Elon Musk’s Tesla Motors and French wind farm developer Neoen have won a landmark tender to supply a 100-megawatt battery to shore up South Australia’s fragile power grid, the largest battery project in the world.
Mr Musk, founder of the California-based electric vehicle company which has turned its sights to energy storage, said the battery would change the energy market by helping to stabilise South Australia’s power grid and lower prices.
“This system will be three times more powerful than any system on earth. This is not a minor foray into the frontier. It is going three times further into the frontier than anyone has gone before,” he said. The battery will be built in Jamestown, north of Adelaide.
Mr Musk said he had insisted on including his Twitter bet with Atlassian founder Michael Cannon-Brookes – in March – to have the system up and running “within 100 days” of agreeing on a grid connection “or it’s free”.
“There was this opportunity to make a significant statement about renewable energy to the world – to show that you can really do a large-scale, heavy-duty, utility-level battery system, and South Australia was up for the challenge.”
Coal Has No Future
In a crack at former prime minister Tony Abbott and other government members who favour building new coal-fired power stations to shore up the grid, he said coal power was too costly to fund because “coal doesn’t have a long-term future”.
“The writing is on the wall for the long-term future of coal,” Mr Musk said. “When you go to investors they know coal doesn’t have a long-term future so the capital cost is incredibly high because they have to charge a very high interest rate because they don’t expect it to last.”
South Australian Premier Jay Weatherill said the battery would be up and running in time for next summer – when more blackouts are feared.
“South Australia has been leading the nation in renewable energy – now we are leading the world in battery storage,” Mr Weatherill said.
The battery will have capacity of 129 megawatt hours, enough to run for just more than an hour at maximum output, and will be the largest installed in the world to date, Neoen deputy chief executive Romain Desrousseaux said.
Bruce Mountain, director of Carbon + Energy Markets, said the “stunning” plan heralded a “profound change in power system economics” and could affect rival plans for back-up diesel generators, high voltage interconnectors and the Turnbull government’s $2 billion Snowy Hydro 2.0 plan.
“If delivered by the end of this year, this will have profound implications for the development of interconnectors and possible pumped hydro which will barely have got past pre-feasibility assessment in the time that a large battery has moved from [apparently] random tweet to commissioning,” he said.
The battery will be paired with Neoen’s 315MW Hornsdale wind farm to provide additional energy security when the wind drops during periods of high electricity demand.
The battery tender is part of a $550 million energy security plan announced by the Weatherill government in March in response to the wind and solar power reliant state’s summer of blackouts, electricity shortages and soaring prices.
It was announced a few days after Tesla founder Elon Musk promised to solve SA’s energy woes “in a hundred days or its free” in response to a challenge from Atlassian founder Michael Cannon-Brookes. The company installed a large battery in California last year.