Tesla vice-president for energy products Lyndon Rive told the Australia Financial Review last week that Tesla could supply the battery storage needed in SA to prevent ongoing power shortages.
When asked if this was actually possible, Musk responded that "Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?"
After discussions with Australian prime minister Malcolm Turnbull and SA premier Jay Weatherill later in the week, Musk went on to say that he was "very impressed. Govt is clearly committed to a smart, quick solution".
Tesla aims to provide the technology at a battery pack price of $250/kWh. The plan will only work if Tesla works closely with "government and utility leaders who are strongly committed to trying new approaches", Musk has said.
The battery plans form part of a AU$550 million SA government plan to improve the state's energy security, including building a AU$360 million government-owned 250MW gas-fired power plant to provide emergency back-up power.
The SA government will also encourage increased gas production to ensure more of the state’s gas is sourced and used in SA, introduce an energy security target to encourage the use of energy generated in the state, and use the government's purchasing power through its own electricity contract to attract a new power generator, increasing competition in the market.
"South Australians lost control of the state’s energy system when [the Electricity Trust of South Australia] was privatised by the previous Liberal government, handing control to a private market," the SA government said.
"In recent years, there’s been a lack of national leadership on energy policy, particularly over the question of a price on carbon. This uncertainty has led to a lack of investment in new electricity generation while unviable coal-fired power stations have been closing across the country. This has left the remaining small number of power companies with extraordinary control over the market, pursuing profits at the expense of reliable, affordable power," it said.
South Australia suffered a state-wide power outage in September 2016 caused by problems with the electricity transmission system during a severe storm with high winds, thunder, lightning strikes, hail and heavy rainfall.
After multiple faults in a short period, 315MW of wind generation was disconnected from the system, affecting the region north of Adelaide. That increased the flow in the main state interconnector to make up the loss, but this caused the interconnector to overload. An automatic protection mechanism then kicked in to protect the interconnector, and power was lost to the whole state, the Australian Energy Market Operator said.