| April 6, 2023

Submission to the National Battery Strategy

The Smart Energy Council is Australia’s peak independent body for renewables including batteries at all scales of electricity utilization, solar and green hydrogen.

 

Key Submission Strategy Conclusions

Kickstart and provide a reliable supply of batteries for our own burgeoning storage needs.

  • Deploy a Renewable Energy Storage Target, and small-scale renewable energy storage scheme.,
  • 2-year window of opportunity to become ‘guiding hand’ in the manufacturing of batteries.
  • Value adding to our raw mineral exports
  • Australia must target becoming a leader in high quality advanced cell manufacturing.
  • R&D, Patents and a training and development world leader
  • Embedding Circular Economy Principles into the battery industry.

 

Advanced battery cell manufacturing, with a focus on leadership in cell quality is a unique opportunity for Australia in the battery supply chain. A targeted focus on this section of the supply chain feeds into our natural advantages.

  • Strong R&D Capability – with scale-up potential
  • Expertise in technical advanced manufacturing.
  • Climatic Variability for testing
  • High attention to quality control and safety.

 

About the Smart Energy Council

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.

We actively connect the smart energy industry across Australia, building momentum and unlocking the barriers that hold us back from embracing a smart energy 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.

 

Renewable Energy Storage Target and Small scale energy storage scheme.

Australia can be a world leader in battery storage.

To reach 82% renewables by 2030, requires approximately 18GW of Storage capacity.

About half of that energy storage will be supplied by utility-scale storage, most of which will be batteries in the lead-up to 2030. The other half of this storage is set to come from the small-scale, or distributed energy storage. Australia must set a target for small-scale energy storage, and unleash this market private market. This will also enable the necessary demand for battery storage production in Australia to support the broader Australian battery strategy.

The Renewable Energy Target has been Australia’s most successful and enduring climate change measure and one of our most important industry development initiatives.

The Small-scale Renewable Energy Scheme (SRES), a key part of the Renewable Energy Target, has helped more than 3 million Australian families install solar panels or solar hot water systems by providing upfront discounts for each system. The SRES has also unleashed a multi-billion dollar solar industry, employing more than 30,000 Australians.

Now is the time to use the same policy measure to unlock investment in household energy storage, such as batteries through a new Small-scale Renewable Energy Storage Target.

A Small-scale Renewable Energy Storage Target will:

  • Protect families from rising power bills;
  • Reduce the need for multi-billion-dollar energy network infrastructure upgrades;
  • Provide greater energy security and resilience, delivering up to 8 gigawatts of energy storage;
  • Facilitate greater home electrification;
  • Support greater penetration of wind and solar into the electricity network, the lowest cost source of energy; and
  • Provide the foundation for significant battery and energy storage manufacturing and lithium value adding industries in Australia.

 

A Small-scale Renewable Energy Storage Target can be easily established through a change in Regulations and limited cost to the Federal Budget.

The Smart Energy Council is confident a new Small-scale Renewable Storage Target will not by itself increase power bills over the next 3 years.

 

The 2 year window of opportunity.

As countries such as India look to invest heavily in new energy manufacturing, of which batteries will be a significant portion of that new industry, Australia has a narrow opportunity to become a R&D leader.

Due to the significant challenges in scaling and providing sustainable margins in cell manufacturing, countries such as India are looking to leverage support from existing suppliers of cells. As many nations try to enter this challenging space, they will require a guiding hand as they establish themselves over the next 3-5 years.

Australia does have pre-existing R&D battery expertise, and capacity in developing advanced cell manufacturing in Lithium-Ion Phosphate batteries. This pre-existing expertise should be leveraged through the ‘Powering Australia Industry Growth Centre’ to scale our volume and R&D expertise. If we do this, Australia has a massive opportunity to be the guiding hand and strong partners with countries such as India and the USA, as they rapidly scale up their own manufacturing.

 

Critical Minerals

This opportunity also extends to value adding through local refining of our minerals. This of course overlaps with the Critical Minerals Strategy also in development. While a number of lithium mines are bringing lithium processing technology onshore, after this process, many look to secure their offtake with large scale battery producers, such as that for electric vehicles.

Encouraging other Australian mining operations to take that leap, and onshore their minerals processing will be crucial as a short-term target for the Battery Strategy. For example, overseas Lithium Hydroxide monohydrate chemical plants are being jointly funded by Australian mineral mining companies. As lithium demand and processing rapidly scales up, Australia will need to act vast to bring more processing onshore, before other competitors establish dominance and unsurpassable expertise.

 

Global leader in high-quality advanced cell manufacturing.

Advanced battery cell manufacturing, with a focus on leadership in cell quality is a unique opportunity for Australia in the battery supply chain. A targeted focus on this section of the supply chain feeds into our natural advantages.

  • Strong R&D Capability – with scale up potential
  • Expertise in technical advanced manufacturing.
  • Climatic Variability for testing
  • High attention to quality control and safety.

 

Currently, there is a wide variety of quality in cell manufacturing, and as an emerging technology provider for gird stability and other grid services, buyers are willing to pay extra for a quality guarantee. Furthermore, there is a significant interest in a diversification of supply chains for advanced stationary battery cells. These two issues in the current market and supply chain, diversity and quality provide another unique opportunity for Australia.

Leveraging Australia’s R&D expertise, Australia can lead in creating, setting and maintaining a new high-quality standard for advanced cell manufacturing. This standard, along with its associated R&D could be then exported to our partner countries, setting a global gold standard for cell manufacturing.

Australia can also engage and scale up its own manufacturing of advanced cells where quality and safety is demanded at a higher standard. This is likely to apply in the cases of small C&I systems, as well battery systems for homes.

 

R&D, Patents and a training and development world leader

This is likely to apply in the cases of small C&I systems, as well battery systems for homes.

Australia should also look to leverage its pre-existing R&D capacity, coupled with the Australian reputation for quality to grow our patent, training and development expertise.

In this way Australia can provide the skills and training to crucial to the global renewable energy transition. Achieving this level of training leadership, means tailoring University courses to specialize in the new skills required, much greater funding in high quality vocational training and ensuring the Powering Australia Industry Growth Centre takes a leadership role in setting the training and development agenda for Australia in the burgeoning battery industry.

This initiative would be greatly enhanced by encouraging local manufacturing to be cost competitive for both the domestic and export market. Ensuring Australia develops our cells with international interoperability, or on a standard platform, will open our developed expertise in advanced cell manufacturing to be simultaneously exported around the world. This means our Australian experts could provide their expertise around the world in world class cell manufacturing facilities. Australia developed world leading expertise in the management of a resource boom, we can, and must do this again in new clean energy boom.

 

Embedding Circular Economy Principles into the battery industry

Governments need to collaborate with industry in order to create a policy and framework that promotes the reuse, and recovery and finally recycling of batteries. There are significant opportunities to achieve this for at least home batteries in combination with the industry led PV Stewardship scheme, recently launched at Planet Ark Power, in partnership with the Queensland Government, the Smart Energy Council and The Activ Group.

Home battery recycling should be coupled with PV recycling, as the removal processes and transportation supply chains will be identical for that of Rooftop PV. This element of the supply chain, de-installment, collection and transportation is the most challenging part of recycling these products in the Australian context. The safety concerns and standards required for battery de-installation are very particular. These skills will lie in the same people who decommission PV, re-enforcing the suitability of tying battery and PV recycling together. We note that later down the recycling process, these products will go through different processes.

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