Powering New Zealand’s Future: A Giant Battery to Transform Our Energy Landscape
By Cindy Wang
Wellington-based Master’s student from Shanghai
Passionate about green energy and innovation
September 10th, 2024| 10min
New Zealand is charging ahead toward a low-emission future, thanks to an ambitious new project by Contact Energy and Tesla. According to the New Zealand Herald the two large companies are collaborating to build a massive 100 MW battery storage system in Glenbrook, near Auckland. Contact Energy claims this system will provide enough power to meet the electricity demand of 44,000 homes for more than two hours. This initiative is a significant step toward New Zealand’s goal of achieving net-zero emissions by 2050. While this is a promising development, there are still uncertainties in many aspects and what does this Megapack mean for everyday New Zealanders? Let’s break it down.
Why Energy Storage is a Game-Changer
Think of your home on a sunny day, powered by solar panels. When your panels generate more electricity than you need, that extra energy can be stored in a battery for later use, like in the evening when the sun is down. Now, scale that concept up to power entire cities—that’s the promise of large-scale energy storage.
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"As we move into more renewable energy resources like wind and solar, large-scale storage becomes essential to manage the variability in power generation." -Professor Alan Brent, Victoria University of Wellington,an expert in sustainable energy systems
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This matters because New Zealand is transitioning to a future where renewable energy powers our homes and businesses, reducing our reliance on fossil fuels. Large-scale battery storage is crucial to making this vision a reality, allowing us to store renewable energy when it’s abundant and use it when needed most.
Real-World Examples of Tesla Megapack
Tesla Megapacks have already been deployed in several locations worldwide. The first completed Tesla Megapack installation was in South Australia. After a state-wide blackout during the Australian summer in 2016, the Hornsdale Power Reserve (HPR) was established near Jamestown. Owned and operated by Neoen, the HPR initially had a storage capacity of 129 MWh and a discharge capacity of 100 MW. In 2020, it was expanded to 194 MWh and 150 MW, meaning it can now store more energy and deliver power
even faster, helping to stabilize the grid during peak demand or emergencies. An Aurecon impact report highlights how the HPR continues to support renewable energy integration by smoothing out fluctuations in wind and solar power generation, ensuring a reliable electricity supply, and reducing reliance on fossil fuels, thus lowering greenhouse gas emissions in South Australia.
Similarly, a 182.5 MW energy storage system in Northern California, developed by Tesla in partnership with Pacific Gas and Electric Company (PG&E), is now operational. It includes 256 Tesla Megapack battery units with a total capacity of 730 MWh. PG&E announced that this system enhances the overall reliability of California’s energy supply, especially given the state’s increasing reliance on renewable energy.
The Impact on New Zealand
​In any given year, about 80-85% of New Zealand’s electricity comes from renewable sources like hydro, geothermal, and wind. The remaining 15-20% still relies on burning fossil fuels. The construction of this 100 MW battery system is a significant step toward reducing that dependence and moving closer to a fully renewable energy grid.
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Large-scale energy storage systems like the Glenbrook-Ohurua Battery can help to make our power grid more resilient and stable, meaning fewer blackouts and a more reliable electricity supply, even during peak times or extreme weather. Professor Alan Brent from Victoria University of Wellington notes that large-scale batteries closer to where the demand is will make communities more resilient during challenging events like storms or earthquakes. As energy storage technology becomes more widespread, we could also see a reduction in electricity costs. By smoothing out the peaks and valleys of energy demand, energy storage systems reduce the need for expensive backup power sources, potentially leading to lower prices for consumers.
Challenges and Considerations
While the benefits are clear, large-scale battery systems like the Tesla Megapack also come with challenges. These batteries must be carefully managed to operate safely and efficiently, particularly regarding temperature and voltage limits. For instance, in 2022, a Tesla Megapack battery caught fire at a PG&E substation in California, and a similar incident occurred in Victoria, Australia, during initial tests. Additionally, lithium-ion batteries depend on materials like cobalt, which can be environmentally and ethically problematic. The extraction and processing of these materials can cause environmental harm, and there are ongoing concerns about the conditions under which they are sourced.
Moreover, the environmental impact of manufacturing these batteries must be considered. While the batteries themselves don’t emit greenhouse gases, the production process does have a carbon footprint. Furthermore, batteries have a finite lifespan, which raises questions about recycling and waste management down the line.
