“The technology is there:” Batteries are reinventing the grid and leading way to 100 pct renewables
The Hornsdale battery. AAP IMAGE
Giles Parkinson
Jun 11, 2025
Battery, Storage
The head of Tesla Energy in Australia, Josef Tadich, well remembers the day in 2017 that his team learned they had been mandated to build the now famous Tesla big battery in Hornsdale, promised by their boss Elon Musk to be delivered in just 100 days, soon after the statewide blackout in South Australia.
“There was kind of a stunned silence in the room,” Tadich says, not so much because of the speed they had promised to deliver the project – although that was challenging enough – but because of the scale.
No one had built a battery in the world that big, or anywhere close to it. Tesla Energy itself had only been set up in Australia less than two years earlier – Tadich was the very first employee – and up to then it had deployed a mere handful of C&I projects using a few 50 kW Powerpack batteries.
Now they had to do something at a scale – 100 MW and 129 MWh – and a speed and a level of sophistication that no one had imagined. And it meant that the market operator and grid owners had to change the way they thought about the operations of the National Electricity Market, Australia’s main grid.
“We had to redefine the way a generator worked in the NEM,” Tadich says in an exclusive interview with Renew Economy and its weekly podcast, Energy Insiders. “That was a pivotal moment in how we how we viewed the energy transition.”
The Tesla big battery at Hornsdale was delivered on time, and quickly made its impact on the market – smashing the cozy little gas cartel over the frequency control market, stepping in to stabilise the grid when big coal generators failed or when networks tripped.
But it was the speed, accuracy and flexibility of the technology that had the biggest impact – then, and now, as grid experts seek to negotiate the path to a grid that is free of fossil fuels, and is no longer dependent on spinning machines.
Tadich remembers that it was the speed and versatility of the battery technology and the inverters that stunned the experts and the grid and market operators. They had not imagined – and the rules had not allowed for – a machine could be a generator (discharging) one second, and a load (charging) the next.
“How do you go from plus 30 megawatts to minus 60 megawatts so quickly?” Tadich remembers one asking.
At one meeting with the grid operators, it was suggested that the speed of response of big batteries might be one second, or less. But in reality it was in milliseconds, and Tesla initially had to deliberately slow down the response so everyone could understand what was going on.
“I think that AEMO (the Australian Energy Market Operator) really led the way there in the way the system operates, and every system operator in the world was and is watching,” Tadich says. “There was a lot of pressure when you’re doing that, but we paved the way.”
It’s rare that senior Tesla executives provide interviews to the media, and this is Tadich’s first. But as Elon Musk grabs headlines for a lot of other reasons, Tesla the company is keen to show that it is still “on mission” – whether it be leading the path to electric transport, or providing the essential glue for an all-renewable grid.
And the interview with Tadich comes at a critical time, when Australia finds itself on the cusp of being the first major grid preparing to operate not just on an all renewable basis, but all inverters as well.
The debate in the energy circles about the power engineering issues in this transition is intense, and the challenge has been compared to trying to change engines in a plane in mid-flight. There is no room for failure, and there is no room for second guessing. The lights simply have to stay on.
And in that sense, Australia continues to be at the cutting edge of this transition from coal and gas, and from centralised generation to a distributed, bi-directional grid. From that first Tesla big battery at Hornsdale, Australia has continued to lead.
Tadich notes that Australia was the first – and as far as he knows the only – country to host more Powerwall household batteries than Tesla EVs, which gives you some insight into what areas and technologies Australia is leading in, and what’s areas it is not.
And that trend is confirmed by the company’s recent annual report for Australia, which showed Tesla Energy’s annual revenues leapt five fold in 2024 to more than $2.5 billion as the battery business surged ahead, while the EV business has actually suffered a decline in revenues.
Musk has long predicted that energy will be a bigger business than the electric car business. Australia is the first country in the world where this has actually happened. And it is hard to imagine the trend reversing.
And the scale of the technology has flipped again. The newest Tesla battery, at Collie in Western Australia – at 560 MW and 2,240 MWh – has nearly 20 times the storage of the first Hornsdale battery, and even bigger battery projects are on the drawing board.
The storage duration has moved from one hour to two hours, to four hours, and now to six and eight hours. Tesla is building one of the first big 8-hour batteries at Wellington.
This progression is mostly a function of cost – the price of battery cells has plunged and big civil construction projects like pumped hydro have surged. But the real breakthrough, Tadich says, is once again on the technology front and what the inverters can actually do.
The first battery at Hornsdale was mostly focused on frequency control and grid support. New projects like the giant Collie battery are focused on time shifting rooftop solar from the middle of the day to the evening peaks, and others are acting as giant “shock absorbers” that allow transmission lines to operate at full capacity.
Crucially, the Hornsdale battery has also led the way in the development and roll out of grid forming battery inverters, which are now the de-facto choice for new battery projects, and which Tadich says fundamentally change the game because they redefine how a grid operates.
“Power systems are the most complex systems which we’ve created as humans, right? So they, I mean, the NEM itself is one of the things, probably the longest and skinniest power system in the world,” Tadich says.
And batteries, he says, can solve the fundamental problem of how to deliver the services traditionally provides by “synchronous” generators and spinning machines, and how to redefine exactly what is needed in a grid that will be almost wholly dependent on wind and solar for bulk power and inverters to keep it all together.
Grid forming inverters are complex technologies, but they are essentially the same technology in your household battery that allows homes to continue producing power off grid, when the power goes out. It’s the same principle for small micro-grids, and remote mines. And Tadich says the same rules apply for big grids too.
“I think as we move forward …. ten years from now, I feel like the majority of the grid’s system strength will be provided by grid forming inverters,” Tadich says.
“Purely because one of the great things about a battery is that even when it’s sitting there doing no dispatch, it’s providing the inertia, 24/7, whereas a synchronous generator needs to be spinning, needs to be running or dispatched.
“With grid forming inverters, we’re changing fundamentally the way we’re generating energy and consuming energy as a society.”
It’s one thing to say it, even to prove it.
It’s quite another to bring a whole energy eco-system, with its vested interests, its market rules, its complex regulated environment, its long term planning, its social licence issues and the political economy along with it, particularly when one side of politics can’t bring itself to admit that batteries are actually a thing.
In the coming year, Australia faces several landmark moments, with the Nelson review on bringing the markets up to speed and into the new century, and AEMO rolling out the latest edition of its multi-decade planning blueprint.
Everyone has an opinion, and Tesla has theirs. It has already published a small paper on grid inverters and what they can do in the US, underlying their ability to underpin the grid, and it is working on a similar one in Australia. There’s a lot at stake for all parties.
“The technology solution is there,” Tadich says. “So I don’t think it’s a question of, can we do it? We can definitely do it. We can definitely do it.
“There’s a whole bunch of societal issues we need to go through on planning reform and transmission and the financing and the Nelson market review and how that kind of works out. They’re all questions for us as society to agree on. But the technology, fundamentally, is there to run 100% renewable grid.”
You can find the full interview with Josef Tadich – he also discusses home batteries, vehicle-to-grid, and battery chemistry and costs – in the latest episode of Renew Economy’s weekly Energy Insiders podcast.
Listen: Energy Insiders Podcast: Changing the grid, one Tesla battery at a time
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