Gulf Power Company launched a new research project Wednesday at its Douglas L. McCrary Training Center, where the utility will study how Tesla battery technology can curb energy use for commercial and industrial customers.

During the two-year project, researchers will test and evaluate a 1 megawatt-hour Tesla Powerpack industrial energy storage system. In total, the setup holds 10 Powerpacks. Each pack contains 16 individual battery pods, a thermal control system and hundreds of sensors to monitor and report on performance.

Mark Dreadin, Gulf Power senior engineer for Power Delivery Technical Services, said the utility will study how the system discharges during periods of peak demand to lighten the load drawn from the grid. The utility will also examine how the technology works as an uninterruptible power supply, an apparatus that provides emergency power when the main source fails.

“We want to look at the science and see how that integrates into the system,” Dreadin said.

Southern Company, Gulf Power’s parent company, developed the project in partnership with Gulf Power and with support from Tesla and the Palo Alto-headquartered Electric Power Research Institute. The system is charged through standard building connections to the utility’s distribution system.

Steve Baxley, Southern Company research and development manager, said if a commercial or industrial customer was on a rate with adjustable pricing, the battery system could be charged during night hours when demand and pricing are lower. The system would then discharge at peak periods during the day. It would operate through smart technology to execute automatically.

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“We have a meter that’s measuring the load on the building,” Baxley said. “If you know a hot summer day is coming and you’re going to hit a peak period and want to shave that, you can program the battery to monitor what the load is. At that point, the battery can start discharging and help to shave or reduce your peak demand.”

Gulf Power reported that the system’s capacity could supply enough electricity to power 400 average-sized homes for up to two hours. It has been designed to be scalable and could be expanded to a 10 megawatt-hour system for commercial or industrial customers that consume enormous amounts of energy.

Tesla also offers the Powerwall, a battery system for residential users. The Powerwall will be a component of Smart Home Pensacola, a two-story residence under construction on Bayshore Drive in Pensacola. The designers of the property seek to generate and supply the home’s entire electricity needs through energy-efficient materials and Tesla solar panel technology.

The utility declined to disclose the cost of the system, citing a non-disclosure agreement with Tesla. Kimberly Blair, a Gulf Power spokeswoman, said that it was not paid for by ratepayers. Business Insider reported last year that two 210 kilowatt-hour packs cost $145,100, including the cost of an inverter and installation.

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Moving forward, Baxley anticipates commercial and industrial companies to adopt battery technology such as the system launched by Gulf Power. But he said it will require some time before it is affordable for most.

“The technology is new and emerging, so the price point is not quite there to make that happen yet,” he said. “The price needs to continue to come down to make it economically viable for a lot of commercial and industrial customers. But it’s on a trajectory to do that.”