Elon Musk reveals plans to build the world's largest lithium ion battery in Australia

Tesla boss Elon Musk speaks during an official ceremony in Adelaide to announce that Tesla will install the world's largest grid-scale battery in the South Australian stateAAP/Ben Macmahon/via Reuters

Elon Musk's Tesla unveiled plans on Friday (7 July) to produce the world's largest lithium ion battery in South Australia in an effort to help solve the state's energy woes.

The electric car company will partner with French-based renewable energy company Neoen to install the 100MW grid-scale battery by the end of the year.

Paired with Neoen's Hornsdale Wind Farm near Jamestown, South Australia, the system is designed to have a storage of 129 megawatt-hours – enough to light up 30,000 homes.

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It will be three times more powerful than the next biggest battery in the world, Musk told reporters in Adelaide on Friday.

"If South Australia's willing to take a big risk, then so are we," he said.

The announcement comes after Musk made a promise in March via Twitter to build the system and get it working within 100 days of a contract being signed, or Tesla would provide it for free. The project is slated for completion by December 2017.

"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."

Since September last year, the state's population of 1.7 million people have continued to suffer from frequent blackouts and power shortages.

After a connectivity agreement is reached between Tesla, South Australia, Neoen and the Australian Energy Market Operator within the next few weeks, the 100-day deadline will begin, Reuters reports.

Should Tesla fail to meet the deadline, Musk said the project could cost his company upward of $50m (£38.6m). However, the cost of the battery, if delivered on time, has not been disclosed.

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"Working in close collaboration with the South Australian Government and Neoen, this grid scale energy storage project is not only sustainable, but will help solve power shortages, reduce intermittencies, and manage summertime peak load to improve the reliability of South Australia's electrical infrastructure," Tesla said in a statement.

"In addition, Tesla's Powerwall is now being installed for residential customers across Australia and ramping up quickly.

"The same technology that can help stabilize the South Australian grid can also be used by homeowners to collect energy during the day so it is stored and made available day and night, providing uninterrupted power even if the grid goes down."

South Australian Premier Jay Weatherill said the historic agreement will not only bring Tesla to the state but come with "some significant economic spin-offs".

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"South Australia has been leading the nation in renewable energy – now we are leading the world in battery storage," Weatherill said in a statement. "I'm thrilled with the selection of Neoen and Tesla, whose experience and world leadership in energy security and renewables will help South Australia take charge of its energy future.

"Battery storage is the future of our national energy market, and the eyes of the world will be following our leadership in this space."

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