The current population of the state of South Australia (SA) in the country of Australia is estimated to be 1.68 million people. In 2015, the SA power plants used natural gas (37%), wind (34%), coal (23%), and solar (6%) to generate electricity. In May 2016, the state government curtailed the use of natural gas and closed the last remaining coal fueled power plant in South Australia.
In 2017, the SA power plants used wind (71%), natural gas (24%) and solar (5%) to generate electricity. The utilities had virtually no battery storage systems for the intermittent renewable energy, wind and solar facilities. As a result, residents experienced weekly power outages and the most expensive electricity costs in the world. The ugly reality was that the SA government didn’t effectively prepare for the dramatic curtailment of fossil fuel power plants.
Elon Musk, Tesla’s CEO came to the rescue of the residents of SA. Mr. Musk told the SA government that Tesla would build the world’s largest lithium-ion battery storage system to stabilize the state’s power grid within 100 days. Mr. Musk stated that if Tesla failed to meet the deadline, he would pay for the entire battery storage system. Many thought Tesla couldn’t meet the deadline, which would bankrupt the company.
Elon Musk and Tesla did meet the deadline and the energy storage system has helped stabilize SA’s power grid. The energy storage system is located Hornsdale, approximately 150 miles north of the state capital, Adelaide. Tesla’s energy storage system has helped avoid power outages and improve power plants operating efficiencies, reducing electricity costs.
South Australia provides several valuable lessons for countries, states or cities planning to rapidly move from fossil fuel to renewable energy. Any intermittent renewable energy source, like wind or solar must have adequate battery storage systems to effectively provide reliable, cost effective power. In my opinion, the SA poor planning and preparation was inexcusable. Brownouts and high electricity prices inevitable result in an unhappy electorate and an inexcusable slow down in the growth of renewable energy.