Tesla’s 100MW Powerpack in South Australia making millions.

South Australia, the largest in the world for now, went into operation last month. Now it's showing its potential to be highly profitable, by making an estimated $1,000,000 AUD in just a few days.

This is insane:

"What we are seeing here is the Powerpack system enabling Neoen to sell electricity at up to 14,000 AUD per MWh"

It took some serious political commitment to screw up a power grid that badly.

I'm unconvinced that screwup - if any - was solely political.

Need to be sure that this isn't merely a disguised corporate press release.

There's no screw up. The electricity spot market is designed to pay large a mounts of money to people who can provide short term power very quickly - i t's the mechanism that makes it worthwhile to invest in things like quick-s tart gas turbines generators, pumped storage and the Tesla "Powerpack".

They don't make huge profits over the whole year, but they do make enough t o make the investment worthwhile, and they get most of their money for supp lying power for brief periods at very high prices.

A year or so ago I sat through an hour long talk from somebody who had stud ied the likely evolution of Australia's electricty generation system (towar ds generating and using a lot more solar power) and the presence of very hi gh peak rates (for short periods) in the spot market was explicitly discuss ed and explained.

It was a pretty impressive talk and a couple of my IEEE colleagues were rat her pleased with themselves for having persuaded the speaker to deliver it.

We're seeing similar things in Germany, like people being paid to not use their windmills. Or buying wood chips from the USA to burn to make dirty high-price "renewable" power.

Or Australia going green and power-intermittent while exporting hundreds of megatons of coal.

Best politicians money can buy.

The price is self-regulating, isn't it? As more sources step up and deliver, the spot price stops going up, and even goes back down? As more peak-power sources become available in the future, peak prices drop further, right?

At some point, people may realize it's a productive investment to lobby for, and then build, new baseline coal plants, but that's a feedback path with a much longer time constant (years).

Likewise, batteries and other storage methods will become somewhat cheaper as they become mainstream on the grid level, but price overall is still a big problem to solve, for EVs as well as solar power. Which, of course, is the underlying motivation, and why we're talking about this case.

Curious that such intense price fluctuations aren't exposed to the consumer; I can imagine many people would be more than willing to sweat a few evenings for money like that. That said, it's the kind of money where you get ethical problems: a caretaker might be more than willing to turn off the A/C, say, and then you start seeing deaths from heat exhaustion...

Tim

The market used to be self-regulating, until regulators took over.

That's inevitable, given the "dispatch" problems inherent in wind power. Such issues really should be accounted for in the price of wind power.

Yes, that's, um, dysfunctional

I see no /evidence/ of corruption. Stupidity and ineptness, yes; no surprises there.

The grid in South Australia was doing a slow meltdown when they decided to buy a Tesla Powerpack. The choice is occasionally paying the high cost of intermittent peak power or building more conventional power plants to handle the load peaks. Paying for a few minutes of extremely expensive electricity is generally considered better and cheaper than building standby power plants that are only used during intervals of peak usage.

You can monitor the cost in the LMP (location marginal pricing) graph for New England at: See the Five Minute Real Time Graph. Right now, it's floating around $35/MegaWatt-hr. If you pull down the "Date" box and select a day during the work week, you'll probably see $150/MW-hr. If you look around for where plants go on or off line, you'll see spikes in the hundreds of dollars per MW-hr. See 01/25/2018. I think the highest I've seen in California was about $500/MW-HR which lasted about 10 minutes.

When a load leveling battery bank, such as the Powepack is involved, the switching between power sources is much faster. It's possible to switch the power pack in and out in fractions of a second. So, paying $14,000/MW-hr is not a problem, as long as it's not done too often or for too long. It costs money to charge the power pack from the grid or nearby wind farm, although this is done at a much lower cost, and later returned to the grid at the higher costs, which is what pays the debt retirement on the power pack and the investors profits. If you look at the ISOexpress graph, you'll see that the marginal cost of electricity often hits zero, which is where the grid has a surplus of electricity. That's the perfect time for a battery bank to charge its batteries at essentially zero cost. Hopefully, the rather high short term expenses will give the power plant owners some time and breathing room to fix or replace their failing coal power plants.

Notice the two graph lines mostly tracking each other at: The idea is for the system operators to supply just enough power to meet the demand, without supplying too much. Any excess power is wasted as there's no load available to use it. At best, it's a waste of money generating the excess power. At worst, it can cause the grid to fail. Ideally, the power pack is charged on this excess supply.

More: Locational Marginal Pricing (LMP)

CAISO price map:

n/

John Larkin is "seeing things" in Germany? He means that he has been fed so me politically biased commentary disguised as news about Germany.

That would be silly, unless the wood chips were bankrupt stock, being sold at a very low price. Wood chips are usually sold as feedstock for conversio n into particle board or wood-pulp for the paper industry.

Hundreds of megatons of coal isn't a lot - China digs up about 3.5 billion tons each year, and what it imports from Australia is 3% of that - and abou t half thr imported coal is coking coal for steel making.

Australia isn't all that green - we did sign up to the Paris accords, but t he current government isn't showing any enthusiasm for delivering what we p romised.

The electricity generating companies are more enthusiastic about renewable power sources than the current government - they seem to have noticed that there's only a finite amount of coal to be dug up, and that it's going to g et progressively more expensive to extract as we move on to digging up the harder-to-extract reserves.

Australia is 13th on the corruption perceptions index, and the USA 18th.

Most Australian states now have permanent commissions to keep an eye out fo r political corruption at state level, but federal politics hasn't got one yet.

That is the way it is intended to work, and it does seem to be working.

The NSW IEEE had lecture about a year ago from one of the guys who set it u p, and he was a bit peeved that it worked on half-hour chunks, when his com mittee's recommendation had been for ten minute chunks, but the politicians who had turned the recommendations into legislation hadn't entirely unders tood how the system was supposed to work.

The huge fluctuations are on the wholesale price paid by the distribution companies. Idividual consumers pay a flat rate that gets revised every year.

Industrial consumers have deals where they will reduce consumption over various time-scales, and the "smart grid" will eventually offer individual consumers deals where they will pay less if they don't use electricity when it's expensive.

Thomas Friedmans's "Hot, Flat, and Crowded"

talked about using the batteries in parked electric cars as short term energy stores for the network, but that doesn't seem to have happened yet.

As a Californian, John Larkin will remember "self-regulation" by Enron ...

The electricity market used to be seen as a "natural monopoly", best run by civil servants, until "privatisation" got fashionable, and Enron illustrated how you could set that up badly.

It won't be able to do that often. The high price it got for electricity was a consequence of the very high temperatures in SA. Most of the time, the price is much lower.

Sylvia.

It doesn't have to. Occasional very high prices for electric power are exac tly what pays for the facility.

Apparently it never rains in South Australia ? Not even once a year ?

Looking at the picture, the cabinet doesn't seem to be too weatherproof :-)

Where do you think excess generated power goes?

Jeroen Belleman

This company offers something like that, though it is mostly marketed to those with home batteries installed: