Tesla's Lyndon Rive and Elon Musk boldly claimed in March that its Powerwall 2 can be the solution to South Australia's energy crisis and even went so far as to guarantee a complete set-up within 100 days of contract signing or it's free.
International and local clean energy storage providers also rose to the challenge but the final results of negotiations reveal that the Australian government has chosen to take Musk up on his guaranteed service.
That is not to say other companies were snubbed. In fact, all clean energy companies interested in offering their products and services for the region had to undergo a bidding process. It is just that Tesla still won the bid and decided to back up Musk's guarantee.
"This week, through a competitive bidding process, Tesla was selected to provide a 100 MW/129 MWh Powerpack system to be paired with global renewable energy provider Neoen's Hornsdale Wind Farm ... Tesla was awarded the entire energy storage system component of the project," Tesla announced.
Both Musk and Australian Premier Jay Weatherill declined to say how much the entire project actually costs; however, the Tesla CEO projected a loss of about $50 million or more if the company fails to deliver on its promise.
"We actually insisted in the contract that we be held to the hundred days or it's free. That's what we said publicly, that's what we are going to do," Musk confirmed at a press conference on July 6.
That is why Musk also said Tesla will make sure to have everything up and running within the agreed schedule, which means South Australia will have a functional 129 megawatt-hours of storage capacity to pair with its windmills by December 2017.
This will be the highest power battery system in the world by a factor of 3. Australia rocks!! https://t.co/c1DD7xtC90
— Elon Musk (@elonmusk) July 7, 2017
World's Largest Clean Energy Storage
Once the system is up and running by the end of 2017, Tesla's Powerwall 2 systems would be able to provide clean energy to roughly 30,000 homes in South Australia, which is about the number of homes that are severely affected by the energy crisis. This will also make the facility the world's largest lithium-ion storage project, but that is not all. According to Musk, the storage system also offers efficiency and cost-effectiveness for both the government and the consumers because the batteries can be charged when the cost of production is high and discharged when it is low. "It's a fundamental efficiency improvement for the grid," Musk said. Premier Weatherill is proud that South Australia is the leading nation when it comes to renewable energy, if his tweets below are any indication.
World’s largest lithium ion battery will be installed in #SouthAustralia under a historic agreement between #Neoen #Tesla & SA Gov! pic.twitter.com/GcfrwOzD9g — Jay Weatherill (@JayWeatherill) July 7, 2017
South Australia is already leading the nation. Today, we lead the world. pic.twitter.com/1mEJoNC0ma
— Jay Weatherill (@JayWeatherill) July 7, 2017
Battery storage is the future of our national energy market. The world will follow SA's leadership in this space — Jay Weatherill (@JayWeatherill) July 7, 2017
Watch Musk speak about Tesla's historic agreement with the South Australian government below.