Skip to content

Elon Musk Cons $50m Out Of South Australians

November 25, 2017
tags:

By Paul Homewood

 

h/t Patsy Lacey

 

image

Elon Musk has managed to win a $50m bet by building the world’s largest ever lithium-ion battery.

The billionaire chairman and chief executive of Tesla has delivered a renewable energy project for South Australia, building the world’s largest ever lithium-ion battery.

Mr Musk and Lyndon Rive, the head of Tesla’s battery division, proposed building an energy storage facility in the state following severe blackouts after a storm in March 2016.

At the time Musk made a bet, saying Tesla would get the battery installed and working within 100 days of the contract being signed or the $50m (£37m) system would be free.

This deadline was due to expire on 1 December, ahead of which state Premier Jay Weatherill has announced that the project had been completed.

The battery will store energy from a nearby wind farm run by the French renewable energy company Neoen.

"South Australia is set to have back-up power in place this summer through the world’s largest lithium ion battery, which is set to be energised for the first time in the coming days as it enters a phase of regulatory testing," Mr Weatherill said.

Musk tweeted: "Congratulations to the Tesla crew and South Australian authorities who worked so hard to get this manufactured and installed in record time!"

As a maker of electric automobiles, Tesla has also invested heavily in energy storage and solar panel technology – and it believes its technology could develop far beyond vehicles and supply power to the grid.

The deal has seen Tesla manufacture a 129MWh battery in Jamestown, a town with a population of less than 1,500 people, just over 120 miles north of Adelaide.

"This is not a minor foray into the frontier," said Mr Musk at the time.

"I’m pretty darn impressed with South Australia willing to do a project of this magnitude that is beyond anything else in the world.

"That takes a lot of gumption," he added. "I do see this as something that the world will look at as an example."

https://uk.news.yahoo.com/elon-musk-wins-50m-bet-101000960.html 

When a con merchant is around, it is best to keep a close eye on the pea!

For a start, it is not the world’s largest ever lithium-ion battery. It is actually a collection of smaller ones.

 

image

 

There was nothing remarkable about constructing the whole thing on time, otherwise Musk would not have taken the bet on in the first place.

 

But what about the claim that it can provide back up power and, in the words of the Tesla VP, solve the black-out problem in South Australia.

The battery is rated at 129 MWh.

 

image

Currently generation in South Australia is running at 1878 MW, so the Tesla battery could only run the grid for 4 minutes.

Alternatively, according to Tesla, it could power 2500 homes for a whole day, or 15000 for four hours.

 

 The battery will serve as a back-up power system capable of powering 2,500 homes for a day

http://www.dailymail.co.uk/news/article-5116211/50-MILLION-bet-Tesla-Atlassian-paid-off.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

 

Given that there are 673,000 households in South Australia, the Tesla battery is an expensive irrelevance.

At a cost of £37m, the 15000 households who stand to benefit from four hous standby would have to pay £2466 each.

Hardly a bargain!

The whole exercise has been no more than an exercise in self promotion for Musk. Unfortunately, South Australians have had to pay dearly for it.

 

 FOOTNOTE

To put these numbers into perspective, the population of South Australia is about 1.7 million.

By comparison the UK’s is 64.1 million.

In terms of the price of the battery per capita, the cost in the UK would equate to £1.4 billion. I don’t think even our climate obsessed government would attempt to get away with that.

37 Comments
  1. Barry Capsey permalink
    November 25, 2017 10:50 am

    NEVER bet against Elon! He’s clearly capable of almost anything, because he KNOWS he can do it. Genius.

    ________________________________

    • Robert Jones permalink
      November 25, 2017 10:55 am

      Barry, you may have missed the point; the bet was the shyster’s way of deflecting attention from the other hand!

      • HotScot permalink
        November 25, 2017 11:27 am

        Robert Jones

        It wasn’t a bet at all, it was a contract that Musk said he would do for nothing if he didn’t meet the deadline. It was nothing more than a publicity stunt. I wonder if overrun penalties might see him delivering it for nothing, or next to nothing had he missed the deadline anyway.

        Heads I win, tails you lose.

    • John Palmer permalink
      November 25, 2017 10:56 am

      You appear to have left your sarc off!

    • Sheri permalink
      November 25, 2017 2:59 pm

      Yes, it seems Musk can con virtually any politician into spending billions of dollars of other people’s money. Sure, he’s a selfish jerk, but he’s saving the planet and that’s what counts, right?

