Elon Musk says Tesla can solve South Australia’s energy problem. Not only that, he says he can do it in 100 days or fewer, or the system will be free! For a man who is used to making bold predictions, this is even bolder than usual.
Last September, a powerful storm wreaked havoc on the utility grid in South Australia, home to the southern city of Adelaide. A surge in renewables — both wind and solar — has made operating coal-fired generating plants and even some gas-fired facilities unprofitable in that Australian state. As a result, it has come to rely on a link to the grid in nearby Victoria where Melbourne is located, but the storm severed that link.
Since then, politicians have been pointing fingers and accusing each other of skullduggery in the first degree. Some have made the extraordinary claim that renewables were to blame for crashing the grid. The argument goes that if renewables weren’t so cheap, the coal- and gas-fired plants would still be online. Without them, spot prices for electricity rose on more than one occasion to the legal maximum of $14,000 per kilowatt-hour!
The problem is not renewables, it is intermittency. South Australia has an abundance of wind and solar power but little grid storage capability. That’s where the indomitable Mr. Musk enters the picture. His cousin, Lyndon Rive, is CEO of SolarCity and said his company could solve South Australia’s energy problem. How soon, a desperate Aussie asked? Within 100 days, Musk tweeted. Then he backed it up with this extraordinary offer:
Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?
— Elon Musk (@elonmusk) March 10, 2017
Musk can be so confident because the Tesla Gigafactory in Nevada is now spitting out the battery cells that go into the company’s Powerpack grid storage units — pumping them out “as fast as machine gun bullets,” in Musk’s own words. The company just completed one of the world’s largest lithium-ion grid storage installations for Southern California Edison earlier this year — in just over 90 days once the contracts were signed.
Musk wasn’t done dropping bombshells, though. Next came this:
$250/kWh at the pack level for 100MWh+ systems. Tesla is moving to fixed and open pricing and terms for all products.
— Elon Musk (@elonmusk) March 10, 2017
$250 per kWh is extraordinarily low and undoubtedly undercuts anyone else in the business. You want grid storage? You got it. Just pick up the phone and call Elon.
Grid storage may not be as cheap as some might like, and it’s not going to solve every grid problem. But keep in mind that, unlike a fossil-fueled plant, there are no costs for fuel once the facility is installed. And if renewables keep millions of tons of carbon emissions out of the atmosphere, everyone on the plant gets to enjoy longer, healthier lives. It’s hard to put a price on that, but fossil fuel stooges like Scott Pruitt would prefer we not think about such things.
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