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According to Premier Jay Weatherill, the battery will protect South Australia from the kind of energy crisis which famously blacked out the state.
Tesla CEO Elon Musk confirmed a much-publicized promise to build the battery within 100 days, or do it for free.
The 100-megawatt (129 megawatt-hour) battery should be ready this year.
Elon Musk said in Adelaide on July 7: “There is certainly some risk, because this will be largest battery installation in the world by a significant margin.”
He also said that “the next biggest battery in the world is 30 megawatts”.
According to South Australia’s government, the Tesla-built battery, paired with a Neoen wind farm, will operate around the clock and be capable of providing additional power during emergencies.
“It will completely transform the way in which renewable energy is stored, and also stabilize the South Australian network as well as putting downward pressure on prices,” Premier Jay Weatherill said.
Elon Musk’s 100-day pledge will begin once an electricity grid interconnection agreement has been signed.
Tesla has been expanding its battery business alongside its car production.
South Australia has suffered from blackouts since September 2016, leading to a political spat over energy policy.
The row culminated in a confrontation between Jay Weatherill and a federal government minister at a press conference in March.
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