South Australia Battery Announcement 7. Juli 2017 Musk kündigt an, dass Tesla die weltgrößte Lithium-Ionen-Batterie für South Australia bauen wird, und sagt die Lieferung in 100 Tagen oder kostenlos zu.
Musk kündigt an, dass Tesla die weltgrößte Lithium-Ionen-Batterie für South Australia bauen wird, und sagt die Lieferung in 100 Tagen oder kostenlos zu.
Transkript Jay Weatherill (SA Premier)
South Australia is already leading the nation. Today we lead the world. We're announcing the world's largest lithium ion battery. That battery will be built in Jamestown, just a few hours from the centre of Adelaide. It will be a partnership between Tesla and also neom. Tesla, of course, one of the most exciting technology companies in the world, and neon, one of the most reputable renewable energy companies in the world. Coming from France, this project will provide for 100 megawatts of battery storage. It will be associated with the Horn Dale wind farm which is located in that same area in Jamestown. What it will do is completely transform the way in which renewable energy is stored, restored and also stabilised the South Australian network, as well as putting downward pressure on prices. This has been an extraordinary collaboration on an international basis and I want to thank all of those who have participated in bringing us to this day. It's been an incredible journey. On the 9th of February we had an unnecessary load shedding event coming on top of the blackout that occurred back in September. South Australians were shocked and I think had completely lost confidence in the national electricity market. What they were demanding of their elected representatives is they stand up and take control. So the next day we did just that. We stood up and said that we would produce an energy plan that takes charge of South Australia's energy future. That energy plan was developed over the six week period up until the 14th of March and one of the central elements of the plan that we developed was the nation's largest battery. Today what we're revealing is the world's largest lithium ion battery, a grid scale battery that will provide stabilization services to the grid, have the capacity to make a very serious dent in the $48 million worth of ESCAs services which are purchased from the Australian energy market, putting downward pressure on prices here, also opening up new possibilities for renewable energy in this state, in this nation and around the world to be dispatchable renewable energy providing firm, essentially baseload capacity for people and industrial users to power their businesses. So it starts here in South Australia. We had about 91 bidders, international bidders to this process. Of course that was assisted by a little bit of Twitter exchange in the few days before we released our plan between Elon Musk and also Mike Cannon brooks and those 91 bidders were carefully assessed and I want to thank all of them for the way in which they participated in the process. We did come to a view that there was a superior bid and it is this partnership between Neon and Tesla. And we're three thrilled to be able to announce Today, that that is the winning consortium that is going to put this project together. I want to also thank the teams that worked on this. In particular, I want to thank the team in South Australia led by Tom Kutsun Thomas, our Minister for Energy, the team he assembled in his agency, led by Sam Crafton, and really an extraordinary group of South Australians who worked incredibly hard to make sure that this incredibly important timeline, that is the 1st of December, the beginning of summer, was going to have the delivery of this battery. One of the offers that was made very early on in the process by Tesla was that from the signing of the Grid Connection agreement, they would deliver this battery within 100 days or it is free. It's an extraordinary offer and it's one which is now being committed to and is part of the contractual arrangements. And that's a fantastic degree of security that South Australians have that we will have this in place by the beginning of summer. I want to also thank the people who have negotiated with us, both NEO and Tesla. It has been an incredibly tight timeline to complete what are incredibly complex negotiations. And so, ladies and gentlemen, it's my great pleasure now to introduce you to the international head of energy for Tesla, Carl Langton, and also the Chief Executive Officer of Tesla, Elon Musk. Thank you. So we're here to answer your questions and on the topic of the battery, and if anyone has a question far away.
Neoen Executive
No question.
