It’s a PR pitch too good to be true.

A global battery giant launches two new products in Australia, declaring one of those products could be the solution to a power crisis engulfing South Australia.

Within 48 hours, the global tech guru chief executive of said battery company pledges on social media to deliver a solution in 100 days, or provide it for free.

Social media goes nuts, as social media does. And before long, it seems South Australia’s unreliable power problems might be solved via a trans-Pacific Twitter deal between billionaires.

Politicians scramble for Elon Musk’s number, eager not to miss the opportunity to genuflect before a global tech deity with more Twitter followers than they could ever hope to match.

But before we all get carried away, it’s worth pointing out that Tesla’s fix for SA’s power problems probably won’t eventuate. Here’s why.

Tesla isn’t the only company proposing a battery fix

They don’t have the celebrity figurehead of Elon Musk, but there are already several companies proposing big battery solutions for South Australia. And some of their proposals are already well advanced.

Zen Energy, chaired by the Rudd government’s carbon-pricing tsar Ross Garnaut, has been working on plans for a battery storage of up to 150 megawatts (MW) at Port Augusta.

Lyon Solar wants to build 200-250 MW of large-scale batteries in several projects around the state.

And that’s just the start.

Tesla is late to the party

The South Australian Government has already dangled a sizable carrot to the power market to try to encourage both a new source of electricity generation and a new source of dispatchable renewable energy.

Last year, it issued a tender for supply of 75 per cent of the Government’s own electricity usage for a new market entrant, and another for the remaining 25 per cent to come from dispatchable renewables (batteries or another storage solution).

Those tenders have since closed, which means if the Government were to field offers from a new player — say Tesla — it could run into probity problems.

There is money for storage options from the Federal Government currently on the table, via the Australian Renewable Energy Agency.

But that brings us to the next problem.

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Polymers, such as plastic and synthetic textiles, are very useful technological commodities that have revolutionised daily life and industries. A research team from the National University of Singapore (NUS) has successfully pushed the frontier of polymer technology further by creating novel two-dimensional (2D) graphene-like polymer sheets.

In May of 2016, the US Representative from Silicon Valley, Mike Honda (D), introduced the Energy Storage for Grid Resilience and Modernization Act (H.R. 5350). In short, this bill extends the current 30% Renewable Energy Tax Credit (which was just extended last year) to energy storage technologies, not just the wind, solar, and geothermal power plants that feed electricity into the grid.

This bill would help accelerate deployment of energy storage that’s already underway, and that can play a pivotal role in the expansion of renewable energy.

Here are a few ways energy storage can help.

Balancing Supply and Demand

The big change wrought by renewables is flipping the grid, from a focus on providing electricity to match demand to making both supply and demand flexible. The following graphic illustrates. Among other technologies (like pumped hydro storage, or even fast-response natural gas power plants) batteries can respond instantly to gaps in supply or demand.

Providing Reliable, Quality Power

Batteries also provide an important service called “reactive power” that maintains the grid’s constant voltage. Since the motors and devices we use depend on a consistent voltage, and traditional power plants struggle to do this over long distances, distributed energy storage means higher quality and more reliable power.

Lowering Costs

For electric customers with their own storage system, it can help them reduce costs, sometimes significantly. For many customers, electricity prices are higher at certain times of day, and charging the battery when power is cheap and tapping into it when power is expensive — called arbitrage — can reduce the cost of electricity.

For commercial customers, it’s even more beneficial, since a portion of their electric bill is based upon their highest use in any hour of the month. If the battery (typically in concert with a solar array) can shave that peak, it can substantially reduce costs.

The graphic below, from an energy management company, shows how the battery storage system was able to change the company’s electricity use. The green line with the peaks was the old usage, the blue line represents the new usage with the storage system.

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Last week, we reported on Tesla’s Vice President of Energy products Lyndon Rive confirming that the company is in talks with local utilities to quickly deploy large-scale energy storage in Australia in order to address their current energy crisis.

CEO Elon Musk is now involved and they seem to have made progress over the weekend after talking with government officials.

As we discussed last week, Musk promised Tesla could deliver over 100 MWh of energy storage in 100 days or it would be free.

The executive has since discussed the project with Australian Prime Minister Malcolm Turnbull and with Jay Weatherill, Premier of South Australia, the state most affected by the energy crisis.

They appear to be seriously considering deploing energy storage at an unprecedented scale.

Musk tweeted about both conversations and representatives from both government officials said that they planned to keep the channels of discussion open.

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Massachusetts in 2015 announced a $10 million Energy Storage Initiative (ESI) to expand the state’s energy storage industry and infrastructure.

