Malcolm Turnbull should encourage Australia’s battery energy storage industry now he has “taken interest in the tweets of an American billionaire”, Zen Energy chairman Ross Garnaut says.

Garnaut was referring to Elon Musk, the billionaire co-founder of electric car giant Tesla, who tweeted that Tesla could solve the power shortage issue causing price spikes and blackouts in South Australia within 100 days by installing 100-300 megawatt hours of battery storage.

Turnbull subsequently tweeted that he had phoned Musk and enjoyed a “great, in-depth” conversation.



But Australian companies had been working on large battery projects for years, Garnaut said, including one by Zen Energy in the upper gulf of South Australia which it had discussed with the market.

The core of the project would be to supply baseload renewable power to large energy users, initially in South Australia and then more broadly, Garnaut said.

“In this Trump era, we have a world where nothing is real until an American billionaire tweets about it,” Garnaut said.

“What we’re working on is having it ready for summer, the time of greatest stress on the grid and that’s when you really need to bring all your grid to stability.

“Zen Energy has funded it all so far, and there has been a lot of technical work and economic modelling done to see what is required in the market. We have a lot of close relations with energy providers and communities as part of the development work. When it comes to investment in the large equipment, we have the support of external investors.”

Zen would manage the battery and its interaction with the grid, but the owners of the battery would be external investors, Garnaut said. The battery would absorb electricity when it was cheap and abundant on the wholesale power market, and make it available when scarce.

“The other value of the large battery is to grid stabilisations services,” he said. “We are focusing on providing 100Mwh of battery storage of energy, so it will make a substantial contribution and will be ready by summer.”

On Tuesday the South Australian premier, Jay Weatherill, is due to release his energy plan, which is expected to address the blackouts and his vision for renewable energy. He did not return calls from Guardian Australia requesting comment on Monday.

The chief executive of the Energy Storage Council, John Grimes, said there were a number of Australian companies that were more price-competitive than Tesla and which, in a consortium, could also deliver the project to stabilise South Australia’s energy grid in 100 days.

“This isn’t just a ploy from Musk,” Grimes said. “He’s right, this really can be done.”

He said there were a number of reasons the potential of battery storage hadn’t captured broader public attention before. Although Turnbull has a solar system and battery storage on his own Sydney property, Grimes said that “politically we have been in a backward-looking, unhelpful debate talking about so-called clean coal technology and running down state renewable energy targets”.

“The second thing is rapidly changing economics,” Grimes said. “If you thought about doing this even three years ago the price would have been something like four times higher than what you can do it for today.

“Really cheap battery technology, cheap solar and really smart energy technology systems, or smart computers, that will run this network are about to change everything. A massive transition is about to occur.”

Within less than 10 years, the technology would be such that people could take control of their own energy requirements and enter into “Uber-style” energy sharing arrangements, he said.

“We are not advocating people getting off the grid altogether, but the tech will allow us to trade electricity between ourselves so when I have excess solar power at 2pm I can offload it, for example, to a supermarket that needs two freezers running.



“This revolution in energy begins in 2017 and it will be all done and dusted within 10 years.”

He urged the federal government to show strong support for the battery sector as Australia risked losing some of the country’s best researchers. While Turnbull had been entertaining clean coal, the battery sector had advanced rapidly and come up to “bite him on the bum”, Grimes said.

“We are slugging our guts out to build the business in this sector, but a tweet from Elon Musk grabs the government’s attention,” Grimes said. “I’m not saying Tesla should be excluded, but don’t fast-track a discussion with an overseas company when you have capability right here, right now, in Australia. Let there be a transparent bid process. And let’s give Australian companies a fair go.”

The co-founder of Lyon solar, David Green, said not only had battery prices fallen substantially, but their functionality had increased significantly.

Lyon is developing an advanced combination solar and battery storage plant in South Australia known as the Kingfisher project, which is connected to a grid with operational mining activities. Lyon expects it to be operating commercially and delivering 100Mwh of solar PV with up t0 40Mwh of battery storage by the end of the year.

“The amazing thing is batteries are a technology with a range of functions,” he said. “They can function like a generator, they can act faster than any other generation facility to stabilise voltage, and they can provide power to isolated areas.

“In Australia at present there are some issues that can be barriers to a commercial role for them, and some of those are institutional and some are cultural.”

One barrier was the way regulators defined batteries under market rules, which differed depending on whether they were used as part of transmission networks or as generators. And Australian markets were not as familiar with the operation of batteries, he said.

Lyon had well-advanced battery projects in every state, Green said. The company is working with US-based energy giant AES Energy Storage to develop 200-250 megawatts of large-scale battery storage using AES Energy’s technology.

“All of our projects we have raised capital for, and it is the private sector who should be funding these projects,” Green said.

“The principal role for government should be to get market settings right so projects like this can be commercialised. The government needs to help to create an environment where batteries can capture maximum revenue so they become commercial in their own right so that governments aren’t needing to provide subsidies.”

The power the projects generated would be directed into the electricity grid for retailers to buy and sell on.

“We will either sell the power directly into the market and take the risk on what pricing we get out of wholesale, or we will enter into a contract with a retailer who will buy a certain amount of power at a certain price and they put that into their portfolio of other contracts and on-sell that,” he said.



Contract negotiations were under way between energy providers and Lyon, and an announcement would be made within weeks, Green said.

The chief executive of the Clean Energy Council, Kane Thornton, said Australia was about to find out how close to being truly commercial battery energy storage technology was.

“Sometimes it takes rockstar tech entrepreneurs having a Twitter conversation to create the excitement around technology breakthroughs,” Thornton said. “There’s nothing new in what Tesla are proposing. But I don’t think anyone should complain about Musk getting the attention of the prime minister about it. These are exciting times times ahead.”