| February 6, 2023

Response to the ACCC Issues Paper on Lithium-Ion Batteries

The Smart Energy Council is grateful for the opportunity to provide a submission to the ACCC’s issues paper on Lithium-ion batteries.

The Smart Energy Council is Australia’s peak independent body for renewables including solar, batteries, and green hydrogen. The council has over 950 members and 65 years of experience in the sector having been established by the photovoltaic pioneers in the 1950 and 60s who designed and built some of the world’s first solar panels and solar hot water systems.

The Council understands Australia’s transition to a net-zero emissions economy will deliver massive business and economic benefits; it will deliver jobs, attract investment, innovate, and make our economy more productive and competitive, all while delivery a safer climate. Achieving a strong economy and a safe climate is not just possible, it is critical if we are to confront the challenges of the future. The SEC’s 950 members provide us with real-world, empirical insights via thematic working groups which assist the SEC with drafting, testing and advocating for fit-for-purpose smart energy policy. The discussion and outputs of the SEC working groups  provides the basis of the evidence provided in this submission.

For the purposes of this response to the issues paper on Lithium-Ion Batteries we will focus at a high level on questions 5-7 relating to consumer awareness and behaviour and questions 13 relating to the market as a whole and 14-20 relating to the regulatory landscape.

 

Consumer awareness and behaviour

5. Do you consider that consumers are sufficiently educated on Li-ion battery safety hazards? If so, what are the key sources of information for consumers? Do you consider that further consumer education is required, what should the message be and in what form?

Response to question 5:

Consumer education about Lithium-ion batteries and the relevant safety hazards is relatively scarce. Understanding some of the basic ways to safely use smaller consumer level batteries is important. The Smart Energy Council believes that some simple messages could be distilled in a campaign to promote safer use of smaller batteries for consumers. Larger batteries such as those mounted on houses and in cars have significant safety messaging for the installers and manufacturers. The SEC believes these safety messages are well complied with by installers and manufacturers, however, most of the anecdotal evidence from issues such as fire suggests that there needs to be a communication campaign around safe installation or a banning of self-installation for the larger products.

6. What actions can consumers take to mitigate the risks presented by Li-ion batteries?

Response to question 6:

There are some simple messages that consumers should understand and follow when it comes to batteries. These messages are largely agreed and uncontested within the Australian batteries sector.

  • Regular checks of the condition of the battery and disposal of batteries that are damaged or swollen;
  • Danger signs for batteries include damaged or swollen batteries, and extremely hot batteries or batteries that appear to be smoking must be disconnected and properly disposed.
  • Batteries must be stored within the temperature range recommended by the manufacturer and away from flammable materials;
  • Batteries should not be exposed to heat or direct sunlight, or leave them in hot vehicles for extended periods;
  • Batteries should be charged using products provided or recommended by the manufacturer;
    Batteries must not be charged or mounted to flammable surfaces such as wood, carpet, plastic or paper;
  • Where possible batteries shouldn’t be left unattended charging and should not be left charging after the product is fully charged;
  • Storage and transport batteries should be in a non-flammable containers;

7. As a consumer or retailer:

a. Do you assume the manufacturer has conducted safety testing on Li-ion battery products you
purchase?

Response to question 7:

The Smart Energy Council is confident there is effective safety testing for larger household and vehicle sized Lithium-Ion batteries.

There is also a great deal of confidence that larger consumer manufacturers with a significant Australian presence have tested their products, including their internal lithium-ion battery products before they go to market.
The Smart Energy Council has no data or evidence that any product testing occurs for other Lithium-Ion batteries outside of this scope. We believe this is something that needs to change and would support the ACCC utilising its powers to provide confidence to the vast array of consumer products that have proliferated over the past few decades as prices for these products have decreased.

 

The Market

13. Are there alternatives to Li-ion batteries that are in the market or in development that are potentially safer than Li-on batteries? What are they?

