Tesla sold a financial product. The government needed to cover some of the risk of when power lines go down, or if something goes wrong in another part of the network. It needs to cover this risk quickly for political reasons.
The chance of another similar storm knocking out the power lines again, which now have bigger maintenance crews, is very small. But if there is another blackout and they didn't do anything? They'd be in big trouble with the newspapers.
So Tesla really sold a risk product. Since SA could have spent the money on more generation. But not all people understand that.
The 100MW stage of that wind farm cost $250 million, and took some years to reach agreement, and some years to build. By promising to build the battery quicker, they have covered that risk during the time they need it.
They could have installed another wind farm the same size in a different part of the state in order to reduce the risk, and fill up the valleys of power generation. That has been proven to work too, and the benefit is you have more power generation in the peaks.
The cost of the blackout was estimated to have cost $367 million to business. 12% of the businesses had backup power generators themselves, and about a third of the businesses had bought insurance for such situations. Life critical systems are required to have independent backup power.
By the time it's built there will probably be a similar amount of solar power installed as the battery (by current rates of installation). There's 2,034 MW of industrial solar being constructed in Australia for 2017. This doesn't include stuff going onto roofs of houses, of which there are millions of houses already covered and more being done. 5KW solar installed in Australia can be done for $5,000AUD or less for a 5KW system. That's $100 million AUD for 100MW on 20,000 homes.
There's also a lead smelter which is being upgraded, so it will have modern equipment which lets it use power more dynamically... effectively making it a battery. It can take in power, or not, as it needs. They can also shut down their power hungry desalination plant if needed (which they don't really need when there is not a drought).
So now they have a backup battery, a backup gas power plant, and backup power lines to another state, more efficient industrial power users, and hundreds of thousands of small independent solar power generators.
It's not just insurance if power goes down. It'll knock the edges off the price-peaks, which SA suffers badly from.
Gas fired power stations don't fire up until they can get the maximum price possible, and often try to drive the price higher by stopping producing power. SA is very vulnerable to that because there is no backstop of coal prices. OTOH, the minimum price of wind power and solar is much lower.
These batteries will kill the peaking gas generator game.
>They could have installed another wind farm the same size in a different part of the state in order to reduce the risk.
From a macro level, wind and solar makes the most logical sense when twinned with battery storage, the nature of the power they produce and to a lesser extend how users consume that power is unpredictable, so the battery is used for peak shaving the demand and supply.
Whilst not overtly disagreeing with any of your major points, the alternative to this 'financial product' as you term this infrastructure investment (an asset on the ground is hardly a financial product, because a financial product is worth nothing once it's term ends, whereas even when the cells can hold no more charge they're going to be worth a residual in recycling) is an alternative where we are actually building more infrastructure - gas or coal.
This one arrangement has the potential to totally change the completely derailed energy policy discussion in australia, which continues to default to a coal or gas fired immediacy and future, out of fear over rationality.
The chance of another similar storm knocking out the power lines again, which now have bigger maintenance crews, is very small. But if there is another blackout and they didn't do anything? They'd be in big trouble with the newspapers.
So Tesla really sold a risk product. Since SA could have spent the money on more generation. But not all people understand that.
The 100MW stage of that wind farm cost $250 million, and took some years to reach agreement, and some years to build. By promising to build the battery quicker, they have covered that risk during the time they need it.
They could have installed another wind farm the same size in a different part of the state in order to reduce the risk, and fill up the valleys of power generation. That has been proven to work too, and the benefit is you have more power generation in the peaks.
The cost of the blackout was estimated to have cost $367 million to business. 12% of the businesses had backup power generators themselves, and about a third of the businesses had bought insurance for such situations. Life critical systems are required to have independent backup power.
By the time it's built there will probably be a similar amount of solar power installed as the battery (by current rates of installation). There's 2,034 MW of industrial solar being constructed in Australia for 2017. This doesn't include stuff going onto roofs of houses, of which there are millions of houses already covered and more being done. 5KW solar installed in Australia can be done for $5,000AUD or less for a 5KW system. That's $100 million AUD for 100MW on 20,000 homes.
There's also a lead smelter which is being upgraded, so it will have modern equipment which lets it use power more dynamically... effectively making it a battery. It can take in power, or not, as it needs. They can also shut down their power hungry desalination plant if needed (which they don't really need when there is not a drought).
So now they have a backup battery, a backup gas power plant, and backup power lines to another state, more efficient industrial power users, and hundreds of thousands of small independent solar power generators.
They've definitely covered their arses.