Tesla made an enormous battery and it’s raking in the cash
In case you hadn’t heard yet, Tesla recently built a huge battery in Australia, and it is generating some serious money. In the last quarter alone, the tech company’s creation made several million dollars for Neoen, the power company that bought the battery system from Tesla. With millions of dollars under its belt, Tesla’s system is well on its way to paying itself off.
It is not uncommon for Australia to have large-scale power problems. For years, the country has been trying to determine what its energy future will look like. Some advocate for green, clean energy. Others are more focused on the cost and advocate for power generated by fossil fuels to create more affordable electricity. Whichever side one takes on the issue, though, the country undeniably has power issues that need resolving.
Prices have risen dramatically. According to Tony Wood and Davide Blowers from the Grattan Institute, “Wholesale electricity prices rose across the National Electricity Market (NEM) by 130 percent between 2015 and 2017. The price paid for electricity traded in the NEM also more than doubled, from about $8 billion to $18 billion, and household bills increased by up to 20 percent in 2017 alone.”
In 2016, there was a state-wide power outage. After that, the government decided to begin a project that would bring them one step closer to a solution: a battery system that could store power to be used in the event of shortages and maintenance. Basically, they wanted a way to save up extra electricity for a rainy day. Out of almost 100 different bids on the project, Tesla was selected.
Tesla to the rescue
The battery system Tesla proceeded to build was enormous; in fact, it was the biggest ever (100 MW/ 129 MWh). The company promised to complete it within 100 days, and they delivered on that promise. A week before the deadline, local news began reporting that the construction had been completed.
The system lies adjacent to a wind-generated power plant, owned and operated by Neoen. The wind farm charges the battery system, and in times that the country has a power shortage, the system can deliver a much-needed boost in electricity. In only milliseconds, it can switch from charging to discharging.
Within weeks of beginning operations, the battery proved its worth. A coal plant hundreds of miles away tripped, and within a fraction of a second, the Tesla system began to rejuvenate the grid. Surprisingly, this has actually been a cause for some concern, according to Tesla. They claim that the system is so efficient that they are not getting paid enough.
That’s a lot of dough
In times of power shortages or maintenance, Australia’s Energy Market Operator can call for the use of gas-power generators, which supply the grid with some extra juice. Tesla’s battery system lessens the need for these generators, which are more expensive to use than the battery and slower to get started supplying power.
Apparently, Tesla’s system is so much faster to begin supplying power than the other gas generators that the government has not accounted for the difference when they are paying for the electricity. According to a statement by Tesla, they have not received payment for at least 30% of the services they’ve provided.
But make no mistake: Tesla’s battery is making a ton of money. It made upwards of 17 million dollars in its first year, including over 4 million in the last quarter. Additionally, it has saved about forty million dollars so far, and it has reduced the grid service price to under 10% of what it previously cost. The total cost of the project was originally 66 million dollars, and at this rate, it looks like it will be paid off in almost no time at all.
The project has been so successful that Tesla is now taking on other other power-related projects in Australia. Be sure to stay tuned to see what happens next.