Episode 13: The many benefits of batteries in Australia’s energy mix

Australia has long been an innovator in the development of batteries. At a time when wind and solar offer significant cost reduction opportunities, and we see interest growing in distributed energy solutions, particularly behind-the-meter solar, Australia’s battery industry is set to boom. In this podcast, Energetics speaks with Jacques Eksteen of the Future Battery Industries Cooperative Research Centre about the benefits available to energy users, the maturity of the market and advice for corporates evaluating behind the meter battery solutions. 

Featuring: Dr Gordon Weiss, Associate, Energetics and Jacques Eksteen, Chief Operating Officer, Future Battery Industries CRC in conversation with Anita Stadler, Associate and Renewables Market Lead, Energetics

Note: The information and commentary in this podcast is of a general nature only and does not take into account the objectives, financial situation or needs of any particular individual or business. Listeners should not rely upon the content in this podcast without first seeking advice from a professional.

Transcript

Speaker 1: 0:05

Welcome to the energetics exchange podcast conversations with energy and climate experts. Please note that the information and commentary in this podcast is of a general nature only, and does not take into account the objectives, financial situation, or needs of any particular individual or business business should not rely upon the content in this podcast without first seeking advice from a professional.

Speaker 2: 0:30

Hello, everybody. And welcome to the energetics podcast series. I am Anita Stetler and associate with energetics. And today I'll be leading a discussion on developments in the world of batteries with two experts to help our customers make sense of what has become a crucial technology in the transformation of not only our electricity system, but also mobility more broadly. Uh, joining me today is Jack[inaudible]. Jack is the chief operating officer of future battery industries, which is a research center and collaboration of almost 60 industry participants at universities to CSRO as well as governments. Hello Jack, and thank you for joining us.

Speaker 3: 1:09

I need to, and a hello to everyone else.

Speaker 2: 1:12

I would also like to welcome my colleague, dr. Gordon bias, energetics associate, and longterm analyst and commentator on clean energy technologies and developments in Australia. Hello Gordon, and welcome John Jax. If we could start with you the road of batteries as long been talked about as a critical component of Australia's transition to a clean energy future every week. And in fact, we hear people announcing plans to, to install battery. So people are starting to feel like we've our refugees arrive. We were here, but I'd really like to hear from you. What do you think batteries offer and where are we on this journey?

Speaker 3: 1:53

Thanks, Anita. Um, I think, well, let's start with way we started as a country after the black house that we saw in South Australia, um, that, that initiation that we saw through the big Tesla battery at the wholesale power reserve, um, really kicked off, um, what's been happening in Australia in terms of large scale grid utilization of batteries. Now subsequently there have been a large number of batteries, either run as Island and systems. So basically off grid or with Ingrid and batteries. And, uh, most of these have been actually Tesla installations, but there are a whole range of battery types and Australia are utilizing a range of lithium batteries, but also other things like such as the 19 redox flow batteries, which is part of a larger group of flow battery systems. These batteries we see in auto Augusta, some developments there, particularly around the clean steel development as well, also in the Northwest of Western Australia as, as a big example. And the key thing really is to fit the battery needs with regards to also your photovoltaic and your wind power generation, particularly given that you don't necessarily, particularly if you match those to the wind and the solar, you don't need batteries to cover the total non-solar incidents periods such as, you know, overlap because the wind can play a significant role to basically keep a certain level of provide certain level of power. So then if you just look at what is required as an extra in terms of storage batteries, sensibly fulfill that role. So in terms of Australia, we see very large object, particularly as it was realized to match our uptake of rooftop, solar, which has been actually well leading in many ways, but there's been a lot of instabilities that came with that uptake. And those instabilities can now be handled through battery pack installations, either behind the meter or at a community, uh, battery levels as well, um, where you'll have larger batteries within the community, but still within the micro grid type of system.

Speaker 2: 3:54

Guess what you're saying to some extent, Jack is that the application of batteries has really started spreading as really from the initial carnal single kind of application, as it moves along the maturity curve. There's clearly been broad application found for this technology. So we sort of at the start of a curve where the uptake, you think which spreads.

