Elon Musk has a chance to make good on his promise.
Tesla won a contract Friday with the state government of South Australia to build a 100-megawatt/129-megawatt-hour Powerpack energy storage system as part of a major grid overhaul. The record-setting system will help integrate renewable generation and balance the grid during peak demand moments.
A 50-year storm in September 2016 plunged 1.7 million residents of South Australia into darkness and stoked questions about how to improve the region's electrical infrastructure. In March, Musk weighed in on Twitter with a high-stakes bet: “Tesla will get the system installed and working 100 days from contract signature or it is free.”
The company's bid proved persuasive, beating out more than 90 other proposals. A blog post from Tesla says the system will be up and running by December. The 100-day countdown will begin once the parties sign a grid interconnection agreement.
At 100 megawatts, this system will have more power capacity than any other battery. AES currently claims the largest lithium-ion battery in operation with its 30-megawatt, 120-megawatt-hour system installed for San Diego Gas and Electric after the Aliso Canyon gas leak.
AES won a contract to build a 100-megawatt/400-megawatt-hour battery station in Long Beach, California to provide capacity in the wake of power plant retirements. That system, though contracted in 2014, is scheduled to come on-line in 2021.
That was in line with the time horizons that utilities traditionally operate in for procurements. Since then, the ramp-up in lithium-ion manufacturing has enabled rapid-fire deployments in response to grid crises. The Aliso Canyon gas leak prompted one such sprint; the Australian blackouts have provided another.
The new Australian Powerpacks will accompany a wind farm by French renewable energy company Neoen. The storage will help integrate the variable wind generation onto the grid and provide peak capacity as needed. Tesla noted the system will hold enough energy to power more than 30,000 homes, roughly the number that lost power during the blackout.
“Battery storage is the future of our national energy market, and the eyes of the world will be following our leadership in this space,” South Australian Premier Jay Weatherill said in a statement.
This system does not have the 4 hours of capacity seen in the Aliso storage systems; if called upon to deliver a full 100 megawatts, it will only last a bit more than an hour. That suggests its role will be more in fine-tuning the ups and downs of generation relative to demand.
Then again, 100 megawatts is a lot. The system could keep up a steady discharge of 20 megawatts for more than 5 hours.
Australia has proven a fertile market for residential storage, thanks to high rates of rooftop solar penetration and declining compensation from feed-in tariffs. Remote mining operations have driven demand for storage-backed microgrids. There has been little action on the front-of-the-meter side — until now.
Musk has succeeded in spinning a tweet into a 100-megawatt contract. Now all eyes are on Tesla to deliver at a scale that has never been seen before. This will happen alongside the company's production ramp-up for its first mass-market car, the Model 3. The company already saw its car delivery number dip in Q2 compared to Q1 due to a “severe production shortfall” of its newer 100-kilowatt-hour battery packs.
The company reports that it solved the battery production issue in June. Musk's goal is to produce 100 Model 3 units in August before ramping up to 20,000 per month in December.
Now Tesla can add 100 megawatts of grid storage in 100 days to the to-do list.