The government of South Australia wants to create the world’s largest “virtual” power plant, and it’s tapping Elon Musk’s Tesla, Inc. to do the job.
On Sunday, Jay Weatherill, the state’s premier, announced the plan, which will see Tesla install its solar panels and Powerwall 2 batteries in 50,000 homes across South Australia over the next four years.
The individual systems will be linked together via software, forming one giant, decentralized network. Energy generated by the network that isn’t used by the homes will be sold back to South Australia’s power grid, which is financing the project.
The government says Tesla workers will install the hardware at no cost to residents. Further, it claims participating households will see their energy bills slashed by 30 percent.
“We will use people’s homes as a way to generate energy for the South Australian grid, with participating households benefiting with significant savings in their energy bills,” Premier Weatherill said Sunday. “More renewable energy means cheaper power for all South Australians.”
The state has been in the midst of an energy crisis since 2016 when a storm knocked out its entire power grid and left 1.7 million South Australians without electricity. Recurring blackouts have plagued the region since, causing energy prices to soar.
It was Elon Musk who stepped up to help, vowing last year that Tesla could create an electricity storage plant for South Australia in less than 100 days. Musk made good on his pledge, and the world’s largest lithium-ion battery went live at the Hornsdale Power Reserve in early December.
That 100-megawatt storage system now serves as a backup for South Australia’s power grid, and within weeks of its installation had already effectively responded to a pair of outages in the region.
The energy storage capacity of this new decentralized network, which will be 650 megawatts once completed, will dwarf that of the Hornsdale battery, the South Australian government says.
The rollout of the program will be assisted by a $2 million grant from the government and a $30 million loan from the state’s Renewable Technology Fund. Solar panels and Powerwall batteries will be installed in the first 600 homes by the end of 2018.
Tony Wood, energy program director at the Grattan Institute, a Melbourne-based think tank, told Bloomberg the project is something the renewable energy sector should definitely keep an eye on:
“Tesla is gaining a reputation here for getting things done. If South Australia can sort through the funding and technical side of this project, then it’s worth doing because we’ll learn a lot more about rolling out distributed solar and batteries at scale.”
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