In the first phase, the Department of Energy Resources (DOER) conducted and produced a study, State of Charge, which found that the state could support as much as 600 MW of energy storage. The solicitation is the second phase of the ESI program, and it is designed to demonstrate the viability of storage in the state’s grid.

In addition, a bill signed into law in August set in motion the process for Massachusetts to adopt an energy storage mandate, making it the only the third state in the nation to do so.

The Massachusetts DOER is now crafting specific energy storage targets that are expected to be completed by July 2017 and could take effect as soon as January 2020.

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Swedish start-up Northvolt, which is run by two former Tesla Motors executives, plans to build a huge lithium-ion battery factory in the Nordic region, giving Tesla and Panasonic’s Nevada Gigafactory a close rival within Europe in terms of size.

The Stockholm-based company’s website reveals plans for what will be Europe’s largest battery factory, standing at more than 32GWh divided into four blocks of 8GWh capacity and needing more than €4 billion investment.

The site will require 500,000m2 of land – roughly equivalent to nine football pitches – but the firm is still looking for a suitable location with hopes for making a decision by the middle of the year. Northvolt claims the project will provide an opportunity to create an “industry cluster” for experts in energy storage and batteries.

The Nordic region has been chosen for its access to clean water and energy, stable grids and educated workforce. Perhaps more importantly, the area also holds some of the critical minerals needed for the battery technology.

Northvolt was founded by CEO Peter Carlsson, COO Paolo Cerruti, Carl-Erik Lagercrantz and Harald Mix. Both Carlsson and Cerruti previously served more than four years at Tesla Motors in executive positions, with roles in the supply chain at various points.

With cost still a major barrier to wider energy storage uptake, Northvolt plans to benefit from economies of scale and believes that the world has room and potential demand for another 100 to 150 factories of a similar scale.

It stated: “Until now cost has been too high for widespread adoption. We are now able to bring costs down.”

The batteries produced will be used in electric vehicles (EVs), although Northvolt’s website touts the uses of energy stroage in white goods and for integrating renewables to the grid. The firm is currently offering supply options to customers requiring more than 250MWh per annum.

Northvolt has received external funding the Swedish Energy Agency (Energimyndigheten), Vinnova, Innoenergy, Vattenfall and Stena.

Sending out an optimistic message to industry, the company website stated: “There are strong indications that when the cost of lithium-ion batteries drops below US$100/kWh, a number of user-sectors will reach an inflection point where traditional technology is no longer cheaper.”

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Microgrid revenue rose 29 percent from 2015 to 2016, reaching $6.8 billion globally, according to a report issued today by Advanced Energy Economy (AEE).

Prepared by Navigant Research, AEE’s 2017 Market Report also found that Asia Pacific led the microgrid market followed by North America.

In the United States, the microgrid market continued a five-year gallop upward. Microgrid revenue has more than doubled since 2011, reaching $2.2 billion in 2016, a 16 percent year-over-year increase from 2015 to 2016.

Energy storage, a smaller market than microgrids, made a bigger leap year-over-year. Revenue climbed 45 percent, making energy storage a $1.1 billion global market. In the U.S., the energy storage market reached $427 million, a 54 percent rise.

Charging infrastructure for plug-in electric vehicles proved to be another small, but fast growing market, rising 69 percent over 2015 to reach $864 million — a sevenfold increase compared to 2011. In the U.S. the charging market saw a 576 percent increase over five-years, reaching $182 million.

Microgrids and energy storage were the leaders for annual growth in their market segment, what AEE describes as electric delivery and management. The segment, which also includes smart grid, electric vehicle charging, and transmission and distribution, constitutes a $19 billion U.S. market and $99 billion global market.

Overall, however, electric delivery and management saw only anemic growth of three percent in the U.S., dragged down year-over-year by a fall in transmission investment (six percent) and distribution (13 percent.) Still, transmission produces the most revenue in the segment, $6.8 billion, down from $7.2 billion the previous year.

Advanced metering infrastructure also reduced the sector’s growth, with its four-year downward slope of 18 percent since 2012.

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AEG Power Solutions, a global provider of power supply systems and solutions for all types of critical and demanding applications, announces its latest version of their Protect SC. 600 Storage Converter, now with a new outdoor enclosure which reduces global installation costs and simplifies system usage, for any type of battery storage energy application, on or off-grid.

The Protect SC.600 bi-directional power converter from AEG Power Solutions with IGBT technology is based on their highly successful Protect PV solar inverter platform.

The core element of any battery energy storage system, the converter charges and discharges batteries to store or provide power according to the application requirement such as frequency control, peak shaving, energy shifting (temporary storage to re-inject power when maximizing profitability), or voltage control (often used to balance the voltage instability generated by integration of renewables in the grid).

