South Australia's Premier Jay Weatherill says he's examining an offer from Tesla Inc boss Elon Musk to save Australia's most renewable-energy dependent state from blackouts by installing $25 million worth of battery storage within 100 days.

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Mr Musk tweeted that if he couldn't do it within the time limit the technology would be free.

The offer follows a string of power outages in South Australia, including a blackout that left industry crippled for up to two weeks and sparked fears of more outages across the national electricity market due to tight supplies.

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Musk made the offer on social media, and the government said it could consider backing such a battery roll out by Tesla.

"The government stands ready through ARENA and the CEFC to work with companies with serious proposals to support the deployment of more storage," Environment and Energy Minister Josh Frydenberg said in an emailed statement.

Elon Musk backed up his claim to be able to install the system in 100 days by adding it would be free if he could not. Photo: Getty Images

ARENA is the Australian Renewable Energy Agency and the CEFC is the Clean Energy Finance Corp.

Musk made the offer in response to a comment on social media by Mike Cannon-Brookes, the co-founder of Australian software maker Atlassian Corp, who said he would be willing to line up funding and political support if Tesla could supply batteries that would solve South Australia's problems.

100 day guarantee

Musk responded by tweeting: "Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?"

He quoted a price of $250 per kilowatt hour for 100 megawatt hour systems, which would imply a price of $25 million for the battery packs.

"You're on mate. Give me 7 days to try and sort out politics & funding," tweeted Cannon-Brookes.

He said he was inundated with calls on Friday after the exchange and was eager to get the plan off the ground.

"My phone hasn't stopped buzzing. The support is flooding in, both from individuals in terms of 'Hell yes!' and from corporates who are asking: 'Can we buy power? Can we contribute dollars?'," Cannon-Brookes told Reuters.

Tesla launched its Powerwall 2 in Australia, the world's top market for rooftop solar, this week. Battery storage is just one of several options the government is looking at to help ensure reliable power supplies as the country grows more reliant on intermittent wind and solar power.

Tesla Inc boss Elon Musk unveils the company's new solar batteries in 2015. Photo: AP

"We have been talking with a number of large-scale battery providers about potential storage solutions, including in South Australia. To the extent Tesla is interested, we'll also talk with them," Clean Energy Finance Corp Chief Executive Oliver Yates said in an emailed statement.

After a record-breaking summer, Australia's energy market operator said this week that eastern Australia desperately needed more gas for power stations within the next two years to provide back-up electricity for wind and solar and avert blackouts.


'I can't see what there is to lose': Greens Senator

Greens Senator Sarah Hanson-Young says she is in talks with those involved in the proposal, and believes battery technology would be the game-changer South Australia needs to solve its energy woes.

"He has thrown down the gauntlet here - I can't see what there is to lose," she told ABC TV on Saturday.

"I think it is a very, very exciting prospect and I've been on the phone and on the emails this morning, trying to work out how we can deliver that here in South Australia."

Senator Sarah Hanson-Young has spoken out in support of the offer. Photo: AAP

South Australian Premier Jay Weatherill has retweet a tweet from Elon Musk saying that they have already spoken.

"Very impressed," Mr Musk said in the tweet.

"Govt is clearly committed to a smart, quick solution."

Earlier Mr Weatherill has confirmed that he is looking into the proposal.

Senator Hanson-Young said the technology would allow the state to bank renewable energy during the day, for use at night.

The reason it hasn't already been used is because market rules make battery storage options uncompetitive, she said.

"We need to get those rules changed," Senator Hanson-Young said.

"If we can find the political will to do that, if people really want to fix the energy crisis, they want to reduce people's power bills, fixing those rules, letting batteries play a huge role will significantly go to solving this problem."

Newsbreak – March 11

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