Building the world's biggest lithium-ion battery in South Australia is like uncovering the "Holy Grail" of energy policy, Premier Jay Weatherill says.
The premier says the proposal from billionaire entrepreneur Elon Musk to build the battery was head and shoulders above other bids and was a sign of bigger things to come.
"This is just the beginning of investment in battery technology," he told reporters on Monday.
"It's almost the holy grail of energy policy.
"How you take variable renewable (energy) and turn it into, effectively, baseload, that's what everybody has been seeking.
"We know it's incredibly cheap to have renewable energy, but the question was what happens when the sun isn't shining and the wind isn't blowing.
"If we're able to firm that up with these other arrangements, it's just a game changer."
The battery will be produced by Mr Musk's company Tesla and if it's not delivered in 100 days it will be provided free.
It will help stabilise the state's energy grid and should put downward pressure on prices as a key part of South Australia's $550 million energy plan which was developed in response to last year's statewide blackout.
It will be built near Jamestown, in SA's mid north and paired to a wind farm operated by French utility company Neoen.
Mr Weatherill says the Tesla bid was both the cheapest and the best value among the 90 proposals the state government received.
"On every domain, it came out on top," he said.
"In terms of making an assessment, it was head and shoulders above the other bids."