Elon Musk
I can't believe it. Mr. Musk, Mike's message, channel seven. Do you see any risk, risk in this at all? Your reputation, global reputation is at risk here. South Australia's energy situation in the past has been seen as sometimes a joke and sometimes disastrous. How do you place it with your reputation? Well, we thought about this and there is certainly some risk because this is going to be the largest battery installation in the world by a significant margin. This is 100 megawatt battery installation. The next biggest battery system in the world is 30 megawatts. So we're talking about something that is more than three times as powerful as the next biggest battery installation in the world. And we actually insisted in doing the contract that we be held to the 100 days or it's free. That's what we said publicly. That's what we're going to do. I'd also like to thank Mike Cannon Brooks for, for talking smack with me on Twitter and kind of getting that. I think he deserves some credit there as well. How much will it cost you if you don't live up to that commitment? If you go 100, 102 days. What's it going to cost you? A very large sum of money. I don't know, probably $50 million or more. I don't know. Aligned.
Reporter
One of your other projects in California was worth about 5 billion are red.
Elon Musk
I don't think. Not 5 billion.
Reporter
No, that was the 80 megawatt hour plant.
Elon Musk
No, no, I think there's a few digits missing there. So how much is this going to cost in total? I'm not sure if we. I'm not sure if that. It's something that we can discuss, but it was. Is that public knowledge or not?
Tesla Executive
It is not.
Elon Musk
No, it's not. Okay, so we can't say the exact, the exact number, but also leave that up to South Australia if they want to disclose it. But it's. There are two, three parties, Neo and Tesla and South Australia. We would not speak for them unless they agree as well. This is significantly bigger than the project in California which was the, when we got, when we brought that online in December of last year, that was the biggest battery in the world. But that system is approximately 20 megawatts in power and this is 100 megawatts. So it's a massively different thing. In fact, I really think that like the most salient point here is that the system will be three times more powerful than any system on Earth. This is a, this is not like a sort of a short, like a minor foray into the frontier. It's just like, you know, going three times further than anyone's gone before,
Tesla Executive
if I may add something. Yeah, so beyond focusing on the costs, the interesting thing about this plant is actually going to lower costs for consumers in South America.
Elon Musk
That's a very important point.
Tesla Executive
So as opposed to being something that costs taxpayer money or the largess of the public is actually going to provide price stability, market stability and lower prices overall for customers, especially at the summer peak months.
Jay Weatherill (SA Premier)
What's the technical challenges?
Elon Musk
I mean it's just the normal technical challenges that come with scale. So when you make something three times bigger, does it still work as well? We think it will, but there's certainly some risk in that. And we're confident in, in our modeling techniques and in the design of the system. But whenever you make something three times bigger than anything that's come before, there's always some risk. Mr. Musk, can I just ask. Up the back here. Okay. Sorry, it's hotel. Sorry. Just over here. What will the battery be used for? Will it be used for arbitrage or simply stability services? And when you say 100 days or it's free. Who is it free for? Neoen or the South Australian taxpayers or both? Well, I think if it's for the. Primarily the free would be for South Australian taxpayers. Yeah. And it has. The grid stabilization is a huge factor, as Cal was saying, because it's able to stabilize the grid and buffer power. You can essentially charge up the battery packs when you have excess power and where the cost of power production is very low and then discharge it when the cost of power production is high. And this effectively lowers the average cost per kilowatt hour to the, to the end customer. It's a fundamental efficiency improvement for the grid and it's really quite necessary and quite, quite obvious when sort of considering a renewable energy future. When you have wind or solar, it's obviously not windy all the time and it's clearly not sunny 24 hours a day. So you have to buffer the power and store the power during the middle of the day in order to discharge it at dawn, dusk and night. It's really not complicated in that sense. It's really, really quite straightforward. And then for wind energy to store it when it's windy and discharge it when it's less windy. This is extremely important, fundamental in a way you can think of Earth like Earth is like a giant satellite. And the way that satellites are powered, including the big geostationary satellites which are quite familiar. We just launched one actually at SpaceX. Those will last for 20 years with no maintenance in orbit. Literally no one can go to them. So they're designed to zero maintenance and they're entirely powered by solar and battery, but there's no fundamental scaling limit. So just as you can power a big satellite purely with solar and a battery, you can power Earth purely with solar and a battery. Earth is a giant satellite. This was all triggered by Twitter. When did this become more than a thought bubble or a game for you? When did you become really involved in the process? Well, it's certainly never a game, but I was made aware of it by the Tesla team that, that there was really this opportunity to make a significant statement about renewable energy to the world, to show that you can really do a heavy duty, large scale, utility level battery system and that South Australia was up for the challenge. Then that team asked me like, are we willing to take a big risk on this? And I said absolutely. If South Australia is willing to take big risk, then so are we.
