Tesla CEO Elon Musk was interviewed by Australia’s 60 Minutes about the country’s current power crisis and Tesla’s effort to help solve the issues with energy storage.
The California-based automaker/energy company is now caught up in what is being described as a “high-stakes political power play” over Australia’s power industry, which led to significant electricity rate increases that are putting pressure on families.
Musk vowed that Tesla will “work harder” to help solve the problem.
Australia is under “an energy poverty situation” which is leading to unstable power and high electricity rates.
On average, the country has one of the highest cost of electricity among developed countries and certain regions are breaking records. For example, South Australian households are paying the highest prices in the world at 47.13¢ per kWh.
That’s where Tesla is building its giant battery project – more precisely at Neoen’s Hornsdale Wind Farm near Jamestown, South Australia.
But several other Australian states (in red) are also plagued by high electricity rates:
According to the 60 Minutes episode (embedded below), it has led to record number of late bills and disconnections, which results in some low-income families having to choose between power and food.
Musk was surprised by the problem:
“Australia has so many natural resources that even if you go the fossil fuel route electricity should be cheap.”
He became emotional when presented with this growing problem affecting families. He responded:
“I didn’t expect that… We’ll work harder”
Here’s the relevant part of the interview:
Tesla CEO’s solution is to combine energy storage with local renewable energy production:
“Australia is actually perfect for solar power because it’s not too far north or too far south. You can have the entire country being solar powered – or some combination of wind, solar, geothermal and hydro.”
He even talks of exporting renewable energy from Australia to Asia.
But the current local energy industry is part of a political battle at the federal and state levels.
Josh Frydenberg, Australia’s Minister of Environment and Energy and member of the Liberal Party, blamed the situation on the Labor Party’s politics. His party introduced a new plan of “guaranteed power” which is presented as aiming to stabilize the grid and lower energy costs.
The plan is being criticized for not being ambitious enough and still too focused on fossil fuels. It is expected to reduce annual energy costs for just over $100 per household.
The government has been critical of Tesla’s battery system in South Australia – referring to it as no more than a tourist attraction and mocking its capacity.
To be fair, while the system is truly the most powerful battery on earth with a capacity of 100 MW, it is indeed not nearly enough to solve the country’s nor the state’s energy problems.
But Musk sees it as a shining example of what can be done to combine renewable energy and storage. He expects that more utility-scale energy storage systems will be deployed combined with residential battery packs, like Tesla’s Powerwall, which is already popular in Australia.