Tesla has now been picked to develop the world’s largest grid-scale battery in South Australia. The region has faced blackouts since September 2016, resulting in a political tussle over energy policy. Tesla’s grid-scale battery will work with a wind farm provided by France’s Neoen and will help set a benchmark for large-scale renewable energy use.
Grid-scale battery to address power crisis
South Australia is the front-runner in adopting wind power. It even closed its coal-fired plants, which resulted in an outage across the eastern part of the nation and drove up energy prices. Despite heavy reliance on renewables, the region so far has failed to adequately store energy, leading to problems when there is no wind, notes Reuters.
Thus, it is now accepting Tesla’s help to address the issue by with a grid-scale battery. The deal, which was confirmed on Friday, forms a major part of the government’s $550 million energy plan. According to officials, Tesla’s grid-scale battery, which will be paired with Neoen’s existing Hornsdale Wind Farm near Jamestown, north of Adelaide, will work around the clock and is capable of providing additional power during emergencies.
“It will completely transform the way in which renewable energy is stored, and also stabilize the South Australian network as well as putting downward pressure on prices,” said Premier Jay Weatherill.
The wind farm will help charge the grid-scale battery when the wind is blowing. The project is expected to be completed by December.
Project does involve “some risk”: Musk
A Tesla spokesman told Reuters that the project will have a storage capacity of 129 megawatt-hours, which is enough to power 30,000 homes. Musk said the project will not be without technical challenges, considering that it will be the biggest battery installation “by a significant margin.” Further, the CEO said the project will help stabilize the grid and bring down consumer prices.
“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,” he said. “We’re confident in our techniques and the design of the system.”
In line with Tesla CEO Elon Musk’s promise in March, the company must deliver the 100-MW battery within 100 days of the contract, or it’s free. Musk told reporters that the project will attract a lot of public attention, as people will be curious to see whether they get it done within 100 days and if it worked.
“We are going to make sure it does,” he added
Though the cost of the project has been not revealed yet, Musk says the project will cost his company “$50 million or more” if they fail to deliver the project in time. Recently, the U.S. firm developed an 80MWh grid-scale battery farm in southern California in just 90 days. The project was estimated to cost about $100 million, notes The Guardian.
On Thursday, Tesla shares closed down 5.58% at $308.83. Year to date, the stock is up more than 44%, while in the last year, it is up more than 43%.