Tesla mega battery

5 things Tesla’s mega-battery tells us about the energy sector

Elon Musk's mega-battery in South Australia has thrown down the gauntlet to traditional energy players.
Published: Wed 10 Jan 2018

Tesla’s mega-battery in South Australia was not only a significant achievement in scale and speed, but also in digital marketing. We look at five things the Tesla deal tells us about the energy sector today.

1. The energy sector can move quicker 

It took an outsider to prove that energy projects can move quickly. Musk promised the mega-battery in 100 days and delivered it in 63. 

In an industry known for a slow and considered approach, the idea of moving at great pace can be alluring, especially for under-fire politicians like South Australia Premier Jay Weatherill who was able to say; 

"South Australia is now leading the world in dispatchable renewable energy, delivered to homes and businesses 24/7." 

Traditional players have taken note.

2. Social marketing works in the energy sector

It wasn’t a costly marketing campaign. A few tweets between Musk and fellow entrepreneur Mike Cannon-Brookes, a $50 m bet, and the rest is history. 

If reports that Tesla is burning through $8,000 a minute are true, such marketing shortcuts are not only achingly hip but also financially savvy. 

Would a traditional energy company conduct its business like this? You bet they wouldn’t.

3. Energy industry is ripe for disruption

Despite most reports describing Tesla as an ‘automotive company’, they are also an energy company in equal measure. Even their annual report says so: 

“We are the world’s only vertically integrated energy company, offering end-to-end clean energy products, including generation, storage and consumption."

If, as many believe, developing new battery technologies to sustain the demand of energy storage is one of the greatest scientific and societal challenges of the century, then disruptors like Tesla are much needed. 

After the frontrunners, demand will prompt innovation.

4. There is a new economics of battery storage

According to Bloomberg New Energy Finance, developers announced lithium-ion battery projects with total capacity of 1,650 megawatts per hour in 2017, four times that of 2016.

It’s little wonder that the price of Lithium has more than doubled in the past year and is up 200% since the start of 2015, according to Benchmark Mineral Intelligence. 

Good news for Chile, who have over 50% of the world’s lithium reserves. 

We’re sure you won’t need to read this article in Nature to know that Lithium is the 25th most abundant element. That’s not prohibitively rare, but its sustainability is questionable. 

And so, whilst lithium ion is winning the battery race today, alternatives are on the horizon.

Most notable among them is graphene, either within the battery or as the energy storage medium itself (as in a ‘supercapacitor’).

5. Mega storage can harness renewables  

Even though the Tesla mega-battery in South Australia is largely a back-up, it’s fair to say that energy storage is now a commercially viable solution to the intermittency challenge of renewables. 

Now projects of utility-scale are proven (Musk’s lithium ion battery is reportedly three times more powerful than any other system on Earth), they will provide a model for all utilities to optimize their use of renewables. 

And as you probably heard, South Korea's Hyundai Electric & Energy Systems is currently building a mega battery 50% larger than Musk's. The company has announced that the mega industrial energy storage system (ESS) has been ordered by Korea Zinc at a cost of $45 million.

Game on.