Tesla is to deliver the world’s largest lithium-ion battery in South Australia – with a pledge to supply the system within 100 days or offer it free of charge.
Under the terms of the deal, with South Australia’s state government, (the financial details of which have not been released), Tesla will provide the 100MW/129MWh Powerpack system to be paired with French utility Neoen’s Hornsdale wind farm near Jamestown.
The deal was announced on 6 July after what Tesla said was a competitive bidding process. South Australia premier Jay Weatherill said in a statement the deal confirmed an earlier commitment by Tesla CEO Elon Musk (pictured) “to deliver the system within 100 days or provide it free”.
Weatherill said it had been agreed between Tesla and the South Australian Government “that the starting date for the 100 days will be once the grid interconnection agreement has been signed”.
The Tesla-Neoen consortium had “demonstrated it is capable of delivering 100MW of capacity by 1 December and provided a highly competitive commercial offer with the best value for money”, Weatherill said.
“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. “This historic agreement does more than bring a sustainable energy giant in Telsa to South Australia, it will also have some significant economic spin-offs.”
Tesla said that on completion of the project by December, “this system will be the largest lithium-ion battery storage project in the world and will provide enough power for more than 30,000 homes, approximately equal to the amount of homes that lost power during the blackout period”.
Musk said on Twitter: “This will be the highest power battery system in the world by a factor of three. Australia rocks!!”
According to UK newspaper The Guardian, Musk told reporters in Adelaide: “When you make something three times as big, does it still work as well? We think it will, but there is some risk in that. We’re confident in our techniques and the design of the system.”
The tender was launched in the wake of a major blackout in South Australia last year.
The CEO of Australian flow-battery manufacturer Redflow, Simon Hackett, said of the deal: “This is not a competition between Tesla and other battery companies, it’s about renewables and energy storage demonstrating their capacity to technically and affordably replace fossil fuels. I look forward to seeing a system of that scale running on the South Australian grid as soon as possible.”
Hackett said the “ambitious Tesla project demonstrated the growing maturity of energy storage systems”, adding: “Elon Musk’s promise to deploy 129 MWh of batteries for South Australia in 100 days is a big challenge, even for a US$50 billion company like Tesla. As a far smaller company, Redflow is not yet configured to produce that volume of batteries in that timeframe, so we will continue delivering our ZBM2 and ZCell batteries to telecom and residential customers in Australia and overseas.”
“Redflow is well positioned to be a part of the solution in markets appropriate to its technology,” Hackett said. “Every battery manufacturer is likely to be busy for the foreseeable future, all working to their respective technical strengths.”
Earlier this year, Tesla supplied 20MW of lithium-ion batteries for Southern California Edison’s Mira Loma Substation in Ontario, in a project completed in just 88 days.
In March, BBB reported that Ross Garnaut, chairman of Australian firm Zen Energy, had told The Guardian that the Australian government should provide more opportunities to Australian companies. Garnaut reportedly said that Zen Energy could also deliver 100MWh energy storage solution by the summer.
The chief executive of Australia’s Energy Storage Council, John Grimes, also reportedly said Tesla’s offer to build the system could be achieved by Australian companies who would be more price-competitive.
BBB reported last month that an ‘Independent Review into the Future Security of the National Electricity Market’, led by Australia’s chief scientist Dr Alan Finkel, recommended the federal Government consider regulatory reforms that could “reward” consumers and others who invest in battery storage systems.