> It seems the system operator has been relying on reliability services provided by large synchronous generators without actually pricing and creating a market for those services, which has caused them to disappear with coal retirements and leave the power system in a chronically insecure state. In order for the market to ensure both day-ahead generation adequacy and as well as real-time operating reserve margin for unit contingencies, generators need to be able to get paid for providing those services, at a level that makes it economical to invest in new assets or maintain existing ones.

Aren't these frequency response services the same provided by Tesla's battery system at the Hornsdale Power Reserve? If so, those reliability services are paid for by the South Australian government. Additionally, the Hornsdale Power Reserve responds to frequency sags within milliseconds, whereas legacy thermal needs upwards of 15-20 minutes to raise the frequency or voltage back up.

> First, let’s recap on some of the important points. The Tesla big battery was built without subsidy, in a period of just 4.5 months from design to full operations, and at a cost of $91 million. If the figures available to date are any guide, it is making plenty of money ($24 million in revenue this year) and may deliver a payback to its owners of less than four years.

> Even better, it is delivering an even bigger market benefit for consumers ($40-$50 million in its first year) by lowering costs, particularly in the frequency control market, but also in wholesale price. Add in the value of grid security, and the avoidance of blackouts, and the savings are considerable.

> Tesla makes its money through a $4 million a year contract (for 10 years) with the South Australia government, and sets aside 90MW and 10MWh to provide grid security, mostly by intervening when major events happen.

So we build more batteries.

https://reneweconomy.com.au/deep-dive-into-first-year-of-tes...

https://www.windpowermonthly.com/article/1520406/hornsdale-b...