Tesla (TSLA) wins contract for new giant battery in Australia

Tesla (TSLA) has won a contract to build another giant battery system in Australia — even bigger than the first one.

The project in South Australia has come to be known as the ‘Big Tesla Battery’.

The Big Tesla Battery originally had a capacity of 100 MW/129 MWh with Tesla Powerpacks until it was recently expanded by adding 50 MW/64.5 MWh of capacity at the site — bringing the total to 150 MW/193.5 MWh.

It provides the same grid services as gas peaker plants, but cheaper, quicker, and with zero emissions through its battery system.

It has been a massive success for South Australia as it is estimated to have saved $40 million during its first year in operation.

Now they want to replicate that success in Victoria on an even bigger scale.

Tesla has again partnered with Neoen, a French renewable energy company, to deploy a 300 MW/450 MWh in Victoria.

This new battery system is going to have about twice the capacity as the big battery is South Australia.

Like the previous project, Neoen is going to own and operate the battery system, which they are going to buy again from Tesla.

In order to facilitate the project financially, the Australian Energy Market Operator (AEMO) has already reserved a large capacity from the project:

“Under the contract, AEMO will reserve 250 megawatts (MW) from Neoen’s 300 MW battery to operate in a control scheme to increase the capability of the Victoria to New South Wales Interconnector (VNI) and respond to unexpected network outages in Victoria from November 2021.”

They are going to pay Neoen $84 million for the contract.

AEMO Managing Director and CEO, Audrey Zibelman:

“AEMO’s competitive procurement and evaluation process attracted significant interest and a positive outcome for Victorians. Neoen’s solution, developed with Tesla and AusNet Services, on a unit cost basis, was a significantly more cost competitive and attractive market response than other major battery developments in Australia,”

Neoen is expected to use Tesla Megapacks at the project, which aims to be deployed and operational by the end of 2021.

The capacity of the new big Tesla battery is going to allow AMEO to “safely optimize interconnector flows and dispatch other generation and storage within Victoria to keep the system stable and secure.”