After a natural gas leak lead to the California Public Utilities Commission to demand utility companies to find utility-scale energy storage solutions that could be operational by December 31, 2016, Tesla was selected to provide a 20 MW/80 MWh Powerpack system at the Southern California Edison Mira Loma substation. Tesla was the only bidder awarded a utility-owned storage project out of the solicitation. Upon completion, this system will be the largest lithium ion battery storage project in the world, Tesla said.
Edison and other California utilities are under a 2013 order by the state Public Utilities Commission to install 1.3 gigawatts of storage capacity by 2020.
Upon completion, this system will be the largest lithium ion battery storage project in the world. When fully charged, this system will hold enough energy to power more than 2,500 households for a day or charge 1,000 Tesla vehicles.
Tesla's Gigafactory will manufacture, ship, install and commissioned the system in three months. The system will charge using electricity from the grid during off-peak hours and then deliver electricity during peak hours to help maintain the reliable operation of Southern California Edison's electrical infrastructure which feeds more than 15 million residents. By doing so, the Tesla Powerpack system will reduce the need for electricity generated by natural gas and further the advancement of a resilient and modern grid.
The deal fits into Tesla Chief Executive Officer Elon Musk's long-term vision of transforming Tesla from an electric car company to a clean-energy company. That's the same motivation behind his pending deal to acquire SolarCity Corp., the rooftop solar company founded by his cousins, of which he is also chairman and the largest shareholder.
In total megawatt hours, the Tesla batteries will make up the biggest lithium-ion battery project in the world, though it will soon be surpassed by others under contract, according to data compiled by Bloomberg New Energy Finance. A Tesla spokeswoman declined to comment on the value of the 20 megawatt deal. According to Tesla's website, a 2-megawatt Tesla battery system costs about $2.9 million, and any contracts greater than 2.5 megawatts must be negotiated directly with the company.
Watch the Bloomberg.com video, Here's Why Tesla Is Building Batteries for Your Home, here.