> The big gas generators – even though they have 10 times more capacity than is required – have systematically rorted the situation, sometimes charging up to $7m a day for a service that normally comes at one-tenth of the price.
> (You can read reports on how they do it here, here and here, and for a more detailed explanation at the bottom of this story.)
> The difference in January was that there is a new player in the market: Tesla. The company’s big battery, officially known as the Hornsdale Power Reserve, bid into the market to ensure that prices stayed reasonable, as predicted last year.
> Rather than jumping up to prices of around $11,500 and $14,000/MW, the bidding of the Tesla big battery – and, in a major new development, the adjoining Hornsdale windfarm – helped (after an initial spike) to keep them at around $270/MW.
> This saved several million dollars in FCAS charges, which are paid by other generators and big energy users, in a single day.
> And that’s not the only impact. According to state government’s advisor, Frontier Economics, the average price of FCAS fell by around 75% in December from the same month the previous year. Market players are delighted, and consumers should be too, because they will ultimately benefit.
Of course, just decent regulatory oversight can stop this kind of thing too, but fossil fuel producers seem to be really against that kind of thing for some reason.
https://www.theguardian.com/technology/2018/feb/06/how-tesla...
> The big gas generators – even though they have 10 times more capacity than is required – have systematically rorted the situation, sometimes charging up to $7m a day for a service that normally comes at one-tenth of the price.
> (You can read reports on how they do it here, here and here, and for a more detailed explanation at the bottom of this story.)
> The difference in January was that there is a new player in the market: Tesla. The company’s big battery, officially known as the Hornsdale Power Reserve, bid into the market to ensure that prices stayed reasonable, as predicted last year.
> Rather than jumping up to prices of around $11,500 and $14,000/MW, the bidding of the Tesla big battery – and, in a major new development, the adjoining Hornsdale windfarm – helped (after an initial spike) to keep them at around $270/MW.
> This saved several million dollars in FCAS charges, which are paid by other generators and big energy users, in a single day.
> And that’s not the only impact. According to state government’s advisor, Frontier Economics, the average price of FCAS fell by around 75% in December from the same month the previous year. Market players are delighted, and consumers should be too, because they will ultimately benefit.
Of course, just decent regulatory oversight can stop this kind of thing too, but fossil fuel producers seem to be really against that kind of thing for some reason.