SYDNEY (Reuters) - Tesla Inc (TSLA.O) has won an Australian contract to install the world’s biggest grid-scale battery, in what experts say will be a litmus test for the reliability of large-scale renewable energy.

South Australian Premier Jay Weatherill (R) listens to Tesla Chief Executive Officer Elon Musk speak during an official ceremony in Adelaide, Australia, July 7, 2017 to announce that Tesla will install the world's largest grid-scale battery in the South Australian state. AAP/Ben Macmahon/via REUTERS

Tesla’s CEO Elon Musk, known for his bold approach to cars, clean energy and space exploration, trumped dozens of competing proposals to build the gigantic lithium-ion battery that will serve as emergency back-up power for South Australia - a state racked by outages.

But under the agreement, Tesla must deliver the 100-MW battery within 100 days of the contract being signed or it will be free - a commitment Musk made in a Tweet in March.

“There will be a lot of people that will look at this -‘Did they get it done within 100 days? Did it work?’” Musk told reporters in South Australia’s capital city of Adelaide.

“We are going to make sure it does.”

The battery, designed to light up 30,000 homes if there is a blackout, will be built on a wind farm operated by France’s Neoen - parts of which are still under construction.

Musk said failing to deliver the project in time would cost his company “$50 million or more”, without elaborating.

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.

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.

The move has been applauded by environmentalists but left the state prone to outages as there is no way to store enough energy when the wind doesn’t blow. 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.

The battery is aimed at getting around the problem of inadequate storage.

“Cost-effective storage of electrical energy is the only problem holding us back from getting all of our power from wind and solar,” said Ian Lowe a professor of science at Australia’s Griffith University.

“This project is a significant innovation to demonstrate the feasibility of large-scale storage.”

LITHIUM AMBITIONS

Dozens of companies from 10 countries, including privately owned Lyon Group, working with U.S. power company AES Corp (AES.N), expressed interest in the project.

Now the sector is waiting to see if Musk can make good on his promise.

“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, declining to be identified due to the sensitivity of the matter.

“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,” the source said.

Tesla Chief Executive Officer Elon Musk speaks during an official ceremony in Adelaide, Australia, July 7, 2017 to announce that Tesla will install the world's largest grid-scale battery in the South Australian state. AAP/Ben Macmahon/via REUTERS

Lithium-ion batteries have been in widespread use since about 1991, but mostly on a small scale, such as in laptops and cell phones. A typical lithium-ion battery can store 150 watt-hours of electricity in 1 kilogram of battery, representing more than double the capacity of nickel batteries.

For their proponents who have long been pushing for grander use, the success of Musk’s big South Australian experiment will be key to greater acceptance.

“For lithium technology to take off on a global scale, they clearly need the storage capacity to make sure renewables can deliver 24 hours a day, seven days a week,” said Adrian Griffin, a geologist who specializes in lithium extraction.</s>South Australia has picked Tesla to install the world's largest grid-scale battery that would be paired with a wind farm provide d by France's Neoen, as the state battles to keep the lights on.

South Australia has raced ahead of the rest of the country in turning to wind power, triggering a shutdown of coal-fired plants that has led to outages across the eastern part of the nation, driving up energy prices.

The drawback to South Australia's heavy reliance on renewables has been an inability to adequately store that energy, leading to vulnerabilities when the wind doesn't blow.

Under the terms of the agreement, Tesla must deliver the 10- battery within 100 days of a contract being signed or it's free, matching a commitment made by Tesla Chief Executive Officer Elon Musk in a Twitter post in March.

There will be a lot of people that will look at this, 'did they get it done within 100 days? Did it work?'" Musk told reporters in South Australia's capital city of Adelaide.

"We are going to make sure it does."

Dozens of companies from 10 countries had expressed interest in the South Australian project, which is viewed as a major test for the reliability of large-scale renewable energy use.

For more on Tesla energy generation and storage, watch Fortune's video:

Tesla said in a state ment that upon completion by December 2017, the system would be the largest lithium-ion battery storage project in the world, overtaking an 80 megawatt-hour power station at Mira Loma in Ontario, California, also built using Tesla batteries.</s>TESLA FOUNDER Elon Musk has announced plans to build the world's largest lithium-ion battery to store renewable energy in South Australia.

Musk's Tesla, which focuses on electric cars, will work with French utility company Neoen to build the 129MWh battery. It will be paired with a wind farm and is designed to give South Australia better access to renewable energy supplies after repeated blackouts.

