Tesla Megapack Facility Breaks Ground in Western Australia

A Major Megapack Milestone Breaks Ground in WA

Construction is now officially underway on the Neoen Muchea Battery, a $250 million Tesla Megapack battery energy storage system (BESS) located in Muchea, Western Australia — roughly 43 kilometers northeast of Perth. Developer Neoen confirmed that formal site work commenced on April 7–8, 2026, though early groundwork including a 1.3-kilometer access road upgrade and the establishment of a main laydown area was completed before the end of 2025.

The project will deploy 252 Tesla Megapack 2XL units, delivering a combined capacity of 164 MW / 905 MWh. That storage duration — six hours — makes this Neoen's first long-duration battery project anywhere in the world, a meaningful step up from the shorter-duration systems that have dominated the market to date.

📊 Key Figures

Metric	Value	Context
Total Investment	$250 million AUD	One of WA's largest BESS projects
Power Capacity	164 MW	Grid-scale stabilization
Energy Capacity	905 MWh	6-hour duration — Neoen's first
Megapack Units	252 × Megapack 2XL	Tesla's largest Megapack variant
Construction Jobs	70 new jobs	Local employment during build
Community Benefit Fund	AUD 2M+	First Nations + local community, 20+ yr lifespan
Expected Completion	CY 2027	Full commercial operation

Who's Building It and Where

The Muchea site sits within the Shire of Chittering and will connect directly into Western Power's existing Muchea substation on the South-West Interconnected System (SWIS) — the main grid serving the Perth metro area and surrounding regions. Engineering and construction contractor UGL, a member of the CIMIC Group, has been engaged by both Neoen and Tesla to handle design, installation, connection, and commissioning support.

The project holds a Capacity Investment Scheme Agreement with the Australian Government, providing a federal revenue backstop that de-risks the investment and signals strong policy alignment with Australia's renewable energy transition targets.

🔭 The BASENOR Take

📰 Deep Dive

The Neoen Muchea Battery is more than a line item in Tesla Energy's order book — it's a direct validation of the Megapack 2XL's ability to compete at the long-duration tier of the grid storage market. Six-hour battery storage has historically been the domain of pumped hydro and gas peakers. A 905 MWh BESS capable of sustaining output for six hours changes that calculus, particularly for isolated grids like Western Australia's SWIS, which cannot import power from interstate during demand spikes.

For Tesla, this project matters beyond the hardware revenue. The Megapack business has been one of the company's fastest-growing segments, and high-profile deployments like Muchea serve as reference projects that accelerate future sales. Every utility that evaluates a long-duration BESS tender will now be able to point to a commissioned, operational Megapack 2XL installation at this scale — that's a meaningful commercial advantage.

The Australian Government's Capacity Investment Scheme backing also deserves attention. It's a signal that federal energy policy is actively de-risking large-scale battery procurement, which could unlock a pipeline of similar projects across the country. Neoen already operates the Hornsdale Power Reserve in South Australia — the project that put grid-scale Megapacks on the global map — and Muchea represents a significant step up in both capacity and duration from that landmark installation.

With construction targeted for completion in 2027, the Muchea battery will come online at a time when Western Australia's grid is under increasing pressure from rising renewable penetration and the retirement of legacy thermal generation. The timing is deliberate, and the scale is purpose-built for what's coming. For those tracking Tesla Energy's trajectory, this is a project worth watching closely.

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Sources verified at publish time. Spotted an inaccuracy? Email editorial@basenor.com.