Australia switches on Victoria Big Battery powered by Tesla Megapacks


A Tesla Megapack in Moss Landing, California

Andrew Evers | CNBC

One of the world’s largest battery-based energy storage systems, powered by Tesla’s utility-scale Megapack batteries, began operating in the Australian state of Victoria on Wednesday.

Large energy storage systems based on lithium-ion batteries have the potential to prevent blackouts and let utilities store and use more energy generated from renewable but intermittent sources, like solar or wind.

Paris-based renewable energy giant Neoen developed the facility with partners Tesla Energy and AusNet, with some construction by Cimic Group’s UGL. It has enough capacity to power one million homes for half an hour, according to the web site for the project.

Lily D’Ambrosio, Australia’s Minister for Energy, Environment and Climate Change, said in a tweet on Wednesday in Australia, “The Victorian Big Battery is here. It’s the biggest battery in the southern hemisphere — safeguarding our energy supply through hot days, driving down electricity prices and supporting our massive renewable energy build. Victoria, you should be proud.”

She also said, according to a report in the Australian daily newspaper The Age, that 80% of the system’s capacity will be reserved for moments when Victoria’s power supply is under high stress. In those situations, the big battery should be able to power more than 650,000 homes for an hour.

While that doesn’t sound like a terribly long time, even a short reserve of backup power can make a big difference to a large population.

After a failure, grid operators typically use generators to supply electricity to power plants for emergency “black starts” so they can restart their own operations and continue supplying power to homes and businesses.

Having a reserve of energy in a giant, lithium-ion battery based energy storage system can keep the lights on at homes and businesses while grid operators deal with issues at the plant. Or, energy storage systems can serve as black start resources themselves.

Before it was switched on in July 2021, a fire impacted two of the Tesla Megapacks that power the Big Battery. No injuries were reported, though the fire triggered a toxic air alert to surrounding neighborhoods.

After that, Neoen said that Tesla took “mitigating actions” based on a root cause analysis conducted jointly. For example, Tesla made changes to its Megapack firmware and monitoring systems at the site, Neoen said at the time.

Tesla’s energy division has not been a profit engine for the company in recent years. However, executives described increasing demand for the company’s energy storage products including the Powerwall for homes, Powerpack for commercial facilities, and utility-scale Megapacks during the company’s third-quarter earnings call.

During the quarter, Tesla generated $806 million in revenue from its energy division, which combines solar and energy storage products. Costs of revenue for Tesla Energy rose during the third quarter to $803 million, meaning Tesla Energy squeaked out a thin profit. By way of comparison, automotive revenues during the quarter topped $12 billion, with automotive cost of revenues amounting to $8.4 billion.

The company said in its financial filing for that period:

“We continue to increase the production of our energy storage products to meet high levels of demand, including beginning construction of our Megafactory in Lathrop, California, but such production is also sensitive to global component constraints. For Megapack, energy storage deployments can vary meaningfully quarter to quarter depending on the timing of specific project milestones.”

The Victorian Big Battery should bring in revenue for that division now that it is switched on.

This article was originally published on CNBC