March 11 2017 - 11:54PM

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Is Elon Musk's tweet the answer? Experts are divided

James Robertson
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Has the answer to South Australia's energy future been found by two billionaires making a $100-million bet on Twitter? It mightn't be so simple.

Tesla founder Elon Musk has captured national attention with a promise his company could build a massive 100 megawatt/hour battery storage facility in blackout-plagued South Australia in less than 100 days, or at no charge.

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Tesla batteries: Australia's energy future?

The company's battery boss says SA's power woes can be solved in 100 days while launching Powerwall 2 units for households in Australia.

That followed urging from the Australian co-founder of software company Atlassian, Mike Cannon-Brookes, who tweeted he would try to make "the $ […] & politics" happen.

Lyndon & @elonmusk - how serious are you about this bet? If I can make the $ happen (& politics), can you guarantee the 100MW in 100 days? https://t.co/av38xcizNo
— Mike Cannon-Brookes (@mcannonbrookes) March 9, 2017

Those tweets have already set discussions in motion. Mr Musk said he was "very impressed" following a phone call with South Australian Premier Jay Weatherill on Saturday afternoon; the Premier called the discussion "positive".

But experts are divided about whether Tesla is really the answer.

"This would make a very, very, very big difference to the interruptions South Australia has experienced," said Andrew Stock, of the Climate Institute.

Mr Stock points to modelling that suggests many of the state's interruptions, including a state-wide September blackout caused by a storm, could have been prevented by additional battery storage.

Other experts are less sanguine about Mr Musk's idea.

"Obviously more storage would help, but saying it would solve South Australia's problem is a big call," said Tony Wood, director of the energy program at the Grattan Institute. "Would they have helped Adelaide get through three or four hours? Maybe.

"The real challenge is how much is it going to cost, who's going to pay for it and how".

South Australia's government recently announced plans for a "dramatic" solution to the state's energy crisis, expected to be delivered in coming weeks. Since then it's been flooded with suggestions including withdrawing from the national market for electricity or nationalising the state's electricity system.

It is also understood to have received a range of proposals from Australian and international competitors to Tesla to build battery storage systems.

Mr Musk says that the cost of building a 100 megawatt hour storage system would be $33 million ($US25 million). It's not known how much installation, shipping and other fees would add to that price tag and a facility with up to three times that capacity has been mooted, putting the cost at over $100 million.

But Mr Wood says the government itself funding or subsidising the plant would be a "retrograde step… very tricky and potentially dangerous".

But battery technology advocates, including Professor Ross Garnaut, say the national electricity market discriminates against battery power, providing a disincentive to investors.

The Australian Energy Market Operator, the body that runs the national electricity market, settles bids for power in half-hour lots. Experts say that discriminates against batteries which provide short bursts of power very quickly. A change is under consideration by regulators but a ruling is not expected until July.

Mr Wood notes that batteries offer many potential benefits including relieving companies of the need to invest heavily in electricity infrastructure that is maxed out only a few days a year – a problem known as "gold plating".

But he says Australian energy companies are also trialling alternative means of storage including "pumped hydro", a method singled out by Prime Minister Malcolm Turnbull in a recent speech. That involves running water uphill when demand for power is low and releasing it when demand peaks, allowing extra power to be generated from hydroelectricity.

"Batteries have got a really complex future," he said. "No one, including Tesla, knows where it's all going to land".

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