  2. RAH permalink
    November 25, 2017 11:07 am

    I have already bet against Musk. I don’t have a dime invested in anything he is connected with and based on the financials, that is a very good thing.

  3. November 25, 2017 11:12 am

    “For a start, it is not the world’s largest ever lithium-ion battery. It is actually a collection of smaller ones.”

    Be fair Paul, ALL battery’s are a collection of smaller ones (the 12V one in your car consists of 6x 2volt battery cells).

    To be pedantic it maybe the world’s largest ever lithium-ion battery bank; but as you say, at what cost.

    “the Tesla battery could only run the grid for 4 minutes”
    So people will have time to make the most expensive coffee in the world (:-))

  4. Keith Sago permalink
    November 25, 2017 11:13 am

    When the contract was officially signed the battery bank was half built already.Great publicity but South Australia has also bought two 120 Mw diesel generators plus a 360 MW gas generator.Bloody pelicans!!

  5. Joe Public permalink
    November 25, 2017 11:16 am

    For perspective – this 1st Aug 2017 report:

    “US giant APR Energy wins South Australia power plant bid”

    US firm APR Energy says it will be able to provide critical electricity grid stability to South Australia by December 1 after being chosen to supply a two-step fix for a fragile power grid with a new fast-start power plant initially powered by diesel fuel for the first two years.

    South Australian Premier Jay Weatherill announced on Tuesday the state government would buy nine new GE TM2500 aero-derivative turbines through APR Energy to deliver up to 276 megawatts of generation to the grid should extra power be needed.

    The individual turbines are transported on large trailers and will initially be installed at two sites in suburban Adelaide. One of them is the Holden car plant in the northern suburbs of Adelaide which is scheduled to close on October 20 when decades of car manufacturing will end. The other is at Lonsdale in the southern suburbs where a $1.8 billion desalination plant sits idle after being built in 2011 following a severe drought where the South Australian Government imposed water restrictions.

    The hybrid turbines will then shift to an un-named separate permanent location where they will run on gas. The South Australian Government had been investigating the use of temporary diesel-powered generators to help bolster its grid for this summer while a $360 million fast-start power station was constructed, but the two separate plans have now morphed into the one solution. But it is a fix-it plan heavy with irony because the new plant requires the use of diesel fuel for the first two years, and is being overseen by a state government which has trumpeted itself as a leader in renewable energy.

    [My bold]

    http://www.afr.com/business/energy/electricity/us-giant-apr-energy-wins-south-australia-power-plant-bid-20170801-gxmrzu

    • Nigel S permalink
      November 25, 2017 1:59 pm

      Good to know there are some grown-ups involved.

      • C. Paul Barreira permalink
        November 26, 2017 7:41 pm

        Not in South Australia, laddie. With great determination it has joined the otherwise-defunct second world. It is a failed state, utterly dependent upon other states for their taxation receipts and electricity generation. It’s education system is dead. It is a de facto one-party state; no political (nor any other) party offers any alternative to Labor’s dismal offerings. No questions permitted—and none proposed. As long as property prices remain buoyant, government (sic) is safe for nothing matters more to South Australians than property speculation.

      • duker permalink
        November 27, 2017 1:49 am

        And the electrcity consumption to run the desal plant ?

        ” 3.47 to 3.70 kilowatt-hours of electricity per kilolitre of water produced”

        Just as well the need for water in hot dry periods doesn’t coincide with the demand for electricity. ……. but wait

  6. Stonyground permalink
    November 25, 2017 11:35 am

    “I do see this as something that the world will look at as an example.”

    If it demonstrates how utterly impractical this kind of thing is then it might just about be worth the money.

  7. November 25, 2017 11:39 am

    I think Tesla did very well to “manufacture a 129MWh battery in Jamestown”. That’s not bad, starting from scratch.

    Musk needs all the cash he can get.
    https://www.thegwpf.com/tesla-is-set-to-run-out-of-cash-in-nine-months/

    • It doesn't add up... permalink
      November 25, 2017 1:36 pm

      He also seems to have chewed up all the Gigafactory output to supply it, at the expense of production of cars.

