Tesla Inc. (NASDAQ:TSLA) and Pacific Gas & Electric Company (NYSE:PCG) have commenced the construction of one of the biggest lithium-ion battery storage system in Monterey County. 

Tesla and PG&E commence construction of 182.5 MW energy project

The Moss Landing, Monterey project will store up to 182.5 MW and will comprise of 256 Tesla megapack battery units at the PG&E substation installed in 33 concrete slabs. Every unit will house batteries as well as equipment for the conversion of power in a single cabinet. This project is expected to be completed with energization commencing in early 2021, and full commercial operations of the project are expected in Q2 2021. PG&E and Tesla will design, construct, and maintain the project with the utility company operating the project.

This will mark the first step in the massive battery storage system pipeline of PG&E. The embattled utility company has also signed another 300 MW storage system contract at the location and will likely hit a capacity of 1.2 GWh. The second system will be larger than the Tesla project, but there is an option of upsizing, which will effectively increase the project under construction to 1.1 GWh.

Energy storage project to save costs

PG&E’s SVP of Energy Policy and Procurement Fong Wan stated that battery energy storage is very vital in improving the overall efficiency of the electric grid. It is also important to enhance the reliability and integration of renewable resources while minimizing over-dependence on the generation of fossil fuels. Wan added that the project will serve as an option to expensive, conventional wire solutions, leading to lower costs for customers.

Interestingly the Moss Landing project will store and dispatch around 730 MWh of energy to the grid for up to 4 hours of peak demand. According to California Independent System Operator, 1 MW is adequate to serve around 750 homes at ago. The company says that the project will save over 100 million in its 20-year life compared to other projections for power supply if the battery energy system was not in place.