Tesla's Tesla Big Battery is being sued by AER

MELBOURNE, Sept 23 Reuters - Australian energy regulator AER has filed a lawsuit against Neoen SA for saying the French firm's Tesla Big Battery in South Australia did not provide backup power during four months in 2019 for which it had received payment.

Neoen said it was disappointed by AER's decision to remove Neoen from the platform. It did not comment on actual allegations.

On demand power from storage is crucial for preventing blackouts in Australia which is increasingly dependent on wind and solar farms from which energy is not always available.

Elon Musk has built the biggest system when it was switched off in 2017, when Tesla Inc Chief Executive Nick Hornsdale Power Reserve said his firm could end a power outage in South Australia with its Megapack batteries.

AER said Hornsdale Power Reserve offered to provide market services and was called on by the Australian Energy Market Operator to supply power in July to November 2019 between frequency disturbances - or power drops on the network. The energy was not supplied as needed but was dispatched as required when the demand was made.

It is vital that generators do what they say they can do if we're going to keep lights on through the transition of variable renewable generation in the market, said AER Chair Clare Savage.

The regulator is seeking cost of fines and court proceedings.

Louis de Sambucy Managing Director of Neoen Australia said the Hornsdale Power Reserve has proven to be a critical component of the SA electric grid Whilst we are disappointed by the AER decision, We will continue to maintain our collaborative relationship with them, he said in a statement.

The action comes as Neoen faces potential delays with its biggest battery in the Victoria Big Battery, the 450 megawatt hour of Australian power, after a fire in one of its Tesla Megapacks.

The Victoria Big Battery was due to be switched on in time for the southern hemisphere summer, which starts in December.