Mike Cannon-Brookes and Elon Musk are in talks to replace one of Australia’s largest coal-fired power plants — if the government will let themMike Cannon-Brookes has kicked off talks with battery titan Elon Musk about developing a replacement power source for the ageing Liddell coal-fired power plant, but says the Morrison government must clearly set out the rules of engagement for any new investments.
Prime Minister Scott Morrison threatened on Tuesday to build a gas-fired power plant if the private sector did not step in to fill the 1000 megawatts of dispatchable power it says is needed in NSW once AGL shuts down Liddell in 2023.
Mr Cannon-Brookes expressed interest in backing alternatives to a new gas plant, but said it was unclear what the government would accept as a source of dispatchable power. He called for clearer deadlines and said the market should determine the optimal replacement for Liddell.
"Let the rules be clear and let people play the game," the tech billionaire and Atlassian co-founder said. "It's almost like the answer has been given [that a gas plant is needed] and there's no question."
He said battery technology was commercially viable and developing so quickly that even traditional fossil fuel utility companies such as AGL had unveiled plans to transform its Liddell site into a giant electricity storage facility as it embarked on a target to install 850 megawatts of large-scale batteries within four years.
"I was in contact [with Elon Musk] overnight, unsurprisingly. Tesla builds fantastic batteries. If there was an option to be involved in a project as expected, they would say, sure, let's have a look at it. Right?
"If you want a large-scale battery, there's only a couple of companies that can do that.
"[But] if you say we're building a gas plant no matter what, then guess what? They're not going to be interested because they actually have nothing to bid for or against."
SA battery a success
Last time the billionaires put their heads together on Australian energy policy in a Twitter exchange in early 2017, Mr Cannon-Brookes challenged Mr Musk – who said he could solve South Australia's grid problems – to build a battery in less than 100 days.
That battery, deployed by French company Neoen at the Hornsdale Power Reserve, is considered a success, taking just a little over two years to recoup the cost of construction.
"If the government wants it done fast, great. Tell us there's an April deadline. We're great with deadlines. Tell us they have to be live by 2023 December. Great.
"These are the rules of the game. Let the market bid for that," Mr Cannon-Brookes said.
"My concern is having the rules there so that I could be open to it; without those rules there's no no way that I could be open to it no matter what."
Mr Cannon-Brookes told The Australian Financial Review some of what Mr Morrison announced was good news, such as new interconnectors to better integrate renewable energy into the grid.
"Offshore wind on the west coast of Tasmania is one of the best wind resources we have in the country. It's largely untapped because Basslink is full. Why would you build a wind power plant if you can't sell it to the Tasmanians that have all the energy they need?
"If you built the Marinus [undersea cable from Tasmania] then you're going to have a lot more of that energy again coming into NSW or coming to Victoria."
He queried whether that 1500MW link was included in the government's modelling, joining the chorus of people questioning the need for a 1000MW gas-fired generator when the Australian Energy Market Operator says only 150MW would be needed after Liddel closed.
"I'd just like to see the numbers. Show us the numbers. I have not seen any numbers. I've just seen a press release with text on it," he said.
Energy Minister Angus Taylor said the government's been very clear on what's needed.
"It's very clear. We need 1000 megawatts of capacity. We need it committed by April next year. It's got to be capable of running 365 days a year, 24/7. It's got to be dispatchable," he said.
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