Tesla Motors (NASDAQ:TSLA) has announced the building of a battery system which is being seen by many industry observers as a landmark project that could usher a new age of storage on the electric grid. According to the company, the new system will have the largest output of any existing lithium-ion storage facility when complete and be installed in one of Tesla’s substation to generate energy during peak hours. The new project was mandated by the California Public Utilities Commission and will be developed in close collaboration with utilities company Southern California Edison.
In October, a rupture at California’s Aliso Canyon natural gas reservoir dumped 1.6 million pounds of methane into the atmosphere, causing thousands of residents fleeing. It was the largest recorded natural gas leak in the US history.
Before the catastrophic event that displaced more than 8,000 people, Aliso Canyon provided fuel to power plants, powering up thousands of homes in the area wherein temps can climb up to sweltering 100 degrees during the summer season. Demand for energy is also at the highest during the winter season when homes and offices use natural gas for heat.
When Tesla’s big battery system becomes operational by Dec. 31, it will have a storage energy capacity of 80 megawatt/hours, enough to power more than 2,500 households for a day, Tesla said.
The company did not say how much SoCal Edison’s contract was worth.
Separately, Tesla also announced that it will provide a California mall with 20 megawatts of batteries. Incidentally, the automaker has a store located near the mall, which is owned by real estate company Simon.
The battery installation requires two systems to work. According to Mona Benisi of the Simon’s Sustainability, the batteries feature “one 250 kW / 500 kWh system and one 500kW / 1MWh system totaling 750 kW / 1.5 MWh of capacity.”
In a press release, Benisi said the installation is an example of how the real estate company that owns the mall is dedicated to “incorporating energy efficiency into its business practices as part of its overall Sustainability framework.” She added that the Tesla Powerpack – high capacity batteries that are powerful enough to light up commercial buildings, offices, shopping centers, and houses offers enough power to satisfy the energy demand of the Southern California mall. Benisi also noted that the battery project will allow the real estate company to “scale energy efficiency and savings across multiple centers.”
Getting back to Tesla’s new battery system, the company said it will be charged when the demand for energy is low and then utilize once the demand picks up during the afternoons where most homes crank up the air conditioning.
Tesla’s newest project could prevent recurring blackouts during peak hours. Simon expects to save thousands of dollars per year on energy consumption by using Tesla battery packs during off-peak hours. While Benisi stopped short of disclosing the total cost of the project, an electrek.co report estimates each Tesla battery pack to cost about $880,000. However, same report noted that Tesla reduced the price of its battery.
In 2015, the automaker announced that it would start selling Powerpacks. The power packs, which have enough juice to provide power to 1,000 Tesla vehicles, are made from lithium-ion by Panasonic. It is the same batteries that Tesla uses for its electric cars. Tesla’s high capacity batteries are assembled in its Reno, Nevada Gigafactory. But the electric carmaker revealed that eventually, the power packs will be assembled on site.