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Tesla's massive 100MW South Australian battery is putting a big dent in 'gas cartel' profits

By Polycount · 16 replies
Feb 6, 2018
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  1. Back in March, Tesla boss Elon Musk promised to provide South Australia with a 100MW battery to help the state make the switch to more affordable, renewable energy. At the time, he promised to get the project done in under 100 days or give it to them for free - more than living up to his promise, Tesla finished the battery installation in only 63 days.

    After officially being switched on in December, the battery has gone on to save South Australia millions of dollars. It's accomplished this by easing some of the burden associated with high FCAS costs.

    For the unaware, FCAS (frequency control and ancillary services) charges are costs the Australian Energy Market Operator must pay when they ask energy companies to contribute some of their network services to the government in the case of scheduled maintenance or energy system faults.

    These costs are typically nothing short of astronomical, RenewEconomy says. At times, South Australia's big gas providers "sometimes [charge] up to $7 million a day for a service that normally comes at one-tenth of the price," typically adding up to about $11,500 to $14,000/MW.

    The most recent FCAS request was for 35MW of energy - after an initial, perhaps inevitable price spike, Tesla's 100MW battery bid into the market to help reduce costs to around $270/MW - a tremendous discount for the Energy Market Operator. According to RenewEconomy, this move could have saved South Australia several million dollars in FCAS charges in a single day.

    Permalink to story.

  2. yRaz

    yRaz Nigerian Prince Posts: 2,864   +2,169

    Well maybe if the "gas cartels" energy system actually worked they'd have gotten away with charging their prices.

    However, Tesla fixed their outage problems and reduced their energy costs at the same time. I really want to know why this company thought they could get away with this crap. There are plenty of bad things people can say about Tesla but this "gas cartels" has left me scratching my head ever since I first started following this story
    Theinsanegamer and Reehahs like this.
  3. wiyosaya

    wiyosaya TS Evangelist Posts: 3,872   +2,205

    Lack of competition.
    Theinsanegamer and Reehahs like this.
  4. Uncle Al

    Uncle Al TS Evangelist Posts: 5,300   +3,707

    He picked the perfect continent for wind and he needs to explore solar there as well. The "down under" has been victimized for years by some of these companies ... it's a nice change of pace to see Musk being successful there; I only hope their government seizes on the opportunity and continues the project ...
    Charles Olson likes this.
  5. SalaSSin

    SalaSSin TS Booster Posts: 160   +83

    Correction: Lack of competition that won't step into the cartel....
  6. captaincranky

    captaincranky TechSpot Addict Posts: 14,828   +3,917

    It gives me pause to wonder, how many shills for the gas companies, are elected officials, who are in a position to rubber stamp such extravagant charges.

    Prima facia, this looks as much like political corruption as it does anything else.
  7. Evernessince

    Evernessince TS Evangelist Posts: 3,913   +3,364

    The same reason any cartel or monopoly does, because either palms are grease or they have no choice. You could look at a million things in America and say the same about thing still going on.
    Charles Olson and Peter Farkas like this.
  8. wiyosaya

    wiyosaya TS Evangelist Posts: 3,872   +2,205

    Exactly. One has to wonder what law, or lack thereof, allowed such rape?
  9. Godel

    Godel TS Addict Posts: 172   +88

    Basically they're a bunch of little Enrons, helped along by largely right-wing governments' "private sector, good; publicly owned, bad" philosophy.

    Although the left wing governments were using the publicly owned utilities as a source of surreptitious taxation rather than as a not-for-profit public good, so they're all to blame.

    This Guardian article explained how the cartel super-profits scam worked.

    Archean likes this.
  10. pawel04

    pawel04 TS Booster Posts: 82   +90

    Yer to be honest I welcome any positive news regarding renewables in Australia, we live on a continent that receives a stupid amount of sunlight, is surrounded by wave energy and has one of the windiest capital cities in the world yet we harness - in my opinion - a ridiculously small amount of this energy.
    Charles Olson likes this.
  11. Darth Shiv

    Darth Shiv TS Evangelist Posts: 1,960   +576

    It's more than that. The Government ALLOWED them to drill for oil in our territory for peanuts then SELL at the market rate rather than anywhere near cost plus reasonable profit. They are gouging the Australian public at an enormous rate.

    We should mandate the profit margin - we own the oil. Not the gas companies.
  12. Polycount

    Polycount TS Evangelist Topic Starter Posts: 1,712   +384

    I was also pretty happy to see this - I have a number of friends in Australia who share your concerns. Hopefully, companies like Tesla keep making similar deals with government officials.
    cliffordcooley and pawel04 like this.
  13. Reehahs

    Reehahs TS Guru Posts: 729   +472

    Same thing happening in UK with private companies charging NHS stupid money for products normally sold for single digits.
    Theinsanegamer and Lounds like this.
  14. Boilerhog146

    Boilerhog146 TS Evangelist Posts: 620   +217

    you guys have a Tarsands development down there similar to what they have in Alberta? theres part of the problem,BIG OIL,lots of palms being Greased,
    Alberta has Lots of wind, lots of sun. but BIG OIL runs the show.

    WE OWN THE OIL,lol, that's rich,

    I wonder How many Elected officials ,are actually Shills For BIG OIL.

    here the #1 problem down there . in a NUT SAK!

    they allready shut that down and mothballed the place once , open for business again.


    You all notice they put in 1 battery ,1 ,not 5, 1 was enough to shut most of you up. how many jobs did that one Battery create, long term. not many compared to what the tarsands brings for jobs, , some basic math and economics there.
    your ocean around you is being destroyed by other countries anyway, the Indian ocean beside you is the dirtiest on the planet. remember the garbage recovered when looking for a planes wreckage. they couldn't tell what was what ,there was so much garbage.

    we are an island as well, and one thing is said and another is done.or not.dumping at sea is still good business. its still cheaper to pay a fine (only when caught) than pay to dispose of some stuff.all the time.I can go on and on about the great Hypocrisy I've lived with for years. but you get the message. your living one too.
    Last edited: Feb 7, 2018
  15. pawel04

    pawel04 TS Booster Posts: 82   +90

    Firstly, 1 battery didnt shut me up, but I see it as a small step in the right direction and any positive news that comes out for renewables will begin to sway the average Australian that I think is still very uneducated on the topic and therefore dont necessarily want/push for change. As soon as the majority of people realise the benefits of renewables and the existance of issues such as the one youve just mentioned we will hopefully begin to see a change in the rhetoric our pathetic politicians and media push.

    Regarding the hypocrisy, im very much aware of it as well hence I get heated up (apologies for the above rant haha) when the topic gets brought up.
    Boilerhog146 likes this.
  16. Richsav

    Richsav TS Rookie

    South Australia has by far the world's most expensive retail prices for power and for a so-called developed and first-world area the most unreliable power as well. All this totally due to the absurd push for "renewable" energy from wind and solar and the decommissioning of other power sources. Musk's ridiculous battery system will supply the state with power for an amazing and totally irrelevant 4 minutes. Luckily I don't live in that dump.
  17. Electric cars are subsidized by government. Oil probably is too. In the end, we're all screwed. Aside, gas isn't going away. There's an infinite supply of oil on the planet. Unlike batteries.

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