Speaker 3: 4:12

Yeah, I do think so. I do think also look, there are two levels of development in Australia. The one is say the uptake we would like to facilitate through our future battery industry, CRC is to facilitate that uptake at various levels, not only within grid and micro grids, but also in defense in mining and agriculture, was there a range of applications where particularly for remote areas as well? So it's not only for the urban areas, but the remote areas are ideal for, for application of batteries and raw. And we've got so many remote areas in Australia. So Australia is actually a poster child for a remote area application of battery systems. On top of that, we've also got the electric vehicle developments as well, but they are driving two totally different outcomes. So electric vehicles is all about air quality and about health, for instance, removing diesel particulates and mix gases from an atmosphere. Whereas when we looking at battery use in grids, it's all about the environmental impact, the de-carbonization drive, and basically providing what I would view as three major services. The one is storage, which is the one that's expect to be. The other one is what we call arbitrage function. And then thirdly, typically what we see is the role that it has with regards to voltage and frequency control and therefore the ancillary services space. So to fall three important services in this energy distributed energy systems,

Speaker 2: 5:34

When Gordon, you were quite keen to see energetics get involved with the future's batteries, CRC, uh, why was that? If you reflect on what Jack has just shared with us?

Speaker 3: 5:44

Yeah, an interesting question. If I can just pick on two at the moment, commented on the role of batteries in the pack to stabilize power grid

Speaker 4: 5:58

And the Australian energy market operator who operate now electricity, major electricity markets, I produce what's called the integrated system plan. And in that their view is that Australia's electricity grid of the future. The lowest cost option is one with a high fraction of what are called variable, renewables, wind, and solar. And they therefore see a roll of batteries and quite substantial volumes of that, of batteries to produce that low cost electricity all the time. And the position of an email is that we will, Australia will have cheaper electricity if we allow the growth of the variable renewables and support them with batteries. Now what's interesting as well is that many people know that the most sophisticated solar cells in the world, the ones that are now all produced in China were in fact discovered and continue to be developed in Australia. It's the solar energy group under Martin green professor Martin graded us do that. And Australia is a nation compliance. So we let that technology go jacks earlier talked about the different types of batteries. One of the mentioned with the writing flow batteries, well guess what the vanadium flow battery, it was also invented in Australia. It went overseas. And I think it's interesting. The CRC is the theater, the future battery industry. And we as an Australian company, we're really keen to see Australia develop a battery industry rather than just digging the raw materials like the way it was a very good comment by Elan Musk that everybody talks about lithium ion batteries. They're actually Nicol carbon batteries. And so much of the world's good nickel reserves are in Australia. We don't want to just dig them out of the ground and send them overseas. We want to feel send battery cells overseas

Speaker 2: 7:57

To some extent that the, that the CRC, you see it as a kind of incubator for potentially a significant future industry for, for Australia. And, uh, and it probably couldn't come at a better time while everybody's looking for some green recovery in the post covert era. So, uh, on that note, uh, Jacques, can I ask you, if you had to think about what would you like to see come out of the future battery industry CR

Speaker 4: 8:20

See, and these are things, a number of things we typically want to see at the end of the CRC far more cohesive industry, because we firstly, there was a lot of fragmentation when we set it up two years ago, we seen a lot of expertise in Australia. Gordon mentioned, you know, that we eventually develop things like the millennium Redux flat beds. We have developed like things like the zinc bromine battery at the university of Sydney. They've got the gel line company with multiple examples of Australian technologies. We also, some of them have gone and worked Tesla. So

Speaker 3: 8:56

Firstly, the strength is there within our expertise. We've got the raw materials and we also leading in terms of the uptake, but this is a solid, nice the industry and we have to get this industry to work together. So the CRC for full multiple roles that are one is to stimulate research and development, particularly in what we would call high technological readiness projects. So projects that are, you know, off the bench scale, it's really trying to, with a pathway towards commercialization, also running things like field trials that we can prove technologies and get the confidence in technologies is really important. We fulfill a role in advocacy. You know, this is the one thing that is important for us, unlike the mining industry or the oil and gas industry. And so on. All of these have got fairly strong lobbying groups and has got a voice in Canberra and so on. We can't really say the same other battery industry at the moment, more the chemical industry that is supporting it. So serving provided advocacy on behalf of its participants, but the greater industry is really important to us to ensure that we grow this industry to grow the small and medium enterprises, as well as the large businesses that are already existing in Australia and also to attract foreign investment. One of the key things that we would like to see is when companies touches,[inaudible] find since that's one of our participants come and say, well, they want to, let's say want to invest in some of our facilities in Australia or some other downstream we'd be at LG chem or Panasonic or whoever would say there's actually some sense in investing in Australia. Um, but also investment in things like our, our services sector is important. Investment in recycling activities would be important and investments in the battery uptake in terms of deployment would be important. So a whole range of things that we want to see there.

Speaker 2: 10:41

So that's not contested range of opportunities. Then

Speaker 3: 10:44

I would also add that, you know, we've got for instance, um, education and training that we want to do as well, and then stimulation of the entrepreneurial activities in the space. So we've got to also bolt in the system. We've got incubators and accelerators for the SMEs to grow them and to look for ways to basically accelerate the growth in this industry.

