One Year Later: How Tesla Has Mitigated South Australia's Blackouts

Late in 2016, South Australia suffered poor grid conditions due to extreme weather that resulted in blackouts throughout the region. Energy giant Tesla consequently promised that it could help solve the blackout issues the state was facing within 100 days from the contract installation of its 100 MW/129 MWh Li-ion battery system, dubbed the Hornsdale Power Reserve (HPR), or the entire $90 million system would be free of charge. The company promised that it would help reduce peak energy consumption during the summer months and provide reliable power for over 30,000 homes (approximately the number of households that lost power during 2017). 

Since its installation in November 2017, the HPR has since performed exceedingly well in power restoration, response time, and revenue vantage points. For example, in the first quarter of 2018, an interconnector between the grids of Queensland and New South Wales was tripped, islanding the Queensland region. HPR was able to quickly and seamlessly stabilize grid frequency to within the accepted range of 0.15 Hz to 50 Hz.

Of the 100 MW capacity, 70 MW is reserved for system security services contracted to the South Australia government (like the instance detailed above). The remaining 30 MW and 119 MWh capacity can be contracted to participate in ancillary service markets. Participating in six ancillary service markets, spot market prices went down as low as 90% from November 2016 levels. As the Australian energy market continues to develop and realize the benefit of battery storage, more revenue streams have potential to open and provide better benefits to customers. Tesla is currently constructing an additional 52 MWh system at the Lake Bonney wind farm in South Australia, continuing to build on the success of the HPR.

The Benefits of Battery Power

This project is one of several new projects using advanced battery technologies to tackle critical infrastructure needs. Guidehouse Insights believes that these systems are poised to play an important role, particularly for buildings with high resiliency needs like data centers and hospitals. While traditional diesel generators have been sufficient to date, advanced batteries are able to exceed the needs of backup power systems in the following ways:

• Quicker startup/more precise runtime
• Longer runtime
• Renewable energy integration
• Efficient, environmentally friendly operations
• Easily permittable within indoor housing establishments

Guidehouse Insights expects that this market is primed to quickly grow over the next 3-7 years. Given that it is in the early stages of development, systems integrators and project developers need to balance the anticipated system performance expectations, battery use case assumptions, and the cost/logistics of the system. Doing so will ensure that facility owners and grid operators understand and consider new advanced battery technologies for their critical infrastructure and uninterruptable power supply needs.