Tesla boss Elon Musk has held a party in South Australia's mid-north to mark the halfway point of construction of the world's most powerful lithium ion battery.

Key points: Elon Musk made the announcement from a marquee overlooking the battery array in Jamestown

Elon Musk made the announcement from a marquee overlooking the battery array in Jamestown SA Premier Jay Weatherill said the event was a celebration of how far the state has come, one year on from the statewide blackout

SA Premier Jay Weatherill said the event was a celebration of how far the state has come, one year on from the statewide blackout The SA Government has set an operating deadline of December 1 for the battery

A grid connection agreement for the 100-megawatt battery array was signed by transmission company Electranet on Friday afternoon, sparking the start of a 100-day deadline for Tesla to complete construction of the battery or build it for free.

Mr Musk addressed invited guests including politicians, local landowners and Tesla customers in a marquee overlooking the battery array which is under construction in Jamestown alongside French company Neoen's Hornsdale wind farm.

"To have that [construction] done in two months … you can't remodel your kitchen in that period of time," Mr Musk joked as he took to the stage.

"This serves as a great example to the rest of the world of what can be done."

Tesla's lithium ion battery will store power near Jamestown. ( Telsa Motors: Timothy Artman )

Also in attendance was South Australian Premier Jay Weatherill, who noted it was one year ago from Thursday since South Australia's statewide blackout.

"That was not a good day," Mr Weatherill said.

"Tonight we are here celebrating the progress that's been made.

"There were lots of people that were making jokes about South Australia and making fun of our leadership in renewable energy. Well today they're laughing out of the other side of their face."

Tesla said the event was powered entirely by Powerpack batteries, the same systems being used in the South Australian array.

The substation near Jamestown where the 100-megawatt battery is expected to be built. ( ABC News: Nick Harmsen )

Mr Musk told the audience that Australia could be powered by 1,890 square kilometres of solar panels — roughly a tenth the area of Sydney — backed up by seven square kilometres of batteries.

"It's not just talk. It's reality," he said.

"That is what the future will look like and the faster we get there, the better."

Ability to power 30,000 homes

Tesla will operate the battery on behalf of Neoen, in a deal subsidised by up to $50 million by South Australian taxpayers.

Under the arrangement, the South Australian Government will have the right to use the battery to help prevent load-shedding blackouts, and to provide new competition in the provision of stability services to the grid.

Tesla claims its array, manufactured at the company's new Gigafactory in Nevada, will be able to power about 30,000 homes.

It will store up to 129 MWh of electricity, meaning at full power it will last for a little over an hour.

Construction of the battery was announced in July, in response to an expression of interest process run by the South Australian Government.

The Government has set an operating deadline of December 1 for the battery along with 250 megawatts of temporary diesel generators, to help address expected shortfalls across the summer period.