8 ms·

Judging from the article I think it's a proof of concept or similar stage.

benj111 8y ago
But its not like battery technology is advancing so quickly, and prices dropping so fast, that this is only just becoming profitable. Based on these figures this would have been profitable years ago. The only plausible reason I can come up with is that the 'savings' are very hard to attribute correctly, but then I still cant explain why no one before today noticed the potential savings and took a chance. Anyone with experience in the industry have any thoughts?
- codeulike 8y ago
  guess: Its a politics driven industry and no-one wanted to take the chance to try something that hadn't been tried anywhere else in the world at this scale before.
- gph 8y ago
  >But its not like battery technology is advancing so quickly, and prices dropping so fast, that this is only just becoming profitable I wonder if there was even the capability to manufacture such a large order at the given price point before Tesla built their gigafactory.
- chrisbrandow 8y ago
  Battery manufacturing is actually advancing fairly quickly. The costs has been dropping at a pretty steady, steep rate for last 15-20 years.
- cowsandmilk 8y ago
  (a) It takes several years to plan a project and then build it. So, this decision was made years ago, not "today". (b) Battery prices (and pricing for the balance of the system) have dropped pretty rapidly, I'm not sure why you're claiming otherwise. There have been recent years where these systems have dropped in price by ~25%[1]. That's not insignificant. [1] https://www.utilitydive.com/news/not-so-fast-battery-prices-will-continue-to-decrease-but-at-a-slower-pace/518776/ https://www.utilitydive.com/news/not-so-fast-battery-prices-...
  - benj111 8y ago
    By "that quickly" I was thinking orders of magnitude per year. This would have been competitive at 4 times the price. Depending on the details it might have been competitive at 10 times the (battery) price. Was the decision taken years ago? This is the 100 days or free battery. But yes I accept the power companies may have been slow. But still it isn't just Australia that was slow, its the US, Germany, Denmark, the world.
    - singhrac 8y ago
      He's right. Unless this was a media stunt for Elon's benefit (and it really doesn't look that way), the decision was made in a few days and the turnaround was 100 days: https://twitter.com/elonmusk/status/840032197637685249?s=20 https://twitter.com/elonmusk/status/840032197637685249?s=20
    - pixl97 8y ago
      >This would have been competitive at 4 times the price. Not exactly. Australia's high prices were not due to a technology failure, but a regulatory one. The power generators were manipulating the market causing extremely high peak prices, and essentially being allowed to get away with it. Most other countries don't allow the market to wildly fluctuate so much, so the payback is far longer. Think decades and not years.
      - benj111 8y ago
        4 * $66m = $264m / $40m = 6.5 ish years payback. Not many investments offer that rate of return. You may be right to suggest it may not be competitive in other locations though. I don't know.
  - ams6110 8y ago
    And (B) is an issue. It's essentially deflationary economics. Why spend money now when it will be cheaper/more profitable next year? Once pricing on batteries stabilizes, you'll probably see more people willing to commit to big battery projects.
- ajuc 8y ago
  I worked on software for trading energy/transfer/balancing capacity in EU market a few years ago. EU is pretty good in that regard, it demonopolized the energy market, so if you build this battery yourself on your land you can just entered the market and start selling balancing offers. You will easily outcompete traditional producers and consumers on that market if the article is right. The widespread rule of thumb was - batteries on grid level don't work. Seems this isn't true anymore.

But its not like battery technology is advancing so quickly, and prices dropping so fast, that this is only just becoming profitable. Based on these figures this would have been profitable years ago. The only plausible reason I can come up with is that the 'savings' are very hard to attribute correctly, but then I still cant explain why no one before today noticed the potential savings and took a chance. Anyone with experience in the industry have any thoughts?

codeulike 8y ago
guess: Its a politics driven industry and no-one wanted to take the chance to try something that hadn't been tried anywhere else in the world at this scale before.
gph 8y ago
>But its not like battery technology is advancing so quickly, and prices dropping so fast, that this is only just becoming profitable I wonder if there was even the capability to manufacture such a large order at the given price point before Tesla built their gigafactory.
chrisbrandow 8y ago
Battery manufacturing is actually advancing fairly quickly. The costs has been dropping at a pretty steady, steep rate for last 15-20 years.
cowsandmilk 8y ago
(a) It takes several years to plan a project and then build it. So, this decision was made years ago, not "today". (b) Battery prices (and pricing for the balance of the system) have dropped pretty rapidly, I'm not sure why you're claiming otherwise. There have been recent years where these systems have dropped in price by ~25%[1]. That's not insignificant. [1] https://www.utilitydive.com/news/not-so-fast-battery-prices-will-continue-to-decrease-but-at-a-slower-pace/518776/ https://www.utilitydive.com/news/not-so-fast-battery-prices-...
- benj111 8y ago
  By "that quickly" I was thinking orders of magnitude per year. This would have been competitive at 4 times the price. Depending on the details it might have been competitive at 10 times the (battery) price. Was the decision taken years ago? This is the 100 days or free battery. But yes I accept the power companies may have been slow. But still it isn't just Australia that was slow, its the US, Germany, Denmark, the world.
  - singhrac 8y ago
    He's right. Unless this was a media stunt for Elon's benefit (and it really doesn't look that way), the decision was made in a few days and the turnaround was 100 days: https://twitter.com/elonmusk/status/840032197637685249?s=20 https://twitter.com/elonmusk/status/840032197637685249?s=20
  - pixl97 8y ago
    >This would have been competitive at 4 times the price. Not exactly. Australia's high prices were not due to a technology failure, but a regulatory one. The power generators were manipulating the market causing extremely high peak prices, and essentially being allowed to get away with it. Most other countries don't allow the market to wildly fluctuate so much, so the payback is far longer. Think decades and not years.
    - benj111 8y ago
      4 * $66m = $264m / $40m = 6.5 ish years payback. Not many investments offer that rate of return. You may be right to suggest it may not be competitive in other locations though. I don't know.
- ams6110 8y ago
  And (B) is an issue. It's essentially deflationary economics. Why spend money now when it will be cheaper/more profitable next year? Once pricing on batteries stabilizes, you'll probably see more people willing to commit to big battery projects.
ajuc 8y ago
I worked on software for trading energy/transfer/balancing capacity in EU market a few years ago. EU is pretty good in that regard, it demonopolized the energy market, so if you build this battery yourself on your land you can just entered the market and start selling balancing offers. You will easily outcompete traditional producers and consumers on that market if the article is right. The widespread rule of thumb was - batteries on grid level don't work. Seems this isn't true anymore.