Protect SC. 600 provides an outstanding conversion efficiency factor for both the charging and discharging phases. Thanks to its wide DC input range, it may be used with any state of the art battery technology currently available.

The enhanced Protect SC.600 version allows a seamless transition between off-grid and on-grid mode. This function is available as an option. This extends the battery energy system’s usage beyond its core functions, such as peak shaving for system back-up in the event of a grid blackout. This presents an additional benefit for any industrial or commercial customer who invests in battery systems primarily to decrease their energy costs and have an all-in-one installation that also integrates the security of their power supply.

This new option is a must when battery energy storage is used in remote areas or islands where grid reliability is uncertain or for full off-grid applications in similar geographies.

Protect SC. 600 can be easily implemented in a turnkey solution including batteries and medium voltage transformers. The new outdoor enclosure has been designed to house one Protect SC.600, an optional AC low voltage circuit breaker, a communication interface as well as an auxiliary power supply. The outdoor enclosure replaces the usage of containers whose weight and size make it difficult to transport and handle. With Protect SC.600, up to four units of the new outdoor system can be loaded onto a truck, and transported where on site, the complete units can be moved with a forklift truck replacing the need for heavy load cranes.

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Massachusetts released a much-awaited energy storage solicitation on Thursday offering up to $10 million for new projects.

Issued by the Massachusetts Clean Energy Center (MassCEC) and the Department of Energy Resources (DOER), the solicitation makes available $100,000 to $1.25 million in matching funds for each chosen project.

The solicitation springs from a state report issued last year that found Massachusetts could save electricity ratepayers $800 million by incorporating 600 MW of energy storage projects. The state plans to set a specific energy storage goal, now the subject of a separate proceeding before the DOER.

The state is offering money for projects that showcase examples of future storage deployment, help to grow the state’s energy storage economy, and contribute to the state’s clean energy innovation leadership.

MassCEC anticipates making about 10-15 awards. Applicants must supply at least 50 percent of total project cost.

The state plans to allot about half of the money from the energy storage solicitation to projects that include utility partners. Both distribution scale and behind-the-meter projects will be considered, but must be grid connected.

The solicitation seeks innovative business models that showcase the commercial value of energy storage in light of the specific local energy challenges and opportunities in Massachusetts.

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On Thursday morning, the Australian Financial Review published a story saying that Lyndon Rive, Tesla’s vice president for energy products, promised the company could deliver 100-300 MWh of storage to South Australia within 100 days of signing a contract.

Mike Cannon-Brookes, the billionaire behind software company Atlassian, saw the story and tweeted a link saying “Holy s#%t.” Cannon-Brookes then tweeted at Tesla CEO Elon Musk “How serious are you about this bet? If I can make the $ happen (& politics), can you guarantee the 100MW in 100 days?”

Musk responded in a tweet, “Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?”

“You’re on mate,” Cannon-Brookes responded. “Give me 7 days to try sort out politics & funding. DM me a quote for approx 100MW cost – mates rates!”

Early on, Tesla worked in private with companies to sort out pricing depending on the size of the contract. But last night, Musk publicly responded to Cannon-Brookes with rates. “$250/kWh at the pack level for 100MWh+ systems. Tesla is moving to fixed and open pricing and terms for all products,” Musk tweeted. The rate would bring the price of a 100MWh system to $25 million, excluding costs like labor and shipping.

That price was less than what Rive quoted in the Australian Financial Review—the VP estimated “large installations had come down to $US400-600 per kilowatt hour of capacity depending on the configuration, or about $US50 million ($A65 million) per 100MWh, with reductions for large scale installations.”

In the Australian Financial Review article, Rive had said that the quick turnaround would be possible because Tesla’s Nevada Gigafactory is ramping up production. The Gigafactory is where Tesla will produce large quantities of Lithium-ion batteries in partnership with Panasonic.

Tesla has been busy striking deals with utilities and grid managers. It announced the installation of a solar-panel-plus-battery system in Kauai this week and one in Southern California in January. The company, which primarily produces electric cars, has said it wants to partner with utilities rather than compete with them.

The grid situation is especially dire in South Australia, where several power outages and threats of power outages have caused concern. Australian news reports have blamed extreme weather, the closures of aging coal plants, the low price of gas, and the intermittency of renewables for causing the crisis. Battery companies like Tesla contend that energy storage could alleviate some of the pressure of peak load times and make renewables fit better on a heterogeneous grid. On Thursday, Rive said Tesla could offer a similar battery deal to the state of Victoria, where a 1600MW coal plant is set to close.

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