Elon Musk plays high-stakes power poker with Australia. Weatherill, Turnbull, lets go all-in

    Elon Musk says Tesla Energy is ready to help South Australia with their energy issues. After recent blackouts, the state’s agressive plan to switch to renewable energy has come under pressure. While the issue has been heavily politicised, today things took a turn for the better.

    Mike Cannon-Brookes is the co-founder of one of Australia’s biggest international success stories, the software development company Atlassian. After reading and clearly being impressed by the AFR story with Tesla, Cannon-Brookes headed to Twitter to ask Musk if he’d stand by the claims that Tesla could fix the SA power problems, not in 5-10 years, but in less than 100 days. Musk replied.

    So confident is Musk, that he’s prepared for a high-stakes game of poker with millions of dollars on the line, Musk replies that if Tesla don’t have it installed and working within 100 days of a signed contract, the whole thing’s free.

    That response now has the world watching.

    The Premiere of South Australian, Jay Weatherill you just got the opportunity of his career. Seriously stop whatever you’re working on, if you can find a way to make this happen, you not only get to say your renewables was right, but finding a way to fund the project means you can get the world to watch, as you implement a renewable energy plan with Tesla batteries to store power, and kill the arguments of those against solar investment. The business community will love you as they can regain faith in the power infrastructure and cease their spend of power redundancy like backup generators.

    Recently Tesla has promoted other installations of the technology from around the globe, like the Powerpack Installation at Southern California Edison Substation which was done in 96 days and contained 396 Tesla PowerPacks and generated between 20 and 80MwH. This powers up to 15,000 homes for 4 hours, but importantly is dynamic enough to power 2,500 home for 24 hours if needed.

    There’s also the Tesla Powerpacks + Solar that power the entire island of Kauai, Hawaii. The 52MwH system stores power from 54,978 solar panels in 272 PowerPacks, on a continent that is bathed in sunlight, much like Australia.

    When the blackouts occurred, our politicians failed us, pointing fingers at each other, rather than doing their homework to find a solution. When you understand the technology is available now and is being implemented around the globe, we just need the will to do it and be creative in funding it.

    Tesla’s VP for energy products, Lyndon Rive said he would commit to installing between 100-300 MwH of PowerPacks, their commercial version of the PowerWall, that SA would need to prevent future blackouts. Australia may well be Tesla’s biggest customer.

    Talk of an order that large obviously raises questions about the ability of Tesla to provide it.

    “We don’t have 300MWh sitting there ready to go but I’ll make sure there are,” Mr Rive said.

    Of course this was the motivator for Cannon-Brookes’ question to Tesla Founder and CEO, Elon Musk. So confident in his teams ability to produce batteries from their newly opened Gigafactory, Musk committed to deliver the product in 100 days or we get it for free. Is he crazy? No. It’s likely he’s acutely aware of the ramp up in production that’s occurring and knows that delivering up to 375% increase in capacity in essentially the same timeframe as the Southern California project.

    As the conversation between Musk and Cannon-Brookes continued, it actually revealed a lot more about Telsa’s costs and market position with PowerPack. Goals aside, infrastructure is only achieved when it can be paid for, so the question becomes, what’s the price of a massive Tesla Energy solution for South Australia ? Cannon-Brookes pushed Musk for an answer, which he happily provided, going public with a price that until no had remained a privately negotiated number.

    A Tesla PowerPack cost is around $250/kWh for 100MWh+ systems. Musk goes on to say, they’re moving to a fixed and open pricing model for all products. This demonstrates a confidence with the product and allows potential buyers to calculate purchase costs and basically start saving now.

    As with most things, there’s not just the raw cost of the product, there’s also shipping (which for seriously heavy battery cabinets, won’t come cheap) and installation which Musk says is out of their control.

     While South Australia’s blackouts were a very public motivator to find a solution, a number of Australia’s coal-fired power stations are reaching their end-of-life and are being decommissioned. This means we need a solution more broadly, across our other states and territories.

    This means the Malcolm Turnbull’s Federal Government should also being invested and potentially an investor in the electricity solution that is battery storage. If they were serious they’d offer incentives for business to buy their own PowerPacks which would help electricity prices in business, as well as PowerWall products for the more than 1.5 Million homes that have roof-top solar in Australia. This also answer’s their problem with the rising cost of living and never ending power prices.

     Sometimes I think about what motivates people to go into politics, particularly when you’ve already had a successful career. The answer almost always comes to down legacy, that you want to make a difference in the world. I seriously can’t think of a better thing I’d want to be known for than accelerating the adoption curve of energy storage from the sun and allowing people and business to use power without being severely limited by the ongoing cost. Weartherill, Turnbull, please do the right thing and get this moving, if not, I suspect you’ll be remembered for the people that had this opportunity and blew it.

    Jason Cartwright
    Jason Cartwright
    Creator of techAU, Jason has spent the dozen+ years covering technology in Australia and around the world. Bringing a background in multimedia and passion for technology to the job, Cartwright delivers detailed product reviews, event coverage and industry news on a daily basis. Disclaimer: Tesla Shareholder from 20/01/2021

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