Tesla founder Elon Musk has come good on his promise, agreeing to build the world’s largest lithium ion battery to solve South Australia’s energy woes in less than 100 days – or it’s free.

Musk famously made the pledge on Twitter in March and revealed on Friday it would cost him potentially more than $50 million if he failed to deliver on time.

The battery will store renewable energy at a wind farm in Hornsdale, Jamestown, owned by French energy utility Neoen.

The battery farm is designed to stabilise the South Australian energy network and provide emergency power back-up.

It will have three times the capacity of the next biggest power storage facility in the world, holding up to 100 megawatts and providing 129 megawatt-hours of energy generation.

“There is certainly some risk,” Musk told reporters.

“We’re talking about something that’s three times as powerful as the next [largest ion] battery.

“It’s the normal technical challenges that come with scale … whenever you build something three times bigger than has been done before, there’s always some risk.”

But he said he was willing to take the risk to make a statement about the viability of renewables.

“I was made aware … that there was this opportunity to make this significant statement about renewable energy to the world,” he said.

“Coal does not have a long-term future.”

Tesla beat 91 bidders to be chosen for the development.

State premier Jay Weatherill said the investment showed South Australia was leading by example.

“South Australia has been leading the nation in renewable energy – now we are leading the world in battery storage,” Mr Weatherill said.

“Battery storage is the future of our national energy market, and the eyes of the world will be following our leadership in this space.”

He said the investment would bolster the state’s economy.

Neoen deputy CEO Romain Desrousseaux said the technology would demonstrate “large-scale battery storage is both possible and now, commercially viable”.

“Together, the South Australian government, Neoen and Tesla will demonstrate that renewables can provide dependable, distributable power that will turn a new page in Australia’s energy future,” he said.

Mr Musk added that he believed the development would create jobs and suggested the battery farm could become a tourist destination.

Tesla’s impression of the South Australian battery farm. Photo: Tesla

The initial promise. Photo: Twitter

The deal forms a key part of the state government’s $550 million energy plan drawn up after last year’s statewide blackout.

South Australia suffered a devastating blackout in September when a severe storm damaged power infrastructure.

The state again suffered power outages during heatwaves over summer.

In a statement, Tesla said: “This grid scale energy storage project is not only sustainable, but will help solve power shortages, reduce intermittencies, and manage summertime peak load to improve the reliability of South Australia’s electrical infrastructure.”

The recent Finkel Review recommended wind power with battery storage as an important step.

Neoen and Tesla will later announce more investments in South Australia, the government said.