoothing demand. That way, they can handle just about anything. Interestingly, they have some of the cheapest energy in America because they make heavy use of Hydro AND Nuclear, and are adding in the batteries, solar, and wind.

Except that inflexible “baseload” plants are increasingly becoming a liability rather than an asset as renewable penetration increases.

Soon enough, batteries along with demand response will hopefully cover daily variability as well…

It’s a bit of a conundrum, since right now, gas plants are still more practical for some uses — but building new ones now doesn’t really make sense, since they will be obsolete long before reaching their designed life time…

Battery packs only value is to reduce or pay for demand charges.

That alone can pay for the cost on grids that are expensive for peak demands.

Actually, depending on the size and placement, they can also be used to provide power during outages.
Vermont is choosing to help building owners buy batteries and put them on-site, BUT, the utility can then use them for regular demand shifting. During black-outs, these will provide power to the buildings instead.

This is a win-win for all.