What began last March as a high-profile challenge has ended with Tesla winning a contract to deliver the world’s biggest grid-scale battery within 100 days—or the utility acquiring the unit for emergency backup will receive it for free.
“There will be a lot of people that will look at this—’Did they get it done within 100 days? Did it work?'” Musk said in Adelaide. “We are going to make sure it does.” He added that failure to hit the deadline would cost Tesla “$50 million or more”.
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But if “South Australia was up to the challenge, if South Australia is willing to take a big risk, then so are we,” he added. “Actually, I’m pretty darned impressed with South Australia. It takes a lot of gumption, so obviously, huge respect for that.”
The story began last September, after severe storms caused widespread blackouts in South Australia and Prime Minister Malcolm Turnbull wrongly blamed the incident on the state’s rapid adoption of solar and wind generation. “Tesla will get the system installed and working 100 days from contract signature or it is free,” Musk tweeted, in a March 10 conversation with Australian tech billionaire Mike Cannon-Brookes. “That serious enough for you?”
“You’re on, mate,” Cannon-Brookes replied. “Give me 7 days to try sort out politics & funding. DM me a quote for approx 100MW cost—mates rates!”
The deal took more than seven days to finalize, and Reuters reports that it now calls for Tesla to deliver 100 megawatt-hours of capacity to a new windfarm operated by France’s Neoen—the low end of the 100 to 300 MWh that Musk originally offered. Even so, “it will be the largest lithium-ion battery storage project in the world, overtaking an 80 megawatt-hour facility in California, also built using Tesla batteries.”
“Cost-effective storage of electrical energy is the only problem holding us back from getting all of our power from wind and solar,” Griffith University science professor Ian Lowe told the news agency. “This project is a significant innovation to demonstrate the feasibility of large-scale storage.”
Reuters adds that dozens of companies expressed interest in the project, and they’re now watching to see whether Musk can deliver on his bold promise. “Tesla has been telling the world that it can and will finish the project within three months,” said one unnamed source with a competing firm. “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.”
Tim Hollo, executive director of Australia’s Green Institute, puts the deal in a wider context in an opinion piece for The Guardian.
“Elon Musk’s agreement to build the world’s largest battery for South Australia isn’t just an extraordinary technological breakthrough that signs coal’s death warrant,” he writes. “It’s potentially a game changer in the way we do politics, reinserting the importance of basic reality into a debate which has been bereft of it for too long.
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