Australia releases its first national battery strategy

Australia has released its first national battery strategy today, which includes fostering a stationary storage battery manufacturing industry although it provided few details on how this will be achieved.

"Batteries are a critical ingredient in Australia's clean energy mix," said prime minister Anthony Albanese today. "We want to make more things here and with global demand for batteries set to quadruple by 2030, Australia must be a player in this field."

The strategy — part of the country's Future Made in Australia agenda Albanese unveiled last month — involves Australia targeting energy storage systems manufacturing, downstream mineral processing, and providing batteries to the domestic transport manufacturing sector.

Australia will need 19GW of energy storage capacity in the country's grid by 2030 to hit the country's 82pc renewable energy target for that same year, with capacity requirements surging to 43GW by 2040, according to the strategy which cites forecasts from the Australian Energy Market Operator. The strategy thus outlined a vision for the country to build out its stationary storage battery manufacturing industry for a renewable energy transition. Australia added 1.3GW of battery storage capacity in 2023, more than doubling on the year, according to IEA's Global Critical Minerals Outlook 2024.

Financial investment commitments to utility-scale renewable energy projects in Australia fell to their lowest level in 2023, according to its Clean Energy Council, which began tracking investment data in 2017.

Australia also seeks to process the battery minerals it produced into active materials for electric vehicles (EVs) as well as produce batteries for "heavy vehicles and equipment Australia excels in manufacturing".

The national battery strategy will be supported by announced initiatives such as the A$523.2mn ($347mn) Battery Breakthrough Initiative and the A$1.7bn Future Made in Australia Innovation Fund. Australia earlier announced an estimated A$7bn under its July 2024-June 25 budget that will be used to support critical minerals projects for up to 10 years, implementing tax credits valued at 10pc of processing and refining costs for Australia's 31 critical minerals.

"It's inexcusable that we supply half the global supply of lithium but produce less than one percent of the world's processed battery components," said the country's minister for industry and science Ed Husic.

Australia accounted for 46pc of global lithium extraction in 2023, which translates to around 456,780t of lithium carbonate equivalent, according to the Office of the Chief Economist's March Resources and Energy Quarterly report. But its market share is projected to fall to 32pc by 2029, owing to strong upcoming output from other countries entering the arena such as China, Zimbabwe and Argentina.

By Joseph Ho