Australian leaders pledge funds for energy storage after billionaire Tweet bet

Late last week, Atlassian founder Mike Cannon-Brookes tweeted at fellow billionaire and Tesla CEO Elon Musk asking for details about Tesla’s Powerpacks. The Powerpacks are utility-grade lithium-ion battery installations that Tesla sells in addition to electric cars. Musk responded publicly with a price—$250 per kWh for a 100MWh installation, or $25 million (about $A33 million) before taxes and labor. The CEO added that he could install the system in 100 days or the batteries would be free.

The tweets preceded a flurry of activity from lawmakers at the state and federal level in Australia. On Saturday, Australian Prime Minister Malcolm Turnbull reportedly had a phone conversation with Musk and tweeted after the call, "Thanks @elonmusk for a great in depth discussion today about energy storage and its role in delivering affordable & reliable electricity."

Musk responded "You're most welcome. Very exciting to discuss the future of electricity. Renewables + storage arguably biggest disruption since DC to AC." Turnbull replied,

Thanks Elon. That's why I asked our clean energy finance agencies to focus on storage - vital now w generation more distributed & variable. https://t.co/T81Zi7CSo4

— Malcolm Turnbull (@TurnbullMalcolm) March 12, 2017

By Monday, Australian battery makers like Zen Energy, Carnegie Clean Energy, and Lyon Group reportedly said they could beat or match Tesla's offer on time or proximity.

Then on Tuesday, the South Australian government announced that it would dedicate $A510 million (~$391 million) to the production of a new gas-fired power plant as well as "Australia's largest battery," according to the Australian Broadcasting Corporation (ABC). South Australia has struggled throughout the summer with blackouts due to extreme weather and grid issues, and pressure has been mounting for leaders to do something.

The 250MW gas-fired plant would cost $A360 million ($276 million) and would be turned on in times of emergency, South Australian Premier Jay Weatherill said. Weatherill added that the private sector would build a 100MW battery system (the state government did not specify how long such an installation would run) with the help of a $A150 million ($115 million) renewable energy fund. About $A75 million ($58 million) of that fund would be grants, while the other half would be loans. The premier later clarified that battery installers would have to compete for access to the renewable fund, which could go to three separate winners or one winner. He added that South Australia would want the batteries in place by next summer.

At the same time, the government of the state of Victoria pledged to invest an extra $A20 million ($15 million) in either battery storage, pumped storage, or solar thermal storage schemes. That pledge was in addition to an earlier $A5 million pledge made in mid-February.

Pumped storage

Prime Minister Turnbull then announced on Thursday a $2 billion plan to expand the Snowy Hydro Scheme, a hydroelectric complex in the Snowy Mountains, by improving its pumped storage capabilities. The Snowy Hydro Scheme is co-owned by the Australian federal government, as well as the governments of New South Wales and Victoria. ABC said the Australian Renewable Energy Agency will head up the project, which could take years to complete. No new dams would be constructed, but new tunnels and power stations would be built to add up to 2GW to the current 4GW complex.

According to a press release by Snowy Hydro, the company hopes to begin a feasibility study soon to "explore the physical, technical, and environmental requirements for expansion of pumped hydro at sites across the Scheme."

In a press release from Turnbull's office, the prime minister threw shade at South Australia's proposed battery investment, saying of the proposed Snowy Hydro pumped storage expansion: "In one hour it could produce 20 times the 100Mwh expected from the battery proposed by the South Australian Government, but would deliver it constantly for almost a week (or 350,000 Mwh over seven days)."

But according to the Australian Financial Review, the bickering between politicians was unimportant. "Early indications from [South Australia] are that [Turnbull's] intervention has been popular with voters who just want the problems fixed and neither care about nor understand the National Electricity Market." For Cannon-Brookes, the point was the commitment to energy sources that reduce greenhouse gas emissions. "This is fantastic @TurnbullMalcolm!" the tech founder tweeted. "2GW (yes!) expansion of Snowy Hydro scheme. Smart & renewable. One to watch."

Listing image by SDG&E;