Back in March of this year, Musk exchanged tweets with Mike Cannon-Brookes, the Australian entrepreneur behind the American tech company Atlassian. In the tweets, Cannon-Brookes questioned how serious Musk was in regards to building a battery this size.

In response, Musk said Tesla would get the system installed and working 100 days from contract signature or it would come at no cost to the Australian government - he later revealed that if his team were to take longer than 100 days, it could the company about $50m.

Related: Elon Musk is absolutely, definitely not an alien

That deal has now been signed as part of the Australian government's $550m energy plan.

The plan is for the battery to be built near Jamestown, and paired with Neoen's Hornsdale windfarm. Musk admitted to reporters in Australia that the project had its risks, as it was the largest battery installation in the world "by a significant margin".

He also suggested that the new battery would bring down prices for consumers, while also stabilising the grid.

"You can essentially charge up the battery packs when you have excess power when the cost of production is very low ... and then discharge it when the cost of power production is high, and this effectively lowers the average cost to the end customer," Musk said.

"It's a fundamental efficiency improvement for the grid," he added.

Tesla recently completed an installation of a battery farm in California which has a capacity of 20 megawatts and is designed to discharge 80-megawatt hours of electricity in four-hour periods. µ</s>SYDNEY: Elon Musk's Tesla will build what the maverick entrepreneur claims is the world's largest lithium ion battery within 100 days, making good on a Twitter promise to ease South Australia's energy woes.

The region was hit with a total blackout when an "unprecedented" storm wrecked power transmission towers in 2016, and billionaire Musk in March offered to help with a battery farm.

"This system will be three times more powerful than any system on Earth," Musk told reporters in the state capital Adelaide.

Tesla has built the world's current largest battery, which came online in California in December, Musk said, adding that the South Australian battery would be 100 megawatts - enough to power 30,000 homes.

"This is not a minor foray into the frontier... I'm pretty darn impressed with South Australia willing to do a project of this magnitude that is beyond anything else in the world," Musk said.

"That takes a lot of gumption... I do see this as something that the world will look at as an example."

The battery will be built in Jamestown, 230km north of Adelaide and will be paired with a nearby wind farm run by Neoen, a French renewable energy company, South Australian Premier Jay Weatherill said.

Tesla has agreed to deliver the battery "within 100 days or it is free", he added.

No figures were given for the cost of the contract.

Neoen was set up in 2008 and has projects around the world, from Zambia to Egypt.

It operates Europe's biggest solar energy park in southwest France, which can produce the equivalent annual electricity to supply a town of 300,000 people.

South Africa-born Musk has envisaged Tesla as a company that can help reduce emissions by not only selling people electric cars, but also generating and storing the renewable energy that powers them.

Australia is one of the world's worst per capita greenhouse gas polluters due to heavy use of coal-fired power.</s>Tesla CEO Elon Musk has promised to build the energy storage system for South Australia and get it working within 100 days, or the company will provide it for free.

Elon Musk’s Tesla won a tender to build what the billionaire says is the world’s largest lithium-ion battery system to support South Australia’s blackout-plagued power grid.

“We’re talking about something that’s three times as powerful as the next biggest battery installation in the world,” Musk told reporters in Adelaide.

Tesla will provide 100 megawatts of battery storage by Dec. 1, pairing it with a wind farm at Hornsdale north of Adelaide operated by France’s Neoen, according to a statement on Friday from South Australian Premier Jay Weatherill. The system, which will have capacity of 129 megawatt-hours, will provide enough power for more than 30,000 homes, Tesla said.

Musk four months ago promised on Twitter to build the energy-storage system and get it working within 100 days of a contract being signed or Tesla would provide it free, a vow he backed up on Friday.

“We actually insisted when doing the contract that we be held to the 100 days or it’s free,” Musk said. “That’s what we said publicly, that’s what we’re going to do.”

Should the project be up and running “in the next 100 days, it would likely be the world’s largest lithium-ion battery,” said Simon Habart, a Hong-Kong based research analyst with Bloomberg New Energy Finance. “The competition for primacy will be tight, as projects of similar size are rapidly springing up in Australia, Canada and Japan.”

The project win follows a difficult week for Tesla, which lost about $12 billion in market value after reporting underwhelming sales, and faces increasing competition from Volvo Car Group, which vowed to electrify much of its vehicle lineup over the next few years. Tesla stock rose 1.4 percent to $313.22 on Friday.

