Elon Musk’s Tesla Inc. won a tender to build what the billionaire says is the world’s largest lithium-ion battery system to support South Australia’s blackout-plagued power grid.
“We’re talking about something that’s three times as powerful as the next biggest battery installation in the world,” Musk told reporters in Adelaide.
Tesla will provide 100 megawatts of battery storage by Dec. 1, pairing it with a wind farm at Hornsdale north of Adelaide operated by France’s Neoen, according to a statement on Friday from South Australian Premier Jay Weatherill. The system, which will have capacity of 129 megawatt-hours, will provide enough power for more than 30,000 homes, Tesla said in a separate statement.
Musk four months ago promised on Twitter to build the energy storage system and get it working within 100 days of a contract being signed or Tesla would provide it free, a vow he backed up on Friday.
“We actually insisted when doing the contract that we be held to the 100 days or it’s free,” Musk said. “That’s what we said publicly, that’s what we’re going to do.”
Should the project be up and running “in the next 100 days, it would likely be the world’s largest lithium-ion battery,” said Simon Habart, a Hong-Kong based research analyst with Bloomberg New Energy Finance. “The competition for primacy will be tight, as projects of similar size are rapidly springing up in Australia, Canada and Japan.”
The project win follows a difficult week for Tesla, which lost about $12 billion in market value after reporting underwhelming sales, and faces increasing competition from Volvo Car Group, which vowed to electrify much of its its vehicle lineup over the next few years. Tesla fell less than one percent to $308.38 at 9:44 a.m. in New York.
“Battery storage is the future of our national energy market and the eyes of the world will be following our leadership in this space,” Weatherill said in the statement. Australia’s largest power generator, AGL Energy Ltd., tweeted its support for the deal after it had previously offered a site for Tesla’s battery storage proposal.
Palo Alto, California-based Tesla, best known for its all-electric Model S sedan, aims to be in the front ranks of the emerging energy storage market. Besides offering the residential energy storage units known as the “Powerwall” to customers, Tesla is making much larger-scale energy storage systems known as “Powerpacks” for commercial businesses and the world’s utilities.
The same lithium-ion battery technology that powers Tesla’s cars is being used to help integrate growing amounts of solar and wind onto electric grids, and the company’s stated mission is to “accelerate the world’s transition to sustainable energy.”
In California, Tesla was selected to provide a 20 MW/80 MWh Powerpack system at Southern California Edison’s Mira Loma substation. Tesla successfully installed the system in 3 months.
Musk’s pledge to bring battery storage to South Australia thrust him into the middle of a messy political spat over energy policy. A series of power outages in South Australia have raised fears of more widespread blackouts across the nation’s electricity market and raised questions as to why one of the world’s largest producers of coal and gas is struggling to keep the lights on in a mainland state.
Musk’s 100-day battery promise found a receptive ear in Australian Prime Minister Malcolm Turnbull, who made innovation a flagship policy ahead of an election last year and, prior to politics, made a fortune in the late 1990s dotcom boom.
Australia is expected to invest A$69 billion ($52.46 billion) in rooftop solar and battery storage by 2040, according to Bloomberg New Energy Finance.
Energy storage will “be a priority this year,” Turnbull tweeted back in March. Musk replied on Twitter that renewables and storage were huge disrupters to traditional electricity supply while Australian tech billionaire Mike Cannon-Brookes, who helped spark the search for a solution to the energy crisis, said in March that the “space age” technology could be a speedy solution for South Australia.