(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-...

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.

>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.

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.

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

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.

First off you don't know its going to fall next year. 2nd someone may sign a contract first.

The old sunk cost fallacy strikes again. You invest today because by not investing you forego the savings in the mean time. That something would be cheaper next year is not a factor, only the current expected ROI.

The sunk cost fallacy is most often stated as, it isn't worth getting rid of something because you've already spent the money on it. Its unclear to me if this is an example of that. I agree with your general thrust though.

Yeah, this is more of a reverse sunk-cost. If there is a term for that I don't know it.

(a) didn't take that long

https://www.greentechmedia.com/articles/read/tesla-fulfills-...

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

I wonder if there was even the capability to manufacture such a large order at the given price point before Tesla built their gigafactory.

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.

Battery manufacturing is actually advancing fairly quickly. The costs has been dropping at a pretty steady, steep rate for last 15-20 years.