When fully charged, the Tesla ‘Powerpack’ will store enough energy to power 8,000 homes for 24 hours, or around 30,000 homes for about an hour during a blackout.
Tesla's chief executive Elon Musk originally made the offer via Twitter to build the facility after South Australia suffered a series of ’load shedding’ blackouts in February, as well as a state-wide blackout in September 2016 that left 1.7 million people without power.
Load shedding blackouts occur when demand outstrips supply, and the Australian Energy Market Operator orders power companies to switch off electricity to customers to protect the grid.
The state will have the right to use the battery array's entire output to avoid load shedding events.
The AU$550m project is part of a wider package of projects aimed at guaranteeing the energy delivery in the state, which is heavily dependent on renewable energy, including the building of a 250MW gas-fired generator, expected to cost AU$360 million, which is due to come online this summer to provide extra power.
Musk had said the battery would be free if it was not installed within 100 days of signing a contract for the project in September, stating that if he had failed to deliver on his promise he would have cost him “probably $50 million or more”.
It appears that Tesla will meet the 1 December deadline for installation of the battery array, which will be connected to a wind farm run by French renewable energy company Neoen.
Although it will undergo an initial testing phase, the battery array will provide "system security services" as soon as it is switched on.
South Australia’s Premier, Jay Weatherill, said: “The world's largest lithium ion battery will be an important part of our energy mix, and it sends the clearest message that South Australia will be a leader renewable energy with battery storage.”