Tesla has reached its first deal to deploy a grid-scale battery power plant in China. This victory represents an important step for the electric vehicle maker. Once completed, this ambitious project is expected to be the largest integrated bus and rail transit hub in the country. The Shanghai municipal government and China Kangfu International Leasing, a state-owned financing vehicle, completed the deal. It is currently valued at 4 billion yuan, just over $556 million.
The pilot project is expected to serve the growing demand for grid-scale battery deployments, which have taken off with rapid acceleration across China. Tesla’s facility will play an important role in expanding the country’s energy storage capacity. That will assist Beijing in achieving its stratospheric target of adding almost 5 gigawatts of battery-powered electricity supply by the end of 2025. On the whole, China expects to deploy 40 gigawatts of battery-powered electricity supply in the same period.
Their masterplan Tesla made the announcement on Weibo, one of China’s most popular social media platforms. They praised its ability to start revolutionizing how cities manage electricity that they consume. The company called the grid-side energy storage power station a “smart regulator” for smart urban electricity. It provides a competitive marketplace that ensures the least-cost resources meet demand.
“The grid-side energy storage power station is a ‘smart regulator’ for urban electricity, which can flexibly adjust grid resources,” – Tesla (via Weibo, according to Google translation)
The importance of this project is highlighted by the recent surge in the popularity of energy storage systems around the world. In 2023, capacity for these systems jumped by 42 GW. This was almost twice the amount of increase we experienced last year! As China continues to develop its energy landscape, two domestic companies have made substantial strides in battery development and manufacturing, with one holding approximately 40% of the global market share.
Tesla’s Megapack technology will be instrumental in making this new complex the world’s largest production facility for Megapacks. Each Megapack is capable of delivering 1 megawatt of power for up to four hours. This capability will provide a game changing impact on the reliability and efficiency of urban electricity supply.
Tesla’s new initiative aims to address the urban power supply conundrum. It is intended to ensure safe, stable and effective electricity consumption in all cities in China.
“Effectively solve the pressure of urban power supply and ensure the safe, stable and efficient electricity demand of the city,” – Tesla (via Weibo, according to Google translation)