• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup

2

Markets tumble worldwide as Fed resets expectations: $400 billion wiped off SpaceX stock

3

Current price of oil as of June 23, 2026

1

After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup

2

Markets tumble worldwide as Fed resets expectations: $400 billion wiped off SpaceX stock

3

Current price of oil as of June 23, 2026
battery storage

Why Elon Musk’s Offer of Tesla Batteries Won’t Solve Australia’s Power Problems

By
Reuters
Reuters
Down Arrow Button Icon
By
Reuters
Reuters
Down Arrow Button Icon
March 14, 2017, 6:17 AM ET
Add Fortune on Google for similar content.

Australia is becoming an interesting microcosm on how to, or how not to, transition an economy from being predominantly powered by coal to more climate-friendly alternatives.

The dramatic intervention by Tesla Chief Executive Elon Musk last week is just the latest twist in an ongoing saga that pits business, government, farmers, government and environmentalists against each other.

Musk, in an exchange of tweets with software billionaire Mike Cannon-Brookes, chief executive of Atlassian (TEAM), offered to fix the electricity supply problems of South Australia state within 100 days of signing a contract.

Musk’s plan is to install 100 megawatts (MW) of grid-connected battery storage, which would be available to meet peak demand and would be charged with surplus electricity from other generating sources in periods of low demand.

It’s a bold offer and would most likely provide a quick fix to Australia’s fourth-largest state, which suffered a blackout last November and has been dealing with power shortages over the peak summer period.

Businesses like BHP Billiton (BHP), which operates the giant Olympic Dam copper mine in the state, have been pushing for the government and other stakeholders to ensure stable electricity supply, saying the cost of blackouts runs into millions of dollars in lost output.

Musk, whose Tesla (TSLA) is ramping up output of its battery storage packs at its Gigafactory in Nevada, held talks with Australian Prime Minister Malcolm Turnbull at the weekend, as well as with South Australian Premier Jay Weatherill.

The politicians will no doubt be tempted to Musk’s offer to install batteries, especially since the electric car pioneer said if he didn’t meet his 100 day deadline, he wouldn’t charge anything.

But while Musk’s offer, if taken up, would provide a quick fix, it would not do enough to mend the underlying problems at the heart of Australia’s electricity woes.

It’s worth looking at how Australia got itself to the point where virtually all players can agree that the nation is facing something approaching an energy crisis.

After all, the country is not short of fossil fuels such as coal and natural gas, and its climate and low population density outside the major cities are ideal for renewables such as solar and wind power.

The country is heavily reliant on an aging fleet of coal-fired power stations, which makes Australia one of the highest polluters per capita.

These coal power stations are starting to close down, with one shutting in South Australia last year and another planned to close in Victoria state at the end of this month.

The problem is that the coal-fired power stations’ role as providers of base load electricity cannot be taken over by wind and solar, and the role is falling to natural gas.

But natural gas is also the most expensive method of generating electricity in Australia, so utilities are reluctant to run their gas-fired plants until prices are high enough to justify the cost.

South Australia has a gas-fired plant that was mothballed until last year’s power supply crisis, but even with the higher prices for electricity, the operator is struggling to make the plant profitable.

The state moved on Tuesday to try and address its energy security issues, announcing it would build a 250 MW gas-fired plant and help the private sector build a 100 MW battery, at a total cost of A$510 million ($385 million).

Gad Supply Constraints

Natural gas supply is becoming a problem in Australia, which may seem ironic given the country is on the verge of becoming the world’s largest exporter of liquefied natural gas (LNG) as the last of eight new plants come closer to completion.

In fact, the new LNG plants are copping some of the blame for the tightening natural gas market, especially the three in eastern Queensland state based on using coal-seam gas as the feedstock.

These are being blamed for sucking domestic natural gas out of the market and into the export LNG industry.

What hasn’t helped is that some of Australia’s state and territory governments are also pursuing policies that will restrict future natural gas supplies.

Victoria state has banned hydraulic fracturing, or fracking, as well as shale and coal-seam gas exploration, while the Northern Territory, New South Wales and Tasmania have various moratoriums on fracking.

