Musk promised to build the 100-megawatt battery within 100 days of the contracts being signed at the end of September or hand it over to the South Australia state government for free.
South Australia Premier Jay Weatherill announced Friday the battery began dispatching power into the state grid on Thursday afternoon, providing 70 megawatts as temperatures rose above 30 degrees Celsius (86 degrees Fahrenheit).
"South Australia is now leading the world in dispatchable renewable energy, delivered to homes and businesses 24/7," Weatherill said.
Tesla says the battery has the capacity to power 30,000 homes for up to an hour in the event of a severe blackout, but is more likely to be called into action to boost supply during peak demand periods.
The battery power packs are installed near the Outback town of Jamestown, about 200 kilometers (120 miles) north of the state capital Adelaide.
They store energy generated by the neighboring Hornsdale Wind Farm, owned by French renewable energy company Neoen, to bring added reliability and stability to the state grid.
South Australia, which relies heavily on solar and wind- generated energy, has been scrambling to find a way to bolster its fragile power grid since the entire state suffered a blackout during a storm last year. Further blackouts plagued the state over the next few months.
The battery farm is part of a 550 million Australian dollar (USD 420 million) plan announced in March by Weatherill to make the state independent of the nation's power grid. The cost of the battery has not been made public.
The shortage is looming as Australia is expected to soon overtake Qatar as the world's biggest exporter of liquid natural gas.
Australia is also a major exporter of coal, which fires much of its electricity generation and makes the country one of the world's worst greenhouse gas polluters on a per capita basis.
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