Tesla’s Massive Battery In Australia Gets Paid $1,000 Per MWh

MAR 26 2018 BY MARK KANE 13

According to the latest reports from Australia, the Neoen Hornsdale Battery supplied by Tesla takes advantage on both ends when demand exceeds production and when there is surplus of electricity.

Usually, electricity prices varies between AU$30-150 per MWh if you want to buy, but there could be a period when generation exceeds demand. That’s not good, because frequency increases and the grid could be affected.

In such circumstances, electricity is negatively priced at up to AU$1000/MWh (around US$800) before generators adjust output or get turned off. Power plants that put into the grid too much electricity are accordingly penalized.

Here is where the Tesla battery quickly enters game and charges for energy that it later will sell for profit.

Because the Tesla battery is so big (100 MW / 129 MWh), in short period of time it is able to earn more than $50,000.

Neoen Hornsdale Battery from Floodlight Media on Vimeo.

Source: Electrek

Categories: ESS, Tesla

Tags: ,

Leave a Reply

13 Comments on "Tesla’s Massive Battery In Australia Gets Paid $1,000 Per MWh"

newest oldest most voted

Question: do the wind farm owners pay $1000/MWh during these times? If so, why not just curtail the turbines and avoid the cost of installing these batteries?

Or do ratepayers pay Hornsdale to overproduce and then pay 10x more to store the excess production in these batteries? That would be especially idiotic, but policies like that would explain why SA customers pay some of the highest prices on earth.

Does anyone see this as a model for sane grid operators? Do customers really want to pay SA’s high prices? Isn’t anyone smart enough to come up with a better scheme?

I cant comment SA and Australia in general, but this things are very much normal in industry. It’s like rush hour when you go to work or you go back home. Every day inside this 2-3 hours time frames, you have huge traffic, compare to other 20+ hours. Roads and everything is not used other 20 hours at all (compare to rush hours) but they are still there. Similar with power production, you will get this strange “rush” hours moments, where you have to much or to little power. The problem with both is – you cant just call people to TURN ON devices or TURN OFF devices – but you need to have this very special balance that is really 24/7. In real world is like this, if you dont produce enough power, even for few minutes (or even seconds) you can get blackout, and that blackout alone can cost many many many $ millions, compare to pay someone $1000-5000 (or whatever) to keep grid safe (it can even be just few seconds, let alone hours). The problem with Australia as far as I can see, is you have heavy politics on side of coal / and other NOT-renewable… Read more »

I imagine wind turbines can be shut quickly enough to avoid the problem. Also the windfarm which owns the battery wouldn’t charge itself.

Yes, and they come with software that does the job.
When there is produced more then needed, they get paid to stop the wind generators, or have to pay to continue to produce.

That is one reason why hydrogen generation is an option, as well as other storage technologies like batteries are considered.
Can use the wind, insted of shutting it down.
Smart grid is also an option. EVs are told that power is super cheap, so they charge more at this period, and less when it cost more.

sure looks like the battery is paid $$$ to soak up power from its co-located turbines.

good business for those who can get it.

I think that the excess output from the wind turbines can be used to charge the battery (and the turbines can be curtailed), and the battery can charge from the grid while the price is negative.

Though the energy buffer service the Tesla battery station provides is technically a very necessary service with a grid co-dependent on highly-intermittent renewable power and slow-response baseload power plants, this is is also a very problematic situation.

Situations like this with extreme price-fluctuations due to spiky mis-matches between supply and demand are extremely vulnerable to “gaming”. California’s public utilities suffered massive losses and California residents suffered frequent blackouts in 2000-2001 due largely to demand-based power delivery gaming by Enron and some other less-than-honest 3rd-party energy delivery companies during some hot summer peak electric load situations.

Besides the huge negative $ impact on consumers, it bankrupted PG&E and almost brought down several other public utilities. The state government had to start covering the gold-digging high-demand energy prices to “bail out” utilities and prevent a total grid collapse. Enron officials were found guilty of various crimes, California’s governor Grey Davis was recalled and Arnold Schwarzenegger was elected governor largely because of this fiasco. AU would do well to watch all players very closely and minimize these game-tempting lucrative price spikes/collapses .


–Situations like this with extreme price-fluctuations due to spiky mis-matches between supply and demand are extremely vulnerable to “gaming”

Agreed. I lived in CA during the crisis and casually knew a couple of PG&E execs.

Crazy prices like this are a sign of unhealthy, dysfunctional grid management. Whether that’s caused by the high renewable penetration (as the browns and deniers claim) or politics/corruption (more likely), it’s A REALLY BAD THING!!!

Those of us who support renewables should NOT be happy to see stories like this. “Battery Lets Wind Farm Game the System Just Like Enron” is not helpful. I want to see “Customer Rates Decline, Grid Stability Improves”. That’s what will help propel renewables to dominant market share.

Since insouciant Californians willing accept confiscatory electricity rates, $1.00 / kwh pricing from time to time is no big surprise to me.

In an ideal world, rates would fall as renewables take over but in a privately owned energy monopoly that will never happen. Cost savings will never be passed on to consumer when you have hungry share holders waiting.

As a non insouciant Californian, I find our problems lie with the corrupt non elected bureaucracy who’s personal power and wealth is derived by making it next to Impossible to expand our existing enery grid.
With more hydro-electric projects And the well-meaning though ill-informed populace that believe it’s the price to pay in order to have clean energy.

In short between the well-meaning environmentalists of the politicians and the bureaucracies that are entrenched in this state it has become almost impossible to expand our energy production.


It also seems that if you think your PG&E Smart Meter is overcharging you (as one College Student Subscriber did who had such a “HUGE” electrical load – 3 – 13 watt CFL’s running table lamps and also a 30 watt (while plugged in and battery charging Netbook computer, besides a 2.5 cubic foot ‘dorm style ‘ (non-frost-free, and 1.6 amperes while running (under 200 watts) – and got a $200 bill), the only way out of it is to be like the Public Utilities Commissioner who complained his electricity price was between 2X and 3X what it used to be under the plain old analog meters. I’m sure that guy didn’t get any special consideration.

Or when it came out that the Multi Billion Dollar Smart Meter program’s OPT OUT charge (the $60 per month fee or what ever it is currently to have your own old analog meter that you used to have for FREE), was not due to any actual ‘extra meter reading cost’, but was admitted in ‘thought to be’ secret PG&E communiques that this amount would DISCOURAGE ‘poor people’ from paying the fee to opt-out.