    • mikewaite permalink
      November 25, 2017 5:32 pm

      Manufacture the battery in Jamestown ?
      According to Clean Technica
      https://cleantechnica.com/2017/09/30/tesla-using-samsung-sdi-battery-cells-129-mwh-south-australia-facility/
      The battery cells were actually manufactured by Samsung , presumably not in Australia by Australian or US production workers :
      According to the article a few months ago :

      “Despite its close relationship with Panasonic, Tesla will actually be utilizing Samsung SDI lithium-ion battery cells at the facility in South Australia that’s now under construction, the company has revealed.”

      I am not denying that its installation is a credit to Musk’s managerial ability , but the profit from the venture will go offshore to the USA .
      Why cannot the Australians themselves purchase and install these facilities, training up a skilled workforce because clearly other States will be clamouring for one, if only for prestige rather than practical reasons.

      • C. Paul Barreira permalink
        November 26, 2017 7:44 pm

        In South Australia skills—so-called—are only relevant to the construction industry and then only to projects (housing especially) that will themselves produce nothing. South Australia genuflects to Al Gore. The cultural cringe is total.

  8. Roy permalink
    November 25, 2017 11:53 am

    And all this for a problem that should never have been allowed to happen. Madness, just sheer madness.

  9. Bloke down the pub permalink
    November 25, 2017 12:01 pm

    From my, admittedly poor, memory, when South Australia had a major blackout a while back, one of the problems was that there was not the necessary power available to restart the systems. This was why the blackout lasted so long. It is possible that this battery backup may serve a purpose, if it provides the juice needed to kick-start the rest of the grid after an outage.

  10. November 25, 2017 12:35 pm

    Reblogged this on ajmarciniak and commented:
    Elon Musk has managed to win a $50m bet by building the world’s largest ever lithium-ion battery.

    The billionaire chairman and chief executive of Tesla has delivered a renewable energy project for South Australia, building the world’s largest ever lithium-ion battery.

  11. November 25, 2017 12:47 pm

    In this day and age of advanced technology, it is simply amazing to see people calmly talking about blackouts and other power outages. People are being promised such wonderful occurrences.

    I just turned 73 and own and live on the property which my parents bought in 1937: 1880’s era house on 5 acres of an old farm. We had a coal furnace. In the ’50’s we replaced it with a gas furnace. All of my life, the only times we have lost power is due to storms taking lines down. NEVER have we had blackouts or brownouts, nor have they been predicted.

    This situation is just plain nuts when high level civilization is told they must return to life on the frontier. Why? Because a bunch of greenies want it? Because a bratty puppy wants fame and fortune? Perhaps someone should school them all in the process of building a battery. It is neither pretty nor “clean.” I have no plans to give up my reliable heat, electricity, my washer/dryer, dishwasher, or chest freezer. I will not resort to rubbing 2 sticks together to heat water for my morning coffee, Instead, I voted for Donald Trump and had a really wonderful birthday, November 9, 2016 followed by another great one this year. This was our version of “grabbing our pitchforks.”

  12. It doesn't add up... permalink
    November 25, 2017 1:51 pm

    In terms of the price of the battery per capita, the cost in the UK would equate to £1.4 billion. I don’t think even our climate obsessed government would attempt to get away with that.

    Don’t bet on it. The National Grid scenarios for the future assume something like 3GW of battery capacity to be used for grid stabilisation. They have a capacity output factor of about 3% in their scenarios, which I suppose you could double in the sense that the grid needs stabilisation for both under and over frequency (wind gusts, and wind lulls between gusts). 30x£37m is £1.11bn

    The main purpose of the Musk battery is grid stabilisation. It’s next to a 309MW wind farm, so it could only store about a third of its output for a little over an hour for time shifting to meet peak demand. In practice, the plan seems to be to have a target charge level of 70%, which could in theory be used to help meet shortages in extremis, but which otherwise allows for stabilisation for grid over- and under-frequencies as the wind gusts and subsides every few seconds.

  13. November 25, 2017 2:11 pm

    Summer heatwave wind power lulls in SA usually last for around 5 hours, inconveniently around the late afternoon peak demand time (hypothesis: this is the time when the vertical air motion in the Adelaide hills stops, before the hot air cools, descends and generates strong gully winds in the evening), so the battery, if it works properly, is merely a 20 MW peaking generator, nothing in comparison with the 220 MW diesel generators that have been installed without any fawning over Mr. Diesel.