“Battery storage is the future of our national energy market and the eyes of the world will be following our leadership in this space,” Weatherill said in the statement. Australia’s largest power generator, AGL Energy, tweeted its support for the deal after it had previously offered a site for Tesla’s battery-storage proposal.

Palo Alto, California-based Tesla, best known for its all-electric Model S sedan, aims to be in the front ranks of the emerging energy-storage market. Besides offering the residential energy-storage units known as the “Powerwall” to customers, Tesla is making much larger-scale energy-storage systems known as “Powerpacks” for commercial businesses and the world’s utilities.

The same lithium-ion battery technology that powers Tesla’s cars is being used to help integrate growing amounts of solar and wind onto electric grids, and the company’s stated mission is to “accelerate the world’s transition to sustainable energy.”

In California, Tesla was selected to provide a 20 MW/80 MWh Powerpack system at Southern California Edison’s Mira Loma substation. Tesla installed the system in three months.

Musk’s pledge to bring battery storage to South Australia thrust him into the middle of a messy political spat over energy policy. A series of power outages in South Australia have raised fears of more widespread blackouts across the nation’s electricity market and raised questions as to why one of the world’s largest producers of coal and gas is struggling to keep the lights on in a mainland state.

Australia is expected to invest A$69 billion ($52.46 billion) in rooftop solar and battery storage by 2040, according to Bloomberg New Energy Finance.</s>Elon Musk's Tesla will build what the maverick entrepreneur claims is the world's largest lithium ion battery within 100 days, making good on a Twitter promise to ease South Australia's energy woes.

Billionaire Musk tweeted an offer to help build a battery farm in March after South Australia was hit with a total blackout when an "unprecedented" storm wrecked power transmission towers in 2016.

"This system will be three times more powerful than any system on Earth," Musk told reporters in the state capital Adelaide.

Tesla has built the world's current largest battery, which came online in California in December, Musk said, adding that the South Australian battery would be 100 megawatts - enough to power 30,000 homes.

"This is not a minor foray into the frontier... I'm pretty darn impressed with South Australia willing to do a project of this magnitude that is beyond anything else in the world," Musk said.

"That takes a lot of gumption... I do see this as something that the world will look at as an example."

The battery will be built in Jamestown, 230 kilometres (143 miles) north of Adelaide and will be paired with a nearby wind farm run by Neoen, a French renewable energy company, South Australian Premier Jay Weatherill said.

Experts said the battery could help transform the renewable energy landscape by addressing the intermittent nature of sources such as wind and solar by pairing them with a large-scale electricity storage system.

"Variability is one of the key challenges in integrating large amounts of renewables into power systems as we try and get towards 100 percent renewables," Ariel Liebman of Monash University's MEMSI energy institute told AFP.

"So we need a balancing mechanism that helps take some excess production when these things are producing a lot and then distribute it into the system when it's needed and there's not so much production."

Musk said it was "common sense that if you have solar you must have battery because otherwise your power is going to be proportionate to how sunny it is".

"I specifically think that the consistently lowering cost of batteries, coupled with renewables, is going to fundamentally reshape the energy landscape much faster than anyone thinks it will," Cal Lankton, Tesla's vice president of global infrastructure operations, added.

Musk acknowledged his company had to overcome the technical risks associated with building a project at such a large scale, but said Tesla was confident of its success.

The high-flying firm, known for producing electric cars, has agreed to deliver the battery "within 100 days or it is free", Weatherill added.

No figures were given for the cost of the contract.

Neoen, which has built major projects around the world since being set set up in 2008, operates Europe's biggest solar energy park in southwest France, which can produce the equivalent annual electricity to supply a town of 300,000 people.

South Africa-born Musk has envisaged Tesla as a company that can help reduce emissions by not only selling people electric cars, but also generating and storing the renewable energy that powers them.

Australia is one of the world's worst per capita greenhouse gas polluters due to heavy use of coal-fired power.</s>Tesla, the electric car business owned by billionaire Elon Musk, is set to build the world's largest ever lithium-ion battery.

Ever the entrepreneur, Mr Musk and Lyndon Rive, the head of Tesla's battery division, proposed building an energy storage facility in South Australia following total blackouts across the state following a storm in March 2016.

South Australia has struggled to access renewable energy supplies and retain power for residents in recent years.

As a maker of electric automobiles, Tesla has also invested heavily in energy storage and solar panel technology - and it believes its technology could develop far beyond vehicles and supply power to the grid.

Mr Musk stressed to Mike Cannon-Brookes, the Australian entrepreneur behind the American technology company Atlassian, that Tesla was capable of meeting South Australia's energy needs.

