“The Consultation Paper also notes that ‘the ability of non-synchronous forms of generation such as wind, battery storage and solar photovoltaic powered generators to provide [frequency control, inertia and voltage parameters] easily is still developing’,” Tesla writes in its submission.

“With due respect to the Energy Security Board, Tesla believes that Hornsdale in South Australia has already demonstrated how effectively battery energy storage can provide these critical system security services.”

The Hornsdale Power Reserve is the official name of the 100MW/129MWh Tesla big battery that has been installed next to the Hornsdale wind farm.

Since it began operations in early December, it has stunned the energy world with its display of speed and versatility, its ability to intervene in different markets, and its ability to reduce the price gaming by the incumbent gas cartel.

To illustrate its point, Tesla included this chart above, highlighting the speed with which the Tesla big battery switched from charging to discharging in response to sudden changes in frequency. The switch occurred in a matter of a few seconds (bottom row).

Tesla noted that its battery accounts for around 30 per cent of the capacity in the South Australia market for FCAS (frequency control ancillary response, a key to grid security), so is a significant player.

But it also noted while 30-40 per cent of its services had been delivered to frequency markets, it had not been paid because the technical specifications on Australia’s grid were written based on fossil fuel generation assets. An issue we have highlighted here.

It urged rule-makers and policy makers to make changes that took account of new technologies. “Achieving an appropriate mix of generation assets is dependent on removing existing market barriers for battery energy storage as a technology type,” it says.

As an example, one perverse outcome of the NEG’s proposed “reliability obligation” may be that batteries like Tesla are required to pay for back-up, even though that is the very service they are providing. It all comes down to the way that such new technologies are defined.

Tesla’s comments reflect a broad frustration with some of the assumptions made by the ESB, its focus on “synchronous generation”, and its ignorance about new technologies. A similar warning was made last week by a group of 10 retailers in their submissions.

They pointed out that the issues that the ESB sought to address in the NEG – such as the potential reduction in synchronous generation – may not be an issue in five years time, and the NEG may end up “gold plating” such assets.