Tesla wins massive power grid contract

US-based electric vehicle manufacturer Tesla Motors has won a large power storage contract in California.

The company will be contracted to supply 20MW of power storage for Southern California Edison’s power grid after winning a competitive bidding process.

In order to achieve this, Tesla will use similar technology to its lithium-ion ‘Powerwall’ battery packs however scaled-up to a much larger size.

Once complete this will be the largest ever installation of lithium-ion power storage in the world.

Specifically the Tesla-built system will be installed at the Southern California Edison Mira Loma substation.

According to the company, when fully charged, these batteries will hold enough energy to power more than 2,500 households for a day.

“Working in close collaboration with Southern California Edison, the Tesla Powerpack system will be a landmark project that truly heralds the new age of storage on the electric grid,” the company explained in a statement.

Tesla Gigafactory to delivery system

Tesla claims that, using its new Gigafactory, this entire system will be able to be produced and set up in under 3 months. As well, the economies of scale that it allows were likely also instrumental in bringing the price down low enough for Tesla to win the contact itself.

While the system can be built in 3 months, it is unclear when exactly battery production and its eventual installation will begin.

Furthermore, neither Tesla, nor Southern California Edison has provided information on the total value of the system. Bloomberg however has reported that a 2MW system installed by Tesla costs around $2.9 million, so the 20MW system is unlikely to cost more than around $30 million.

The stated aim for the system is to store power to alleviate blackouts during periods of peak use.

Such blackouts have been made more likely due to the closure of the Aliso Canyon gas facility following a catastrophic reservoir rupture, meaning the entire system is facing a capacity shortfall.

Should this energy storage project be successful it would certainly pave the way for a wide scale expansion of lithium-ion grid storage, and companies producing such batteries could stand to make extensive profits.