Mr Musk tweeted that Tesla "will get the system installed and working 100 days from contract signature or is free. That serious enough for you?"

That deal has now been agreed, and will see Tesla manufacture a 129MWh battery in Jamestown, a town with a population of less than 1,500 people, just over 120 miles north of Adelaide.

"This is not a minor foray into the frontier," said Mr Musk. "I'm pretty darn impressed with South Australia willing to do a project of this magnitude that is beyond anything else in the world.

"That takes a lot of gumption," he added. "I do see this as something that the world will look at as an example."

The battery will be paired with a nearby wind farm run by the French renewable energy company Neoen.

It is even larger than the 80MWh battery farm which Tesla completed in just 90 days earlier this year in southern California.

It is not yet known whether Mr Musk's tweet has formed part of the contractual agreement between Tesla and the state of South Australia.</s>South Australia has picked Tesla to install the world’s largest grid-scale battery, which would be paired with a wind farm provided by France’s Neoen, in a major test of the reliability of large-scale renewable energy use.

South Australia, the fifth-biggest state with a population of 1.7 million, has raced ahead of the rest of the country in turning to wind power. Its shutdown of coal-fired plants has led to outages across the eastern part of the nation, driving up energy prices.

The drawback to South Australia’s heavy reliance on renewables has been an inability to adequately store that energy, leading to vulnerabilities when the wind doesn’t blow.

The project is designed to have a storage capacity of 129 megawatt-hours, which is enough to light up 30,000 homes, a Tesla spokesman told Reuters.

Under the terms of the agreement, Tesla must deliver the 100-MW battery within 100 days of a contract being signed or it’s free, matching a commitment made by Tesla Chief Executive Officer Elon Musk in a Twitter post in March.

There will be a lot of people that will look at this, ‘did they get it done within 100 days? Did it work?'” Musk told reporters in South Australia’s capital city of Adelaide.

“We are going to make sure it does.”

The 100-day deadline will begin within a few weeks, a political source said, after a connectivity agreement is reached between South Australia, Telsa, Neoen and the Australian Energy Market Operator.

Musk and a spokesman for South Australia Premier Jay Weatherill declined to reveal the cost of the project.

Musk said a failure to deliver the project in time would cost his company “$50 million or more”, without elaborating.

The battery, designed to provide emergency back-up power if a shortfall in energy is predicted, will be built on site in South Australia, a spokesman for the state government said.

Tesla said in a statement that upon completion by December 2017, the system would be the largest lithium-ion battery storage project in the world, overtaking an 80 megawatt-hour power station at Mira Loma in Ontario, Calif., also built using Tesla batteries.

The neighboring state of Victoria is also seeking 100 megawatt-hour battery capacity, to be installed by January.

Lithium-ion batteries have been in widespread use since about 1991, but mostly on a small scale, such as in laptops and cell phones.

A typical lithium-ion battery can store 150 watt-hours of electricity in 1 kilogram of battery, representing more than double the capacity of nickel batteries.

Its proponents has been pushing to use lithium batteries on a grander scale.

“For lithium technology to take off on a global scale, they clearly need the storage capacity to make sure renewables can deliver 24 hours a day, seven days a week,” said Adrian Griffin, a geologist who specializes in lithium extraction.

Dozens of companies from 10 countries, including privately owned Lyon Group, working with U.S. power company AES Corp, had expressed interest in the South Australian project.</s>* Musk has promised delivery within 100 days or it will be free

* Battery can light up 30,000 homes if there is a blackout (Adds comments from battery industry executive and analyst)

SYDNEY, July 7 Tesla Inc has won an Australian contract to install the world's biggest grid-scale battery in what experts say will be a litmus test for the reliability of large-scale renewable energy.

Tesla CEO Elon Musk, known for his bold approach to cars, clean energy and space exploration, trumped dozens of competing proposals to build the gigantic lithium-ion battery that will serve as emergency back-up power for South Australia - a state racked by outages.

But under the agreement, Tesla must deliver the 100-MW battery within 100 days of the contract being signed or it will be free - a commitment Musk made in a Tweet in March.

"There will be a lot of people that will look at this -'Did they get it done within 100 days? Did it work?'" Musk told reporters in South Australia's capital city of Adelaide.

"We are going to make sure it does."

The project likely involves linking hundreds of smaller battery modules and is "very doable," although the 100-day deadline might be tight, Sankar Das Gupta, chief executive of Canadian lithium-ion battery supplier Electrovaya, told Reuters.

