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Tesla secures major California Grid energy contract

Fri 16 Sep 2016

U.S. electric automaker Tesla Motors has won a huge deal with utility company Southern California Edison, which will see the innovative firm construct a 20 megawatt battery storage facility in Mira Loma, California.

When the build is completed towards the end of the year, the ‘Powerpack’ lithium ion battery system will be able to store over 80 megawatt hours of energy – enough to power more than 2,500 homes for a full day.

‘The Tesla Powerpack system will reduce the need for electricity generated by natural gas and further the advancement of a resilient and modern grid,’ Tesla wrote in a blog post.

The contract sits under a state-backed plan to improve grid reliability and avoid power shortages. The strategy was initially established in 2013, and was given a big push following a leak at a natural gas resevoir in Aliso Canyon in October 2015 – the biggest leak of its kind in U.S. history – which massively threatened energy supplies in the region.

The California Public Utilities Commission in 2013 asked that three utilities companies, Pacific Gas and Electric Company, Southern California Edison and San Diego Gas and Electric, install 1,325 gigawatts of storage capacity over the next eight years.

Alongside Tesla, three further companies have settled contracts to provide a further 27 megawatts of battery storage to Southern California Edison. However, the Tesla Powerpack will be the only system the utility firm owns.

While the financial terms of the deal were not disclosed, on the news of the deal, Tesla shares jumped by as much as three percent.

Tesla CEO Elon Musk is a keen advocate for the use of green energy, and is dedicated to his long-term vision of transforming Tesla from an electric car manufacturer to a clean energy company. This ambition is also noted in his recent interest in acquiring solar firm SolarCity, of which he is also chairman and largest shareholder.

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