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"We need to develop more structured end-of-life processes and explore alternative battery types that offer longer lifetimes and reduced environmental impact." - Professor Alan Brent, Victoria University of Wellington
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Cost is another factor. The Tesla Megapack system is expected to cost NZD 163 million to install. While this is a significant investment, the long-term benefits - both financial and environmental - could make it worthwhile.
Looking Ahead: The Future of Energy in New Zealand
The partnership between Contact Energy and Tesla represents an important development for New Zealand’s energy sector. It demonstrates the country’s willingness to explore innovative technologies as part of its journey toward a more sustainable and resilient energy future. However, this is just one piece of the puzzle.
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As we continue to develop and implement new technologies, we must address the challenges they bring. This includes improving battery recycling processes, exploring alternative energy storage solutions, and finding ways to reduce the environmental impact of battery production.
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"Beyond lithium-ion, we should consider technologies like flow batteries, gravitational storage, and even hydrogen, which could play a significant role in our renewable energy transition."- Professor Alan Brent, Victoria University of Wellington
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For New Zealanders, this project hints at a future where our energy grid could become smarter, cleaner, and more resilient. However, significant uncertainties remain. While the benefits of this technological leap are promising, much depends on how effectively we navigate the challenges ahead. Staying informed and supporting renewable energy initiatives will be crucial as we cautiously move toward a more sustainable energy landscape.
Discover valuable insights from Alan Brent, a leading expert in sustainable energy systems. As a Professor at Victoria University of Wellington, his research focuses on sustainable technologies and energy systems. Learn more about his perspectives on large-scale energy storage solutions—watch Professor Alan Brent's interview here!
Let’s hear the voices from the Contact Energy
Why Tesla?
Contact Energy has selected Tesla's Megapack battery systems to address New Zealand's growing energy storage needs. After evaluating seven suppliers and narrowing the choices down to three, Tesla stood out for its reliability, long-term support, and financial viability.​​​​​
"We looked at seven suppliers and ended up with a shortlist of three, including Tesla. The final decision was based on a combination of reliability, long-term support, and financial aspects."- Nigel Purdy, Senior Commercial Development Manager, Contact Energy
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Nigel Purdy from Contact Energy emphasized the goal of achieving at least 20 years of dependable service, noting that Tesla's ability to offer long-term guarantees and address battery degradation were significant factors in their decision - “Tesla offers long-term guarantees and support, addressing concerns about battery degradation over time.”
Addressing the Fire Incidents: Safety First
Safety was a critical consideration, especially in light of recent fire incidents involving Megapacks in the U.S. and Australia. Purdy acknowledged these events, explaining that they resulted from unusual circumstances during commissioning. Tesla has since implemented clearer instructions and rigorous safety protocols to prevent similar occurrences.​​​​​
Nigel Purdy: “We’re aware of those fire incidents, and there’s been extensive analysis. The fires were caused by an unusual set of circumstances during commissioning, and Tesla has taken learnings from that. The instructions are now extremely clear, and we don’t expect this to happen again,”
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The company conducts controlled burn tests to understand how Megapacks behave under extreme conditions and ensures compliance with international safety standards. The company is certified to international standards, and if a Megapack were to catch fire, it is designed to burn out within a specific timeframe.
"We're confident that by following proper instructions and working closely with fire emergency services, we'll maintain a safe environment," Purdy stated.
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Scaling for the Future
The scalability of Tesla's Megapacks makes them ideal for accommodating future energy demands. While some Australian projects have deployed batteries 10 to 15 times larger than New Zealand's initial setup, projections suggest that New Zealand may require storage capacity up to ten times the current project, depending on supply variability. Future expansions might incorporate technologies for longer-duration energy storage, beyond just two-hour battery duration, further enhancing grid stability.​​​​​
Engaging with the Public
Transparency and public engagement have been central to the project's rollout. Contact Energy has organized open days for local residents and collaborated with Tesla to provide clear information about the safety and environmental impact of large-scale batteries.​​​​​
"We engage with Fire and Emergency New Zealand (FENZ) to ensure that they are well-informed on what to do in case of an incident," Purdy said.
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Both Contact and Tesla will monitor the Megapacks around the clock. Tesla's global monitoring system allows for early detection of potential issues, enabling swift action to prevent public concerns.
“Tesla monitors all its Megapacks globally, and if something starts to go wrong, we’ll have forewarning and can take steps before it becomes a public issue,” Purdy reassures us.