Over the past decade, the conversation within Australian Governments, big and small, has shifted from downstream processing of critical minerals through to the development of a battery manufacturing sector. The development of lithium hydroxide, nickel sulphate and vanadium pentoxide processing facilities is now being replaced with strategies to manufacture lithium ion and vanadium redox flow batteries in the country.
The downstream path has not been without its own issues, with delays and cost overruns resulting in a relatively slow build up of capacity. The development of battery strategies at the Government level moves the discussion beyond a purely economic one to that of national energy security and decarbonisation.
As the world continues to decarbonise, the demand for battery storage is set to increase tenfold by 2030. This shift brings with it an opportunity for Australia to become a driving force in the development, manufacture, and deployment of new energy storage technologies. With other countries developing their own strategies, the view of the Federal Government is this is a once in a lifetime deal that will soon be lost if we don’t act now.
This article looks at the strategies and plans of the Federal, Queensland, and Western Australian Governments to support and incentivise the emerging battery storage sector in Australia. WA and Queensland are the states with the most advanced critical minerals endowments that can capitalise on a battery strategy.
The Australian Government’s National Battery Strategy, released last week, outlines a vision for boosting domestic and export battery production, with a specific focus on manufacturing. The strategy aims to create a diverse and competitive Australian battery industry, improve Australia’s energy security, ensure our place in global battery supply chains, and drive economic growth.
The Government’s vision is that by 2035, Australia will be a globally competitive producer of batteries and battery materials, providing secure and resilient battery supply chains, delivering affordable and secure energy for Australia. Whilst it expects the private sector to drive most of the spending, it has committed $22.7 billion over the next 10 years through direct grants, production tax credits and improved coordination between proponents and Governments.
The Queensland Government has also recently released a multi-technology Queensland Battery Industry Strategy 2024-2029. The strategy highlights Queensland’s critical minerals and mining expertise as well as its competitive advantages to further develop capabilities in refining, production of advanced battery materials, cell manufacture, pack assembly, installation, and recycling.
The Queensland Battery Industry Strategy outlines actions that will target $570 million in investment over the next 5 years. A key action is the Australian-Made Battery Precinct in Queensland, which is being delivered with the Australian Government’s investment of up to $100 million.
A key plank of the Queensland strategy is the development of the vanadium sector in the Julia Creek region, with ore mined, refined into vanadium pentoxide flake before being turned into vanadium electrolyte in Townsville. From there, it will be used in Vanadium Redox Flow Batteries (VRFBs) that are anticipated to be deployed across regional Queensland as a key homegrown storage solution.
VRFBs are large scale batteries that provide capacity for up to 8-12 hours discharge, longer than the 3-4 hours typically provided by large scale lithium ion facilities. They are non-flammable, have low maintenance and can be charged and discharged simultaneously meaning they are an excellent accompaniment for solar and wind facilities.
In Western Australia, the Government has developed a refreshed Battery and Critical Minerals Strategy, building on the vision set out in WA’s 2019 Future Battery Industry Strategy. The WA Battery and Critical Minerals Strategy 2024-2030 highlights that WA already has a strong downstream sector, with operating lithium hydroxide and nickel sulphate facilities. The key now is providing the incentives and co-ordination to allow the next step, battery manufacturing, to commence. As with Queensland, the Government is also highly supportive of the vanadium sector and the development of new mines in the Murchison region.
As would be expected, there is a significant crossover between the strategies of the Federal, Queensland, and Western Australian Governments. All three strategies aim to create a diverse and competitive domestic battery industry, improve energy security, and ensure Australia’s place in global battery supply chains. Many of the initiatives in the (Labor) State strategies are co-funded by the Federal (Labor) Government. It’s worth noting that the Liberal-National coalition has different views on energy production and storage that could impact policy over the coming years with elections for all three jurisdictions within the next year.
The emerging battery storage sector in Australia is receiving significant support and incentives from the Federal, Queensland, and Western Australian Governments. Their strategies and plans are set to drive economic growth, create jobs, and boost productivity although there is a cost involved. At the Federal level, the Government’s spending works out to be about $1000 for every resident over the next decade with no guarantees that power prices will come down.
For investors, there is a significant opportunity for companies with advanced projects to proceed with a bit of help from the Government. Grants, low-cost loans and fast-tracked approvals have the potential to reduce outside funding requirements (ie less dilution) and provide comfort for financiers (higher probability of debt financing).
Watch this space over the coming years, there’s more in stor(age).
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Photo by Possessed Photography