    Wind power is shown in green in the following, from the 2016 Xmas heatwave:

  14. November 25, 2017 2:56 pm

    Town of Jamestown 1500, powers for 40 hours. With emergency reduction, 2+ days. Question: what is recharging time?

    With rechargeable batteries powering your town, the parameter of importance is charge rate vs drain rate. Could the solar/wind and battery system handle the town? If so, what is the battery life? As designed, what is the battery life? The replacement and annual maintenance costs?

    At 50 million, what would the costs be for a town solely using solar/wind and the battery?

    We now have an example! Deserves an economic assessment written up for the Jamestown newspaper.

    • It doesn't add up... permalink
      November 25, 2017 5:53 pm

      The information I have is:

      Of the 100MW/129MWh in this array, around 70MW of capacity is contracted to the South Australian government to provide grid stability and system security. It will likely mostly provide frequency and ancillary services (FCAS) when needed (such as a major system fault, generator trip or transmission failure).

      This part of the battery is designed to last 10 minutes, which sounds short but is long enough to keep the grid stable while slower machines such as gas generators can respond.

      The other 30MW of capacity will have three hours storage, and will be used as load shifting by Neoen for the Hornsdale wind farm, where it will be located.

      the batteries carry guarantees for 15 years, although these guarantee contracts allow for some level of degradation each year. So, for instance, after 15 years, the batteries may only be operating at around 60-65 per cent of their initial rates capacity, so will then be replaced by newer, more efficient and cheaper equipment.

      There is a suggestion that $50m might only cover that portion of the battery contracted to the government, which might therefore be 70×10/60MWh or about 12MWh of the 129MWh capacity, or 70MW out of 100MW or anywhere in between. Of course, you will notice that the figures don’t quite add up…

  15. Sheri permalink
    November 25, 2017 3:02 pm

    At the per capita cost of the battery, one could have provided people with their own personal backup generators that ran on gasoline or propane, whatever works best, and they would actually have had backup power. Paying Musk to build a huge, worthless battery? As I say, “nothing says ‘we hate you’ like wind power”. It’s a stab in the eye from your elected officials, that you keep electing. There must be a massive dose of masochism going around.

  16. Curious George permalink
    November 25, 2017 3:21 pm

    “If we don’t deliver on time, it is free.” They delivered on time, so it is not free. How were poor South Australians conned out of the purchase price?

  17. bushwalker permalink
    November 25, 2017 4:07 pm

    “The battery will store energy from a nearby wind farm run by the French renewable energy company Neoen.”

    It’s never been clear to me just what that means.
    (1) the windfarm just happens to be near the battery site and both are connected to the grid and the battery owner buys power on market
    (2) there is direct cabling plus electronics from the windfarm to charge the battery
    (3) the battery owner has a contract to take a certain amount of power from the windfarm via the grid

    • It doesn't add up... permalink
      November 25, 2017 6:03 pm

      As I read it, the wind farm owner can store/draw up to 30MW at its option to a maximum of 90MWh capacity. They have the option to buy power from the grid if there is spare battery capacity they can charge but the wind farm production is inadequate to charge it. Obviously the basic idea is to store when power is cheap and release when it is expensive, but there will be energy losses along the way in the inverters. The main trick here will be to try to fill and empty this section of capacity as often as possible when it is economic. Perhaps they hope to recharge overnight from wind, sell to the morning rush hour, recharge at midday from excess solar that cuts grid demand, and sell to the evening rush hour: hence why they have a 3 hour charge time and discharge time.

  18. BLACK PEARL permalink
    November 25, 2017 6:11 pm

    Will they be using fossil fuel to initially charge the batteries ?

  19. Gamecock permalink
    November 27, 2017 2:11 pm

    “It’s immoral to let a sucker keep his money.”

    SA is an easy target.

  20. Tom O permalink
    November 27, 2017 3:56 pm

    $50 million. Interesting. and how long, exactly, is the average life span of a lithium ion battery? We know wind turbines are about 25 years, solar panels run 30 years, maybe, but how long will this battery be serviceable, especially if it is never drawn down except occasionally? And I am glad that it is a collection of smaller batteries since smaller batteries can fail and be replaced more easily than 1 single battery.

Trackbacks

  1. Elon Musk Cons South Australia out of $50 million | Persons News

Comments are closed.

%d bloggers like this: