Tesla Megapack To Help Power Western Australia's Transition From Coal To Clean Energy

French renewable company Neoen SA NOSPF said on Monday that it has notified EV giant Tesla Inc TSLA to start making megapack units.

What Happened: Neoen won a services contract from the Australia Energy Market Operator (AEMO) to provide 197 MW of storage capacity for 4 hours.

The service will be provided by Stage 1 of Collie Battery sized at 219 MW / 877 MWh and consisting of 224 Tesla Megapack 2XL units, the company said in a statement.

The battery will be located near the town of Collie in Western Australia and is expected to be operational in Q4 2024.

The AEMO services contract will run for two years starting Oct. 1, 2024. The contract is part of AEMO’s intent to utilize rooftop solar in Western Australia given the retirement of coal power plants.

"As Western Australia's major electricity system transitions away from coal-fired generation, critical investments are needed in low-cost renewable energy backed by firming generation, such as batteries and gas, and augmentation of the transmission network,” AEMO CEO Daniel Westerman said.

Neoen’s collie battery will provide energy security during the transition to renewables, he added.

Why It Matters: The Megapack is a battery that can store over 3MWh of energy or enough to power an average of 3,600 homes for one hour. They are also part of Victoria Big Battery — a 212-unit, 350 MW system — providing backup protection to Victoria in Australia.

Tesla's energy and storage business reported revenue of $1,529 million in the first quarter, up from $616 million in the year-ago period.

In 2017, Tesla completed installing the world’s largest lithium-ion battery in South Australia, with the company’s power packs installed at a wind farm owned by Neoen.

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Photo courtesy: Tesla