How Businesses are Responding to the Climate Challenge
Spare a thought for the poor residents of South Australia. Sure, they may have a stunning coastline, year-round sunshine and enough great wine to sink a battleship (half of all Australian wine is produced in South Australia). Yet, somehow, this first-world state is experiencing energy infrastructure issues that are more likely to be seen in third-world nations.
A series of high profile blackouts, power station closures, and a lack of investment has culminated most recently (June 2017) in South Australia, overtaking Denmark as having the world's most expensive electricity prices.
Enter, stage right: global entrepreneur and billionaire, Elon Musk, CEO of Tesla.
Back in March 2017, Musk made a bet on Twitter with Australia’s very own tech billionaire, Mike Cannon-Brookes, that Tesla could deliver enough renewable electricity storage within 100 days (yes, just 100 days) of contract signature to help prevent future blackouts in South Australia. If Tesla couldn’t fulfil its promise, Musk promised to swallow the cost as a forfeit (which he stated could be somewhere north of $50m).
The bet is now in play with the South Australian State Government having awarded Tesla the tender to proceed as part of a raft of measures to solve their dire energy situation. Scheduled for completion in December 2017 alongside a new wind farm, the 100MW battery storage facility will be the largest system of its type in the world, capable of storing enough 100% renewable electricity to power 4,000 homes for a full 24 hours in a blackout situation or help stabilise the grid for 300,000 homes across the state.
Is your business prepared for a South Australian meltdown?
We may not have experienced South Australia style blackouts in the UK since the 1970’s, but our energy infrastructure remains a fragile beast. Your organisation may already be self-generating as a way of reducing your reliance on the grid (over 10% of UK businesses already are, according to an FSB study). And, coincidentally, it’s also a very handy way of reducing your carbon emissions and saving costs in the long term. But the ability to store the electricity you generate takes things to a different level, meaning you’ll always have an energy reserve you can rely on when you need it most. Simply put, battery storage can give your organisation invaluable energy security.
Storage can help protect your organisation from volatile energy prices, too. Just as in South Australia, electricity price hikes remain a constant risk in the UK given the number of elements that have an impact on our costs (from transportation and taxes to wholesale electricity costs). To give you an idea of just how expensive electricity is, the average prices for small, medium and large business users in the UK are currently the 5th most expensive among the 28 EU countries (source: Department for Business, Energy & Industrial Strategy). However, by combining battery storage with a bespoke tariff that provides different price bands at different times of day, you can store electricity when prices are low and then self-supply when prices are high (e.g., weekdays 4pm-7pm).
The huge investment that has been poured into battery storage development, testing and trialling over the last few years means there is increased global confidence and excitement surrounding the technology as a commercially viable answer to grid fluctuations, price hikes and much more.
So, where does this leave your business? The good news is, it’s easy to upgrade to a cleaner, greener, more reliable and self-reliant model of energy consumption. One where your organisation gets to take more control over its energy usage and take practical steps to avoid the uncertainties of rising prices and power outages. In other words, it’s time to get some battery power.
Mr Musk’s $50m wager on Tesla delivering its 100-day implementation challenge is a very bold advertisement for the growing confidence in battery storage solutions worldwide. If the fortunes of an entire state can be transformed by the technology, imagine what it could do for your business. In betting terms, we’d say it’s a sure thing.