This leaves Western Australia, Queensland and South Australia as the remaining states where onshore natural gas supplies can be developed, and they are now in the cross-hairs of the environmental lobby, which is opposed to any and all new natural gas wells.

Politicians across the traditional Labor-Liberal divide are increasingly giving in to demands to restrict natural gas exploration, while pretending that this won’t have a negative impact on energy security and electricity prices.

But the costs are starting to become apparent, with spot electricity prices surging over the Australian summer and natural gas suppliers warning that they will be unable to meet the needs of industrial customers without action being taken.

It’s often the case politicians only take action when the point of crisis is reached, and this appears to be the case in Australia.

What’s needed is a holistic approach to energy supply as Australia transitions away from coal-fired power.

This means ensuring enough natural gas is available to provide base load generation, while scaling up renewables such as solar, wind, pumped hydro and battery storage.

Forging enough common ground with the various stakeholders will be the main obstacle, but more than anything else, Australia is showing how difficult it is to end the age of coal.

The opinions expressed here are those of the author, Clyde Russell, a columnist for Reuters.

About the Author
By Reuters
See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in

rh
AIReid Hoffman
Reid Hoffman says SpaceX is ‘not an AI company’ and xAI is a ‘complete train wreck’—and there’s room for both OpenAI and Anthropic
By Nick LichtenbergJune 24, 2026
2 hours ago
Current refi mortgage rates report for June 24, 2026
Personal FinanceReal Estate
Current refi mortgage rates report for June 24, 2026
By Glen Luke FlanaganJune 24, 2026
4 hours ago
Current ARM mortgage rates report for June 24, 2026
Personal FinanceReal Estate
Current ARM mortgage rates report for June 24, 2026
By Glen Luke FlanaganJune 24, 2026
4 hours ago
Now she’s worth $200 million. But Sarah Jessica Parker says being ‘one of eight kids that struggled financially’ growing up created her work ethic
SuccessCareer Advice
Now she’s worth $200 million. But Sarah Jessica Parker says being ‘one of eight kids that struggled financially’ growing up created her work ethic
By Orianna Rosa RoyleJune 24, 2026
4 hours ago
Mortgage rates today, June 24, 2026
Personal Financemortgages
Mortgage rates today, June 24, 2026
By Glen Luke FlanaganJune 24, 2026
4 hours ago
Tesla cofounder JB Straubel’s first pitch to Elon Musk failed. Then he turned his ‘hobby’ into a $1.3 trillion success
SuccessBrainstorm Tech
Tesla cofounder JB Straubel’s first pitch to Elon Musk failed. Then he turned his ‘hobby’ into a $1.3 trillion success
By Rachel VentrescaJune 24, 2026
4 hours ago

Most Popular

After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup
Success
After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup
By Orianna Rosa RoyleJune 23, 2026
23 hours ago
Markets tumble worldwide as Fed resets expectations: $400 billion wiped off SpaceX stock
Banking
Markets tumble worldwide as Fed resets expectations: $400 billion wiped off SpaceX stock
By Jim EdwardsJune 23, 2026
1 day ago
Current price of oil as of June 23, 2026
Personal Finance
Current price of oil as of June 23, 2026
By Joseph HostetlerJune 23, 2026
22 hours ago
Meet the 2 men putting New York's $300 billion pension fund in play for the first time in 20 years
Investing
Meet the 2 men putting New York's $300 billion pension fund in play for the first time in 20 years
By Nick LichtenbergJune 22, 2026
2 days ago
Former U.S. Secret Service agent says bringing your authentic self to work stifles teamwork: 'You don’t get high performers, you get sloppiness'
Success
Former U.S. Secret Service agent says bringing your authentic self to work stifles teamwork: 'You don’t get high performers, you get sloppiness'
By Sydney LakeJune 21, 2026
3 days ago
Texas and Charlotte used to build huge McMansions—now they're copying the California design tricks they once mocked
Real Estate
Texas and Charlotte used to build huge McMansions—now they're copying the California design tricks they once mocked
By Sydney LakeJune 22, 2026
2 days ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.