Energy revolution

The ambitious plans of Lyon and Tesla show how rapidly the energy revolution is unfolding even as acting Prime Minister Barnaby Joyce dismisses grid batteries as too small to make a difference and ex-PM Tony Abbott calls for a new coal-fired power station.

SA gets more than two-fifths of its power from wind and solar energy and Premier Jay Weatherill said on Friday his state is leading the world in renewable energy and battery storage.

Three battery systems installed for Californian utilities by Tesla, AES Energy Storage (Lyon's partner) and Greensmith, which is partnering Adelaide-based ZEN Energy, pack a combined 77.5MW of power and are currently the world's biggest.

Lyon has also announced plans for an 80MW battery in Nowingi, about 100 kilometres east of the SA border in northwestern Victoria, and the Victorian government is tendering for two batteries with a combined 20MW output.

Solar rooftop is enjoying a resurgent boom and batteries are expected to follow suit. Energy software firm Greensync says it will have 300MW of "demand response" – an approach favoured by the Finkel review of energy where customers curtail their power and export energy from solar panels and batteries to the grid to meet peaks – by next summer.

Mr Green said Lyon could switch the battery on in stages to help meet summer peaks and prevent blackouts in SA. Electricity price spikes are more frequent in the summer, improving commercial outcomes for suppliers able to step in when demand surges in hot weather.


Risk in scaling up

The short timelines show how new energy storage technologies can be brought on line in less time than it takes to do a feasibility study for a conventional power station, hydro project or high voltage interconnector.

But Mr Musk stressed the risks and technical challenges of building battery projects at least three times larger than the largest installed anywhere in the world to date.

The $1 billion solar-battery farm will be in SA's Riverland district. Lyon Solar

"We are confident in our modelling techniques and in the design of the system. But whenever you make something three times as big as anything that's come before there's always some risk," he said.

Mr Green said Lyon's Riverland battery would complement Tesla's because it would be designed to deliver 100 megawatts of power for five or six hours or, say, 50MW for 10 or 12 hours.

Tesla's battery is designed to deliver shorter bursts of power to help stabilise SA's grid. The Los Angeles-based company on Friday won the SA government tender to build a 100 megawatt battery system with 129 megawatt hours' storage at an undisclosed cost. Mr Musk put the cost at "north of $US50 million ($66 million)".

Lyon said on March 30 it planned to build a 100MW battery with capacity of 400 megawatt hours – four hours at full power – at the Riverland town of Morgan for $200 million-$300 million.


An artist's impression of Lyon group's proposed solar battery plant in Nowingi, north-western Victoria, which would break new ground in the range of services offered to the electricity grid. Supplied

Short bursts vs duration

But Mr Green said the design of the Tesla battery left a gap in the market for "long duration batteries" to fill and expanding its duration would not cost much more because of economies of scale.

"We are probably looking at 500 to 600MWh," he said. "I am not saying short discharges won't be needed – they will. But we are thinking that our longer duration battery will deliver some of the characteristics that the market will be looking for as the market matures."

Little-known Lyon Group, backed by Mitsubishi Corporation, a Japanese global conglomerate with sales of $US250 billion, and US investment giants fund Magnetar Capital and Blackstone, also plans a $100 million-$200 million battery in Roxby Downs, SA, to be built with a 120MW solar farm.

Mr Green said the "Kingfisher" proposal was proceeding slowly because of discussions with government and BHP Billiton, which owns the giant Olympic Dam copper and uranium mine nearby and lost power for days after a huge storm crippled SA's power grid last September.

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ZENEnergy chairman Ross Garnaut, said the outcome of the tender was "disappointing for ZEN" – its Port Augusta battery project is designed to deliver similar services to Tesla's – but a "magnificent outcome for SA".

"The big battery and the market and systems integration that ZEN developed over the last 20 months would have a large positive effect in stabilising SA electricity supply," he said.

"It would increase competition in the wholesale energy market leading to lower overall electricity prices. To have beaten us in a competitive process, the Tesla project must be even better.

"Over the next few weeks, ZEN will assess whether there is still room in the SA market for our own Port Augusta battery based grid energy solution."