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Originally Posted by Truenorth00
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The battery made most of its money from the collapse of reliability and lack of reserve in the Australian system, caused by the retirement of old coal plants and trying to foolishly replace them with unreliable solar and wind.
In 2014 and 2015 when Australia still had some reserve of reliable generation, FCAS costs was about $20M/year. The last two years (when the battery was active), it has skyrocketed to nearly $200M/year as Australia faces emergencies every time it gets hot in the summer, forcing it to activate desperate measures such as diesel generators.
https://www.aer.gov.au/wholesale-mar...ts-by-services
Analysis so far shows the battery doesn't make much money off peaking and arbitrage:
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As highlighted in the image, the battery earns revenue from energy market arbitrage on a “buy low, sell high” strategy. In simple terms (i.e. without going down the path of exploring revenue from derivatives) this is the underlying way that all storage facilities need to earn money in the energy market – because they do not, in-and-of-themselves generate energy.
Understanding that this battery has paid something between $200,000 and $400,000 each month to charge the battery – and yet rarely earned $500,000 in a month to discharge should help to reinforce the challenges in making this type of business model pay for a large capital investment….
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http://www.wattclarity.com.au/articl...about-storage/
That's probably in part due to its large two-way losses:
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Like I said economics will drive this change. They've long favoured oil and gas. But that is changing and individuals, companies and governments are reacting accordingly.
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Dumb governments have been driving this change, it'll last only until electricity systems start collapsing or people are no longer willing to pay 30, 40c/kWh electricity like they do in Germany, Australia, California.