With my limited understanding of the Australian energy market, the system 'saved' $40M across the Australian energy market, it didn't generate $40M in income for the system operators.

ie by being a fast peaker supply, it stopped spikes in energy prices across the Aust Energy market which is where the savings of $40M come from.

If you consider Australia as a whole, did it save anything? That is, did it simply save the Australian state of South Australia $40 million they would have spent on the spot market, but entirely at the expense of other entities in the Australian market that would have otherwise sold it the electricity?

Not that there is anything wrong with that - it still makes total sense for SA to deploy such a system in that case, but it's very different than say saving $40 million in fuel costs due to not spinning up short-term natgas generators or something.

Short version: the Australian energy market is a mess and was being gamed by a small (2 or 3) number of operators of gas peaking plants who were driving the spot price up to several orders of magnitude higher than normal wholesale prices. The battery by simply existing cut the ability of these operators to game the market as heavily, because they could only bid up to the floor price the state government had set for the battery to bid in at.

This is direct state interference in a competitive market so the “floor” is still quite high. With more private operators entering the market the ability to game the system will be eroded further since everyone wants to get the easy money.

The savings were mostly due to cutting the fat out of the market gouging practices. No/little change to actual supply occurred.

Your point is valid, the 40M would have went elsewhere in the market. I still think it's arguably better to not be wasting fuel and contributing pollution, and that preventing the disproportionate flow of money from utility consumers to operators is a side benefit... but that's debatable and a very socialist opinion.

There's nothing socialist about squeezing inefficiencies out of a market. It's what well functioning markets are for, after all. From what I understand the Australian energy market is a long way from well functioning, with a few small players holding the system to ransom.

Socialism would be hitting those guys with a big regulatory stick, or shutting them down for just providing a service. Not all state expenditure is socialist. Were monarchies involving heavy state domination of the economy socialist? No, and neither necessarily are liberal democracies with a state sector, especially if that state sector is exposed to market forces.

It's really annoying that so many mentions of socialism or capitalism on HN get the basics wrong. These terms have perfectly good established meanings that are actually quite specific.

The only inefficiency is that they're burning a consumable to provide the electricity during peak. The rest (likely a good part of the that 40M) is going back into the economy in one way or another (construction of the peaking plants, operators margins, jobs, suppliers of consumables, taxes on consumables, taxes on profits, etc) - provided that those funds don't leave the country it should be very near to a net neutral cash flow for the local economy, only that the battery keeps more in the consumers pockets vs the utilities', hence my socialist comment - moving money from corporations to consumers. If you consider that the energy for the battery ultimately comes from the same grid, and that grid is not entirely renewable, then it's power in all probability also consumed some fuels (70% of Australia's power comes from coal I think).

So: Australia is sunny and it's consumption peaks generally follow the temperature due to air conditioning - so build more solar and pair it with more storage (batteries) instead of investing in coal and gas burning.

> hence my socialist comment - moving money from corporations to consumers.

Thats is such a bizarre comment. No corporation has a right to make money, they have to earn it by providing a valuable service. If that service can be provided more efficiently another way, tough. That's what market forces are all about.

Yes the energy company commissioning the battery is publicly owned. You could squint and see some socialism in that. I've no argument there. However it's doing this because it is exposed to market forces, and overspending on peak power provision. Characterising responding to that market stimulus with capital investment is I think going a step too far.

Look at it another way. Is exposing public companies to market forces and having them react to those stimuli more socialist than protecting them from markets, or less socialist? Is it closer to pure capitalism or further away?

How is wanting to save your citizens money debatable?

South Australia's energy grid is a very exceptional case, due to a very jarring transition to renewables. I would not expect the same level of returns in other areas.

None of the problems in the SA grid have been due to renewables.

The problems have been interconnects failing, poorly maintained transmission lines failing, the market operator placing restrictions on renewables which meant that renewables were not allowed to try to keep the lights on, and reliance of SA on electricity imported from unreliable interstate supply (aka coal thermal plants that break down or simply fail due to high ambient temperatures).

All of SA’s energy problems are due to poor regulation, poor market operation, poor maintenance, Federal interference, market gaming by fossil fuel operators, and unreliable coal plants.

There will be similar returns possible for other batteries in NSW (a net importer, thus highly vulnerable to gaming of the market) and QLD with a large installed base of unreliable coal which means increasing need for ancillary services.

Coal is not reliable to start with, and the plant currently in use is old and getting to the point of being no longer economically viable. NSW and QLD grids will need significant support services as they transition from unreliable coal to dependable (but intermittent) renewables.

It's worth noting that the major recent failures of the grid across south-eastern Australia have been due to 1) tornados taking down the interconnector between Victoria and SA (a failure which the conservative government blamed on renewables), and 2) regular failures from the decrepit old coal power plants.

While the transition to renewables has indeed been rapid and jarring, that's not what has caused problems.

The renewables were definitely a factor in the SA blackout.

https://www.aemo.com.au/-/media/Files/Electricity/NEM/Market...

Failure of a meshed power system cannot be attributed to the failure of any single sub-system. Rather it must be a combination of factors including those you just mentioned.

The dependence of the power system on renewables (specifically wind farms)contributed in two ways to the blackout:

1. The majority of wind turbines provide little or no system inertia. By displacing synchronous generation with wind generation, system inertia is reduced which results in greater ROCOF during an event where there is a change in active power demand/supply. In the SA blackout, fast ROCOF overwhelmed the system's last line of defence- under frequency load shedding.

2. Some wind turbines contained a fault ride-through setting which AEMO was apparently not aware of prior to the blackout. Specifically, the setting caused the turbines to disconnect after experiencing a sequence of voltage excursions within a set time period. The disconnection caused a loss of active power supply to the grid which contributed to the drop in frequency and eventual collapse.

I think bmon just meant that renewables have more daily peaks than coal or nuclear, so they create more opportunities for battery savings relative to traditional fast start generation.

More peaks doesn't mean worse all things considered, it isn't a critique, it's just saying that battery viability is highly contingent on local power mix.