The battery, designed to light up 30,000 homes if there is a blackout, will be built on a wind farm operated by France's Neoen, parts of which are still under construction.

Musk said failing to deliver the project in time would cost his company "$50 million or more" without elaborating.

It will be the largest lithium-ion battery storage project in the world, overtaking an 80 megawatt-hour facility in California that also was built using Tesla batteries.

Over the past three years, South Australia has decided to shut down its coal-fired power stations and instead rely on wind, solar and gas. It has raced ahead of the rest of the country in turning to wind power, which supplies 40 percent of its energy.

The move has been applauded by environmentalists but left the state prone to outages as there is no way to store enough energy when the wind does not blow. In September, South Australia's 1.7 million residents were without power, some of them for up to two weeks, when the grid overloaded and collapsed.

The battery is aimed at getting around the problem of inadequate storage.

"Cost-effective storage of electrical energy is the only problem holding us back from getting all of our power from wind and solar," said Ian Lowe a professor of science at Australia's Griffith University.

"This project is a significant innovation to demonstrate the feasibility of large-scale storage."

Dozens of companies from 10 countries, including privately owned Lyon Group, working with U.S. power company AES Corp , expressed interest in the project.

Now the sector is waiting to see if Musk can make good on his promise.

"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," said a source at a Korean competitor to Tesla, declining to be identified due to the sensitivity of the matter.

Late last year, Tesla took about three months to provide a 20-megawatt energy storage system to a substation owned by Southern California Edison Co, the California utility said.

"The Tesla technology is very mature. It's very well understood," said Haresh Kamath, a battery researcher at the Electric Power Research Institute in California. "It's not a moonshot."

Lithium-ion batteries have been in widespread use since about 1991, but mostly on a small scale, such as in laptops and cell phones.

For their proponents who have long been pushing for grander use, the success of Musk' s big South Australian experiment will be key to greater acceptance.

"For lithium technology to take off on a global scale, they clearly need the storage capacity to make sure renewables can deliver 24 hours a day, seven days a week," said Adrian Griffin, a geologist who specialises in lithium extraction. (Reporting by Colin Packham and James Regan in SYDNEY; Additional reporting by Melissa Wen in SAN FRANCISCO, Yashaswini Swamynathan in BANGALORE and Sonali Paul in MELBOURNE; Writing by Jonathan Barrett; Editing by Edwina Gibbs and Bill Trott)</s>Elon Musk bet a few months ago that his Tesla Inc. could build a grid-connected energy storage system in Australia within 100 days, or he’d eat the costs. Now he has a chance to prove it.

Tesla announced Friday it will build the world’s most powerful lithium-ion battery storage system in the state of South Australia. Musk pledged the project would be completed in 100 days or it’s free.

Tesla, based in Palo Alto, Calif., said it will team up with French renewable energy firm Neoen to complete the project by December in time for Australia’s summer to begin. With 100 megawatts of capacity, the system would provide enough power for more than 30,000 homes. It said the project’s capacity will be three times that of the current biggest such battery installation.

Last September, 1.7 million residents in South Australia were left without electricity after a storm damaged critical infrastructure, and early this year, more blackouts occurred. To prevent further blackouts, the South Australian government sought out a renewable energy solution.

In March, Musk made his system-building wager, going back and forth on Twitter with Australian software billionaire Mike Cannon-Brookes.

At a news conference Friday, Musk said Tesla could end up losing $50 million if the company can’t finish the system in time.

Although Musk is known for his ability to hype his products, his pledge isn’t so far-fetched, said Robert McCullough, an energy consultant who runs Oregon-based McCullough Research.

In January, Tesla unveiled one of the world’s largest energy storage facilities in partnership with Southern California Edison. Using 400 Tesla PowerPack units, the facility can store enough energy to power 2,500 homes. That storage project was completed in 90 days.

“The good news about the equipment is it’s modular,” McCullough said. “If you can install one, you can install 100.”

During the news conference, Musk said large-scale battery applications were the way of the future. “I do see this as something that the world will look at as an example,” Musk said.

“The bottom line is we’re getting close to prime time,” McCullough said.
South Australia finalizes a deal with Tesla, spearheaded by tweets originating from CEO of Tesla Elon Musk, to install a battery system in the state. Tesla said in a statement that upon completion by December 2017, the system would be the largest lithium-ion battery storage project in the world, overtaking an 80 megawatt-hour power station at Mira Loma in California also built using Tesla batteries.