Response to question 13:

Lithium-ion batteries make up the most significant portion of the battery market however there are many new chemistry options that are creating headlines because of advancements in size, weight, stability and availability of the resources to create the battery.

The three most promising emerging battery make-ups include sodium-ion, solid-state and lithium-sulphur batteries. These batteries offer a great deal of opportunity in certain circumstances and may offer some benefits in terms of heat and safety.

Sodium-ion batteries have been of interest over the past few years and there the SEC understands that there are some manufacturers who are beginning production of smaller scale versions of the product. Sodium-ion offers the advantage of using readily available inputs. Sodium-ion batteries are also generally non-flammable and less susceptible to temperature changes than lithium-ion batteries. However, the batteries in their current form are also lower energy density than lithium-ion batteries meaning they will store less. Because of this density issue this product will likely be in the mix for larger scale projects.

Solid-state batteries are also in development and companies like BMW are currently testing the technology for use in their EV’s. Solid state batteries replace the liquid or gel electrolyte used in lithium-ion batteries with a solid form. The current technology is reported to have issues with heat however over time this problem may be resolved.

Lithium-sulphur technology has the potential to offer cheaper, lighter batteries that also offer safety advantages because the batteries have better heat properties. The expected timeframe to bring a lithium sulphur battery to the market is 2040-50.

 

Regulatory landscape

14. Do you consider government intervention is required to manage Li-ion battery safety risks? If yes, what form of intervention do you recommend? Please explain your response.

Response to question 14:

The Smart Energy Council believes that there should be consideration for Government intervention to hold smaller battery manufacturers selling into the Australian marketplace to a significantly higher standard.

At the same time the existing larger players in Australia who conduct themselves with a focus on protecting their customers and making sure the products they provide and install are as safe as possible do not require substantial government intervention.

Any exercise that results in intervention by government must involve an acknowledgment that Australia’s onshore battery providers can and do provide safe, effective products that consumers can trust.

Small scall batteries attached to commercial and residential property are a growing and extremely important part of Australia’s energy mix. This will only increase as electricity prices stay high and batteries become cheaper over time. It is extremely important that these batteries continue to be installed by professionals with high standards and that consumers maintain confidence in the product.

Recommended Governance Interventions

Advisory Panel:

Create an expert advisory panel to assess fire potentially related to batteries and advise ACCC on lithium battery recalls.

It is hoped that this panel would provide specialist expertise. This is essential given the existing framework which includes the patchwork of State Energy Regulators that currently do not provide enough support in this regard.

The group should be a made up of experts who deal with the highly technical aspects of the current standards AS/NZS 5139 which deals with battery installation risk. This group could also be made up of the state-based Energy Regulators in order to feed information back to the relevant jurisdictions.

Financial Incentives: 

There is currently no financial incentive for installers to properly document batteries installed in households. Unlike Solar Panel installation which involves the payment of STC’s to installers for every panel placed on a household roof there is no similar scheme for batteries.

The Smart Energy Council recommends that the STC scheme utilised for the installation of solar be extended to battery storage. The SEC will have more to say about this in future discussions with Government around small-scale storage targets. The extension of the STC regime to batteries would mean that all aspects of household battery installation would be documented.

This scheme would serve as a more comprehensive register than the current AEMO DER register that has significant limitations and is not accessible to manufacturers who are attempting to contact consumers in order to repair or replace components. The industry assumes that only around 1 in every 4 batteries installed on households are currently registered under this scheme.

Potential risk mitigation strategies

15. Do you recommend any existing voluntary, industry or international safety standard, or overseas regulatory frameworks or certification methods, as having potential to mitigate the risks discussed in this Issues Paper? To what extent do these already address the risks discussed in this Issues Paper?

Response to question 15:

As described in our answer to question 14 there is a need to create a better framework around the reporting and safety understanding of larger batteries installed on households. Our response to question 14 details the need to create an advisory panel and for the support of a reporting regime similar to the STC reporting obligations for solar panel installation.

