Billionaire tech entrepreneur Elon Musk and South Australian Premier Jay Weatherill have spoken to each other about a proposal by Mr Musk to fix the state’s electricity woes with battery storage.
On Friday, Mr Musk said energy storage could solve the state’s electricity problems with a battery farm, and work could be completed within 100 days, or it would be free.
The idea appeared to gain the support of Australian Mike Cannon-Brookes, co-founder of software company Atlassian, who said on Twitter that if Mr Musk could guarantee 100MW in 100 days, he could “make the $ happen”, and offered “mates rates”.
Mr Weatherill said he was keen to discuss the matter further and was “certainly not ruling it out”.
“Today I had a positive discussion with Elon Musk regarding his battery proposal,” Mr Weatherill said.
Mr Musk also took to Twitter to confirm his conversation with the Premier.
“Just spoke with Jay Weatherill, Premier of South Australia. Very impressed. Govt is clearly committed to a smart, quick solution.”
Mr Cannon-Brookes replied to Mr Musk’s latest tweet with: “Wow, that escalated fast. Brilliant. SA led in delivering aggressive renewable targets and now being attacked for it.”
While it is not clear what an array in South Australia would cost, Tesla did deliver on a battery farm in Southern California, built using an array of 400 Powerpack 2 batteries.
Tony Wood, the energy program director for public think tank Grattan Institute, said Mr Musk’s idea should not be dismissed out of hand.
He said transitioning the energy network from its current state to where it needed to be would have a lot of challenges, and it was important not to write anything off.
In that process there’ll be some great ideas that will work and there’ll be some crazy ideas that don’t work and maybe some crazy ideas that do work.
“When you’ve got companies like Tesla and others who have a track record of delivering some interesting outcomes you would be crazy to write it off,” Mr Wood said.
“Now whether it then turns out to be a credible solution to a real problem I guess remains to be seen.”
South Australia suffered a statewide blackout last September, while during a recent heatwave customers were intentionally blacked out because there was not enough power to meet demand.
Mr Wood said the state’s high uptake of renewable energy, which has intermittent supply, had attracted the attention of many companies and testing battery storage was “clearly attractive”.
“Finding the right way for governments and their agencies to engage with proposals like this I think this going to be a tricky, challenging and worth doing,” he said.
But he did note the cost of such a proposal was “tricky” to predict.
Market operator rules ‘need to be changed’
South Australian Greens senator Sarah Hanson-Young said the party had already had “exchanges with people involved with the proposition”.
“We know that we need a game-changer here in South Australia, and we know that battery technology offers that solution,” she said.
“It is just making sure we can get the rules set in a way that maximises battery storage, being able to offer that solution and with the backing of some amazing people like Elon Musk and Mike Cannon-Brookes, I think we can make it happen.
I think it is a very, very exciting prospect and I’ve been on the phone and on the emails this morning, trying to work out how we can deliver that here in South Australia.”
Senator Hanson-Young said the first hurdle the proposition faced was changing rules set by the market operator, which prevented battery storage options from being competitive in the electricity market.
“The way the spot market works and way the electricity market is currently structured means that battery storage just can’t compete at the same level.”
Private sector should stump up cash, not Government
State Opposition Leader Stephen Marshall urged the Government to give Mr Musk’s proposal serious consideration.
“It’s the sort of thing we need to be looking at to secure the stability of our grid here in South Australia and also how we can lower energy prices in this state,” Mr Marshall said.
On Friday, SA’s Energy Minister Tom Koutsantonis said the State Government was “up for the discussion”, but said the private sector should put up the cash.
Mr Wood agreed.
“I would hope there’s no suggestion that the Government would put any money into a project, why should they?” Mr Wood said.
Why wouldn’t the private sector find a way?”
“Often we hear that we’ve [companies] got a great solution and all I need is some government subsidy.”
The SA Government has flagged its own “dramatic” intervention to the power crisis in coming weeks, and has explicitly not ruled out re-nationalising parts of the privatised system.