In March 2019, the Australian government gave the Energy Security Board (ESB) the task of advising on new designs for the national electricity market. In reports and a letter to the Energy Security Board, Tesla responded to an invitation by the ESB to give its input on the 2021 Options Paper, which was published in April 2021. In the letter, Tesla Energy’s Head of Energy Policy and Regulation, Emma Fagan, highlighted two points:
- Tesla is opposed to extending the life of oil and gas generators. Tesla especially highlighted the ESB’s goal of reducing emissions in energy production. “Tesla does not support the introduction of PRRO or any other mechanism to artificially extend the life of the existing thermal fleet of generation,” Fagan said in the letter.
- Tesla supports incentives for the development and implementation of new technologies that can support a more sustainable grid. “Tesla [Energy’s] mission is to accelerate the world’s transition to sustainable energy. In Australia, forward looking market design will be critical to achieving this outcome,” said Fagan.
Fagan proposed a “flexibility market” that could help to streamline the transition away from coal and toward other forms of energy. A special concern was the phasing out of coal plants without having the infrastructure and energy production capacity needed to replace them.
The risk of what Fagan described as “disorderly coal plant exits” was especially highlighted in a recent incident in which a coal-fired power plant exploded in Australia in May 2021. The loss of Callide Power Station in Queensland, Australia, caused a cascading effect that knocked out power for 470,000 customers. Luckily, a large Tesla Powerpack battery farm called the Hornsdale Power Reserve stepped in with its 150MW/194MWh system. The battery farm was able to respond in under two seconds because it was already ready to go when the power plant exploded.
In response to the incident, Monash University’s Dr. Behrooz Bahrani noted in a webinar that the incident highlights the need for grid operators to grow beyond the “We’ve always done it this way” mindset so that more robust and less risky energy production systems can be built.
“We need to go beyond synchronous generators. We need to think what else the batteries can do and not just focus on mimicking synchronous generators,” he said.
A white paper that Tesla Energy sent to the ESB referred to the incident highlighted the importance of integrating batteries capable of storing “clean” energy, like the Powerpacks, into the energy grid. The executive summary for the white paper highlights the importance of batteries for both reliability and system services on power grids that will increasingly rely on renewable energy sources like solar and wind. Tesla Energy made the case that batteries eliminate the need for synchronous assets in a low-cost, reliable, secure and zero emission grid.
Tesla Energy emphasized that Australia has an opportunity to get it right the first time when it comes to upgrading its power grid to allow for more sustainable energy sources.
“As the ESB progresses towards its final recommendations, it should use this rare window of opportunity for structural reform to be visionary and design a future-focused market that facilitates investment in new technologies,” said Fagan.
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