Neoen Executive
Some people in Australia want to build new coal fired power stations.
Elon Musk
How does that compare economically with building new renewable energy power stations instead? Yeah, the fundamental challenge with coal power stations is that they're quite difficult to get financed because the writing's on the wall for the long term future of coal, which is that coal does not have a long term future. And so when, when one looks at the establishment of a new coal power plant or doing a major upgrade of an existing coal power plant, when going to investors to get financing for that, investors know that coal does not have long term future. So the cost, the capital cost is incredibly high because they want to charge a very high interest rate because they're not expecting it to last 30 years, which is normally the length of time that they would want to amortize the value of a power plant. So effectively, coal becomes very expensive because people aren't willing to invest in something that doesn't have a great future.
Reporter
Mr. Musk, Stacey Lee from Sky News up the back here.
Reporter
this will be built in Jamestown. What does that mean for the community there? How many jobs do you expect this to create up there?
Elon Musk
Well, I think it's a massive installation, so there will obviously be a huge initial input of jobs and I think long term, because it will be three times more powerful than the next biggest battery installation in the world. And we're going to make an effort to have it also look good that it actually will be a tourist destination for at least some period of time because you just want to see this giant battery farm. But I mean, I think they're really quite nicely arranged, kind of white obelisks. I mean if it sort of, you know, if this got unearthed in the future, it would look like what was this, some sort of art exhibit or something? I don't know. What were they after? Right. So I think it'll have some value as sort of a tourist spot for a while. And Raquel, if you'd like to elaborate on that. Yeah, absolutely, absolutely.
Tesla Executive
Especially for the construction phase. And I'll be honest, the operations and maintenance of the battery system are designed to be pretty self sustaining. So it's not a significant amount of people who have to be there to upkeep the system for all the construction phase, which will last into December. Notionally we'll have to be tens or hundreds of jobs are being created Jamestown.
Jay Weatherill (SA Premier)
There's a local contractor, cpp, that's won the contract to be part of doing it here. So it's a South Australian company, cpp and they'll be doing that on ground work.
Elon Musk
What's the useful life of the batteries
Tesla Executive
and will you cycle them through contingency?
Elon Musk
Yeah, so the useful life of the battery, depending on how long, what energy level is considered to be, the end of life of the battery is sort of on the order of 15 years. But it does depend on how heavily the battery is used, what percentage of the how deeply it's discharged, how aggressive power is added to the pack or removed from the pack. But the electronics can last 20 to 30 years, and the cooling system thermal control loop can also last on that order. So over time, what you can do is you can add more power packs to supplement the decline in the energy capability of the older ones, and they will seamlessly blend into the system. So it's not as though everything is junked. And are they recyclable? They are certainly recyclable and in fact it makes sense to recycle lithium ion battery packs because the material constituents are still quite valuable. The primary cost driver, in fact, in the cells tends to be nickel. So you can think of it as very nickel rich ore is one way to think about it. But typically the cells have about 10% of their value even when they have no energy capability left.
Tesla Executive
Considering South Australia already has a high number of wind farms spread around the state, do you hope this will be a first step into maybe partnering with other organizations as time goes on?
Elon Musk
If it's a success? Yeah, I think this deal is actually going to be incredibly helpful within Australia and around the world as a proof point for being able to do large scale utility battery applications. And certainly, I mean, there's obviously going to be a lot of people looking at it and saying, did they get it done in 100 days? Did it work? Are there any issues? Obviously those are the right questions to ask and so we're going to make sure that it does.
