Last week, Tesla introduced something bigger than its Powerpack energy-storage systems: the Megapack, for large utility-scale storage installations.

Tesla says the Megapack, which stores 3 megawatt-hours of electricity, has 60 percent more energy density than the Powerpack. For grid power installations, that means companies can install fewer than one-tenth the units that they needed for the same amount of storage in Powerpacks.

With greater energy density, Tesla says a storage bank using Megapacks can take up 40 percent less space than one built with Powerpacks.

Artist's rendering of Tesla Megapack grid storage installation

Tesla built what it says is the largest commercial battery-storage operation in the world with a 129 megawatt-hour installation in Hornsdale, South Australia, using more than 600 Powerpacks. The same installation using Megapacks would require just 43 Megapacks.

With fewer units, the systems can be assembled in one-tenth the time, Tesla says.

The Megapacks can also enable much larger-scale projects, including up to 1 gigawatt-hour or larger, which would be enough to power every home in San Francisco for six hours, Tesla says.

Such stationary batteries are designed as to enable utilities to integrate more renewable energy such as wind and solar farms onto the grid. With battery storage (or pumped hydro), the batteries can store solar power from sunny days to use at night or on rainy days, and energy generated by windmills, to be used during calm days.

That can make the power grid more reliable and give operators more flexibility.

Tesla Powerpacks

Increasing the capacity of renewable wind and solar power on the grid helps make the cars that run on electricity cleaner and comparatively more efficient.

Tesla says it is planning the first utility-scale battery storage installation using Megapacks in a PG&E project in Moss Landing, California, to power Silicon Valley, which has had problems with blackouts. The project, proposed last year, aims to build a 567 megawatt storage facility, using several contractors including Tesla. Tesla's installation will account for 182.5 megawatt-hours of the project, which is expected to be fully operational by the end of 2020.

"Energy storage plays an increasingly important role in California's clean energy future," said Roy Kuga, vice president, Grid Integration and Innovation at PG&E in a statement announcing the project. "Recent decreases in battery prices are enabling energy storage to become a competitive alternative to traditional solutions. As a result, we believe that battery energy storage will be even more significant in enhancing overall grid reliability, integrating renewables, and helping customers save energy and money."

In Tesla's second-quarter financial report earlier this month, the company said that its commercial energy storage business grew by 81 percent, and that it has battery storage systems, including home Powerwalls, installed in 50,000 locations.