South Australia has suffered significant blackouts in recent months due to storms and heat. Now, the Australian state is looking for ways to fortify the grid, and it’s apparently turning to Tesla to provide some grid-tied storage.
In a press release, Tesla wrote that it was chosen “through a competitive bidding process” to build a 100 MW/129 MWh battery system, which will draw energy from Neoen’s Hornsdale Wind Farm near Jamestown, South Australia. The project will be the largest grid-tied lithium-ion battery system in the world.
The news comes several months after a Twitter exchange between Tesla CEO Elon Musk and Mike Cannon-Brookes, the billionaire behind software company Atlassian. Cannon-Brookes asked Musk if he could deliver 100MW in 100 days to South Australia and Musk responded in a tweet, “Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?”
The high-profile bet sent Australian politicians scrambling, and Australian Prime Minister Malcolm Turnbull called Musk personally the day after. Australian battery makers said they could beat or match Tesla’s offer on time. South Australian Premier Jay Weatherill said that battery makers, including Tesla, would have to compete for access to a A$150 million ($115 million) renewable energy fund for any potential 100MW storage contract.
Now that Tesla has won a contract to install batteries in South Australia, Musk told reporters in Adelaide this morning that his company has to install the system in 100 days. Tesla’s press release notes that the system will go online in December 2017, which is more than 100 days from today. Ars has contacted Tesla for clarification and will update this post if we receive a response. According to Reuters, Musk said that missing the 100-day deadline would cost Tesla “$50 million or more,” although he did not elaborate.
Although Tesla did not divulge what its South Australian installation will cost, Musk tweeted to Cannon-Brookes back in March that he could offer “$250/kWh at the pack level for 100MWh+ systems.” That would bring a 129MWh system to about $32.35 million before taxes and labor.
Tesla has experience installing grid-tied batteries on a tight deadline. In January, the company installed an 80 MWh battery system in a little over 130 days.