Tesla Executive
Maybe if I can add something to that. We talked about it earlier, the shift away from coal. I mean, really, we talk about, you know, why would you even build a new coal plant or even a new gas plant? I mean, I specifically think that the cost, the consistently lowering cost of batteries coupled with renewables is going to fundamentally reshape the energy landscape much faster than anyone thinks it will. We're already seeing that on island grids. We have a project similar in scope to this, much smaller in size on the island of Kauai, where they have too much sun. So now they're only building solar plants paired with batteries, which are essentially baseload generators. They charge it during the daytime and they charge in the daytime from sun, and they discharge at night to provide baseload power. And so, I mean, I think in the very near future, all new renewable energy plants will have batteries coupled with them just as par for the course. And it's going to totally reshape the fundament of the energy system.
Elon Musk
Yeah, it has to. Of course, like I said, there's a sort of common sense that if you have solar, you must have battery because otherwise your power is just going to be proportionate to how sunny it is. It's really obvious.
Reporter
Mr. Musk, have you actually visited the Jamestown site or will you on this
Elon Musk
trip to SA I actually just came right from the airport to here, but I will visit it before I leave. Yes.
Reporter
And how long are you in town for?
Elon Musk
I'm not sure. I think at least until tomorrow. I'm not sure what day. It's Friday. Right.
Jay Weatherill (SA Premier)
Are there any other questions? Yes.
Elon Musk
Did you see this as a financial opportunity for yourself or did you just see it that you felt sorry for South Australia? I certainly don't feel sorry for South Australia. This is a great place. In fact, I'm pretty darn impressed with South Australia willing to do a project of this magnitude that's beyond anything else in the world. Like I said, South Australia is doing something that's three times more powerful than anything else on earth. So it takes a lot of gumption. I do see this as something that the world will look at as an example and being able to do large scale battery applications for the grid that really take a large amount of load, it's really going to be an example to the rest of the world. But we need to deliver, we need to get it done. We need to make sure it's working properly and we want to do it in less than well under 100 days.
Reporter
There have been a lot of critics federally about South Australia's energy policy. Do you implore other states and maybe the federal government to follow suit? Is this the way of the future?
Elon Musk
I think this is definitely the way of the future. And I think it's worth other states taking a close look at this and seeing if it's applicable to their needs, which I suspect in worst case it is.
Jay Weatherill (SA Premier)
Okay. Ladies and gentlemen, could you thank Elon and Cal for being here.
Elon Musk
Thanks very much.
Jay Weatherill (SA Premier)
Ladies and gentlemen. We also have an opportunity to hear from the representatives of Neo N and we also have Mr. Romain de Russo. Thank you, Romain. And also Frank Bourgier. Thank you. So we're also, of course, this. NEOEN is a world leading renewable energy company based in France, but now has a very large proportion of its international operations based here in Australia. It of course has the Hornsdale Wind Farm, which is over a 300 megawatt wind farm with a very large number of wind turbines. 99 is it. And so this is an opportunity for them not just to provide the services to South Australia, but also in the balance of the battery to also on sell that particular service and participate in the market. So this represents another dimension, if you like, of what we've announced today, which is the future capacity for us to firm up an industrial user and introduce competition into the South Australian part of the market. And this is a critical issue for South Australia to be able to put downward pressure on prices is to actually increase the number of contracts that exist within the South Australian electricity market. So these two gentlemen are also here willing to answer your questions. Thank you,
Elon Musk
Chairman. At what level stage did you first
Tesla Executive
touch base with airflow?
Neoen Executive
From the beginning we've been looking at possible battery suppliers and I have to say that Tesla was quickly identified as outstanding partner with an ability not only to deliver such a large scale product, but also, we strongly believe to help us operate it and integrate it to the grid. The challenge is not only to build it, but it's going to be to have it working with the IMO and the grid to deliver. And we also understood quickly that there were strong commitments at the highest level of Tesla's organization. So.
Reporter
Will you expand the wind farm as well? Are there plans to do other things as well?
Neoen Executive
The wind farm is already the largest renewable generator in South Australia and it might not be in the plan to expand in this location, but there's a lot of other good locations in South Australia where the wind and solar regime are outstanding to do more wind farm with storage. This is really a pilot of how we should integrate renewable with storage to make long term sustainable, dispatchable and competitive energy for South Australia, but also for most of the places in the world.