For smaller scale batteries used in products like E-scooters/bikes or consumer electric goods the Smart Energy Council believes that many of these need to be considered very closely. Most of the anecdotal evidence around safety issues available in the media involves these products being used incorrectly or in some cases the products are of poor quality. This area of the market needs to be examined much more closely and the manufacturers and importers of these goods need to be held to a higher standard.

17. Do you consider that any of the potential risk mitigation strategies identified in this Issues Paper would prevent injuries or fatalities from Li-ion batteries in Australia, either on their own or as part of a combined approach? Why?

Response to question 17:

The Smart Energy Council supports the application of AS/NZS 60335, IEC 63056:2020, IEC 62133-2:2017+AMD1:2021, IEC TS 62933-5-1:2017 and AS/NZS 5139-2019 as the relevant standards for the Australian battery market. These standards are evolving and are an important framework for manufacturers, importers, and installers.

Increased resourcing for these standards as well as discussion around enforcement of the standards is very much needed. The proper application and enforcement of these standards should be considered as part of a package to provide more confidence to consumers. In order for the distributed energy network to operate in the best interests of consumers, and their safety a specific division within the Department of energy must be established to ensure that standards for emerging batteries are guided at a national level. This must be outside the pre-existing energy institutions, which refuse to regulate and effectively enforce high quality installation of Distributed Energy Resources, which includes batteries. (AER).

18. What other potential risk mitigation strategies may be effective in reducing the risks posed by Li-ion batteries? Please explain your response.

Response to question 18:

The Smart Energy Council has a solar panel safety and quality control process that is applied to a range of manufacturers in China. The Smart Energy Council would be very happy to provide a briefing to the ACCC on this innovative process and the potential applications it would have to battery manufacturing. One of the key components to the process is production line sample testing. Where during the manufacturing process component samples are pulled out of the production line, examined, and subjected to testing. Testing provides assurances and integrity measurements to performance and abuse tests.

19. What research is available that is directed to the prevention of injuries or fatalities caused by Lion batteries. For example, research into safer design and manufacturing practices. Please provide details of this research.

Response to question 19:

There is an extensive array of high-quality research available in the marketplace that tracks recent progress in battery chemistry and manufacturing processes.

The SEC recommends an analysis of any of the recent papers on the causes of heat and gas generation in Lithium-ion batteries. This should include the various solutions to these issues relating to the prevention on the generation of excessive heat, keeping them working at a suitable voltage range, and improving their cooling rates.

20. Are there further innovations, including advances in technology, that could either mitigate or exacerbate the hazards associated with Li-ion batteries discussed in this Issues Paper?

Response to question 20:

Technology is changing all the time and significant new advancements in the chemistry of Lithium-ion batteries are becoming the norm. Often, we see exciting industry announcements every few weeks about new discoveries that will lead to longer lasting, lighter, more durable batteries or batteries with chemistry that allow them to be used at higher temperature. Because of the significant investment in R&D in the sector and the growing knowledge base this trend will only increase over time.

For longer storage options in batteries at scale we are seeing a move away from the use of lithium-ion products and into products that have a longer discharge time. It is entirely possible that sodium sulphur batteries will be a game changer in the EV marketplace over the coming years. Industry trends aside, the best way to mitigate any hazards that exist in the industry is to ensure that standards for products that are installed are maintained and followed and to apply those standards to smaller products in the marketplace.

The challenge for the ACCC is to ensure that these battery products are safe, consumers are informed about the best ways to handle and use the products and to ensure that the accurate information is in the marketplace.

We welcome any further consultation, and we have an extensive network, and working group which covers many of the main players in the battery for energy storage and dispatch.

We welcome a meeting with the ACCC on this matter, providing an opportunity for the ACCC to engage directly with broad mix of the battery industry.

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