Tesla’s Expansion of the Hornsdale Power Reserve Comes with a Price

March 05, 2020 by Luke James

The world’s biggest lithium-ion battery, built by Tesla and housed in Southern Australia, is scheduled for a 50 percent increase in capacity later this year.

Operators of the battery decided that this expansion is needed to help stabilize the country’s fragile electricity grid. During the summer months when energy usage soars, the grid struggles to keep up. At times, the demand for energy can be so high that rolling blackouts are forced in order to help the grid cope. 

This was the case in 2016 when a series of blackouts caused energy disruptions in the south. In response, Tesla was awarded a contract to build the ginormous lithium-ion battery the next year, famously promising to build it within 100 days or it would be free. True to his word, it was completed within this timeframe in November 2017


Hornsdale power reserve in Australia.

The expansion of the Hornsdale Power Reserve seeks to demonstrate the benefits that grid-scale batteries can provide to national electricity management. Image used courtesy of the official Hornsdale Power Reserve website.  


Boosting the Battery by 50 Percent

The battery, located at the Hornsdale Power Reserve, currently has a capacity of 129 MWh and an output of up to 100 MW. Today, over two years later, it is still the world’s largest lithium-ion storage battery. 

Neoen, a French renewables company, announced last year that it had contracted Tesla to expand the capacity at the Hornsdale facility by 50 percent. To support the expansion, the Australian government has pledged up to AU$72 million in grants and loans, a move that threatens rival projects that are attempting to steal the world’s largest crown. 

Currently, the Li-ion battery is connected to a wind farm and has enough capacity to supply roughly 30,000 homes with an hour’s worth of power. Tesla, Neoen, and the Australian government are hoping to improve this by adding 64.5 MWh of capacity and 50 MW of output. The upgrade will also see the addition of Tesla’s “Virtual Machine Mode”, which will enable the system to maintain the power grid’s inertia—this will provide stability during periods of fluctuating supply and demand. 


Horsdale power reserve graphic detailing the evolution of the facility.

A graphic depicting the development evolution of the Hornsdale Power Reserve. Image used courtesy of the official Hornsdale Power Reserve website.

Rapid Expansion Comes at a Price

Over the last few years, Australia has seen a boom in renewable energy. It currently represents a fifth of the country’s energy generation, and the country has deployed wind and solar generation up to five times quicker than the U.S., China, and the EU on a per capita basis. Neoen said in its first year alone, the Hornsdale battery saved consumers AU$50 million. 

This expansion comes at a price, however. In 2018, Australia’s Energy Market Operator warned that a surge in renewable energy projects could destabilize the grid and cause similar issues to those seen in 2016. 

Neoen has remained undeterred, however. The company recognizes “the critical and multiple roles that batteries will play in the grid of the future…” and is planning another large project for South Australia – a 900MW battery that will be connected to both solar and wind farms. 

“We see grid-scale batteries as a critical part of the next wave of investment that will support the rapid and unprecedented changes we are seeing across Australia’s electricity systems,” said CEFC CEO said Ian Learmonth in a press release

Meanwhile, the expansion of the Hornsdale facility is earmarked for completion later this year.