Jay Weatherill (SA Premier)
What's the cost to neom?
Elon Musk
Are you putting half the bill with Tesla?
Elon Musk
I'll just ask how do you plan to use the battery on a daily basis and whether the way energy is priced wholesale is having to affect that given we have half hour.
Neoen Executive
So there's first of all a contract and a commitment to the SOPH Australian government or the battery will mainly use for the purpose of providing grid security and grid stability and power reserve and there will be additional revenues generated by the market. This will be through sell electricity through EFCAS services and so on, but a bit of IP behind that.
Elon Musk
How confident are you you are going to be able to get batteries next?
Neoen Executive
So the honesdale wind Farm Stage 2 has been built, has been commissioned in June this year, the 8th of June. The third stage is really well underway. So we have been developing and building the wind farm with cement and cpp. So for Australian subcontractor for the electric balance of plant. So in terms of experience and understanding of what is going on on site, we know the site perfectly well, the subcontractors understand the connection and we believe the FCAS trial, which we're jointly with AMO and ARENA performing on Honesdale 2 will also help us getting through the registration steps, which are important steps in that context. We are not that worried on the
Elon Musk
delivery of the battery.
Neoen Executive
We are confident the connection will be performed adequately.
Elon Musk
You're waiting for AEMO sign off for the 100 day period. Do you have any time frame of when that will occur?
Neoen Executive
We will be working very hard with Audrey and the team at AEMU to make it happen as quickly as possible. We have a very short time frame.
Reporter
Can you guarantee that power prices for consumers, for households and for businesses will actually go down?
Neoen Executive
I think guaranteeing would be an overstatement, but necessarily the fact that EFCAS services being provided through competitive sources of renewable electricity would have an impact, yes. Guaranteeing, I'm not sure I would. The wind farm is selling electricity between half and two thirds of the price of the average price of the market. So with the storage, we're going to be able to bring this cheap electricity half of the average price at the moment when the people need it, and not only when the wind blows. And that's really what we want to do.
Elon Musk
Can you just take us through the arrangement with the South Australian government about when the government has the right to tap the battery, how that arrangement will work?
Jay Weatherill (SA Premier)
We think we have an arrangement where I think 70% of the battery is reserved for South Australian government purposes, notionally 30% for market based activity. And there's a series of quite complex agreements about way in which we gain access to that. So there's a clear understanding between us about the use of the battery for our purposes.
Neoen Executive
And it's also important to note that this is a process which is deemed to evolve. We plan with the government and the regulator, regular meetings to make sure that the battery is used as well as possible and that we take good lessons and good understanding from this unique example in South Australia and that we'll be able to replicate it in Australia and in other parts of the world. It is the word Premier and it means we'll have to work on it to make it as efficient as possible.
Elon Musk
Have you got further investment in South Australia and the energy sector planned in the future as well?
Neoen Executive
So NE1 is a global IPP, independent power producer, building renewable energy generators. We have been investing In Australia since 2012, more than 1 billion Australian dollars, and we are planning to invest approximately the same amount of money in the next 12 to 18 months. South Australia has benefited from the core of our investment through the Honesdale Wind Farm and through the Hornsdale Power Reserve. We have several other projects, including in South Australia. Yes.
Elon Musk
Do you see much further room for growth here? Because along with this battery, there is also new energy security.
Neoen Executive
No, I think we were limited in growing in South Australia without the battery. Now we're really going to start to be able to do real wind in South Australia. It's the beginning. The government's initiatives. The energy security plan is really a game changer in the world and South Australia is going to be seen as of now as a leader in being able to solve the equation of intermittent electricity, electricity and grid stability. So Neuyen is very proud to be part of the experimentation Word Premier. And under your leadership, Premier, the world is going to have the eyes focused on the next four months.
Jay Weatherill (SA Premier)
If there are no other questions, could you thank Frank and Romain?
Elon Musk
Thank you very much.