Tesla, Inc. (NASDAQ: TSLA) has been selected as the winning bidder for a project to install the world’s largest grid-scale battery in South Australia.
Over the last three years, South Australia has decided to shut down its coal-fired power stations and instead rely on wind, solar and gas. In particular it has raced ahead of the rest of the country in turning to wind power, which supplies 40 percent of its energy.
However, the region has experienced several blackouts over the past four months due to the fact that energy cannot be stored when there is an absence of wind. In September, South Australia's 1.7 million residents were left without power, some of them for up to two weeks, when the grid overloaded and collapsed.
Grid operators had indicated that their system woes could be alleviated by adding fast reacting electricity storage capable of providing 100 MW for somewhere between one and three hours. Tesla’s proposal was reinforced by the fact that it recently installed a 20 MW, 80 MWhr in Southern California.
Under the agreement, Tesla has 100 days to deliver the 100-MW battery, which is designed to light up 30,000 homes if there is a blackout, otherwise it will be free. The company is confident in its ability to do so.
"There will be a lot of people that will look at this -'Did they get it done within 100 days? Did it work?'" CEO Elon Musk told reporters in South Australia's capital city of Adelaide. "We are going to make sure it does." He added, without elaborating, that failing to deliver the project in time would cost his company "$50 million or more."
Several companies that expressed interest in the project doubt Musk’s estimate. Tesla has been telling the world that it can and will finish the project within three months, said a source at a Korean competitor to Tesla. "It seems that confidence helped Tesla win, but typically this kind of project takes six months so we have to wait and see whether or not Tesla can do it."