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Can giant Tesla batteries solve South Australia's energy woes?

Desperate for a more stable energy supply, the state seems willing to give Elon Musk鈥檚 technology a try. He鈥檒l have 100 days to deliver.

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Marcio Jose Sanchez/AP/File
Elon Musk, chief executive officer of Tesla Motors Inc., talks about the Model X car at the company's headquarters, in Fremont, Calif., Sept. 29, 2015. The billionaire has offered to help the state of South Australia solve its energy crisis within 100 days 鈥 or provide the energy for free.

As the United States looks back on an unusually warm winter, Australia is reeling from what climate scientists have dubbed 鈥.鈥 A total of 205 temperature records were broken Down Under聽in a 90-day period.

The sweltering heat couldn鈥檛 come at a worse time for the state of South Australia, often referred to as S.A. last May, taking with it 520 megawatt-hours of generating capacity. The plant鈥檚 owners with subsidized renewable energy.

But sun and wind power to meet the state鈥檚 energy demands. As a result, SA鈥檚 overtaxed power grid , , and policymakers are struggling to find a way out.

鈥淭here are potential solutions,鈥 , predicting that 鈥渁s market prices continue to increase, more customers will take power into their own hands, and generate or store their own.鈥 In doing so, however, they could shrink power companies鈥 revenue and make supply less predictable: 鈥渕ak[ing] the rest of the grid less stable for those who depend on it.鈥

As this bleak assessment of SA鈥檚 dilemma hit the web, Elon Musk stepped in with a novel solution: Build a giant Tesla battery pack to store excess power, then dole it out when demand spikes.

The idea was first floated by Lyndon Rive, Tesla鈥檚 energy products vice president. While visiting a power substation near Melbourne earlier this week, Mr. Rive that South Australia needs within 100 days.

While Rive wasn鈥檛 the first to propose building more storage, Tesla鈥檚 high profile drew a response. 鈥?鈥 Australian billionaire Mike Cannon-Brookes asked Mr. Musk via Twitter. 鈥淚f I can make the $ happen (and politics), can you guarantee the 100 MWH in 100 days?鈥

鈥淭esla will get the system installed and working 100 days from contract signature or it is free,鈥 Musk replied. 鈥淭hat serious enough for you?鈥

To which Mr. Cannon-Brookes answered, 鈥淵ou鈥檙e on mate.鈥

While Musk has a reputation for audacious goals, there鈥檚 reason to think this one isn鈥檛 typical Silicon Valley bravado. The company has just rolled out its $5,500 Powerwall 2 high-capacity battery, manufactured in a Nevada 鈥淕igafactory," which marks a major increase in storage capacity over existing models. 聽

According , the Powerwall 2 鈥渂rings closer the tipping point at which batteries penetrate the mass market as solar panels have done.鈥 That鈥檚 not only good news with rooftop solar, but also for power companies, who could stack the batteries to create massive energy banks.

And Tesla has already proven itself able to build these kinds of facilities. This past January, Tesla to build an 80 MWh battery facility in California, providing a backup power source that was sorely needed after a 2015 methane leak put the Aliso Canyon gas storage facility out of commission.

But despite recent progress, the technology hasn鈥檛 had much time to prove itself. 鈥淪torage is a piece that鈥檚 been missing on the grid for 100 years, Tesla鈥檚 chief technology officer, J.B. Straubel, . 鈥淭his wasn鈥檛 really at all possible five or 10 years ago. Storage is quite a new thing.鈥

In a sign of just how new, Prime Minister Malcolm Turnbull鈥檚 government had been instead eyeing pumped hydropower to alleviate S.A.鈥檚 energy woes. , or about $15 million, for research into the 1920s-era technology, which , then allowing it to flow through generators at a constant rate.

Large-scale batteries have some ground to make up. The technology鈥檚 risks were made clear in the early 2010s, when a battery installation near an Oahu wind farm in Hawaii聽caught fire three times in just 18 months of operation. After that mishap, , 鈥渋nvestment in battery storage all but dried up for a few years.鈥

But now, South Australia, desperate for a more stable energy supply, seems willing to give Mr. Musk鈥檚 technology a try. And if he can't deliver in 100 days, the state will expect him to pick up the tab.聽

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