Speaker 2: 11:06

Fantastic. So that's obviously on the supply side that you've touched on a lot of points there, but Gordon, if I can flip back to you maybe on while all this kind of advanced research is going on, what is it that businesses today could actually benefit from through either association with the CRC thinking more of the energy uses and the application of batteries

Speaker 3: 11:24

In our client environments in general? A very good question. Question reasons why the third reason was supporting out, watching for electricity behind the solar offers very low cost electricity, certainly compared to buying that electricity as shocked as already to it. The problem with solar

Speaker 4: 11:54

Is it doesn't work very well at night. And people say, well, maybe if we had a battery, we could capture the solar energy during the day to use it in the evening. I mean, that's the market employ of people like Tesla with their power wall and many of the other battery manufacturers offer similar similar products. Well, that works for businesses as well. If a business has a evening electricity demand, which tends to be high price electricity. If I have five, the meter solar cells, they can put in a battery and use the, some of the surplus electricity from the solar cells to supply some or all of their needs in the evening. And they'll end up with cheaper electricity and what can make it even a more compelling argument. If they then have a look at how do they manage the demand? Are there options for energy shift from the times when electricity is expensive to the times when electricity can be another role for batteries as well. So if you look at this holistic approach to managing energy on the site, through a combination of behind the meter, solar behind the meter batteries and the beta demand management, you can end up with quite a significant reduction in the cost of your electricity. And I guess more importantly, you get a surety of supply and also surely longterm costs because you're no longer at the mercy of the, uh, the power companies. You could push up, push up your electricity prices, plenty of opportunities for businesses.

Speaker 2: 13:29

So as you're talking there reminds me a little bit of a couple of years ago when we talked to a lot of businesses, they felt that they, their doors were knocked down with solar developers coming in and just selling them whatever kit was available at the time. And much later on, I think there was EMA started raising issues around some of the quality of some of the equipment that's been sold. So Jack is probably more a question for you here, um, because we probably are entering a similar stage for storage and for behind the meter kind of storage solutions for some of our customers where I think salespeople essentially come, comes through the door literally every other day with a battery solution. So what would you advise corporate considering behind the meter battery solutions? What is the criteria to screen it's effectively a solutions that they should consider? If you could give some guidance there? I think people would welcome that.

Speaker 4: 14:22

Thanks. And these are other range of issues. We always have batteries on the fit-for-purpose spaces. So there are going to be a range of criteria that varies from if it's beyond the mutual, if it's a community battery or a gridscale battery that we have to answer for ourselves, because we got so many different battery chemistries, they all depend on those criteria. So for instance, you would look at cycle life, what is the power that you actually want to deliver? So that's the Watson and Watson

Speaker 3: 14:52

We actually want, but then there's the total storage like the megawatt hours or kilowatt hours. The charge rate that we have to look at because of the charge rate would also lead up to heating and actually impact the battery. If we over discharge overcharge and the right, and also the right of that charging, the safety is naturally a key issue because you've got batteries that are not, for instance, a conventional lithium ion batteries would have a organic solvent with a highly reactive electrolyte, which if that opens up to Apple's sphere that can burn, it can actually, you know, it can catch fire. And if you, if you've got a short circuit and some batteries, and then you can actually cause a significant battery fire and it can start with one cell and then propagate through a bunch of cells in through the whole battery pack. So when we look at batteries, selection of batteries from a safety perspective is really important and there are other alternatives as well, like with the flow batteries, as an example, the flow batteries are aqueous because they increase the non-flammable. Then there are other issues such as capacity fight. How does the capacity of that battery go down over time? And we all experienced that for instance, with our mobile phones after two years or with our callbacks, for instance, then the number of cycles, um, that's important. The footprint is another thing. So for instance, a flooded battery is a large, it's a large battery. It typically takes up much more space and it's going to be running, uh, you know, unless you've got a reasonable amount of space at home, you typically won't necessarily run one at home, but there are new developments that actually would even look at flow batteries for home applications, although for a community battery, it definitely starts to make sense because you've got a centralized facility, but the one thing that's good of these batteries at least is that they, because the non-flammable and some of the risks associated with fire is mitigated. And that way other aspect naturally that are important or recycling. How are we going to think around the recycling of cells and batteries and designing the battery packs for recycling? And then lastly, but if not the least is the cost, I mean, there's a huge difference in the various battery costs and different chemistry. So every chemistry, even within the lithium ion battery space, there are a range of chemistries and each chemistry brings with it, its own cost, its own safety factors. And in short to get back to, you know, what do you do? It's actually quite, I think it's dangerous at times to just believe the first vendor that comes to you. I think it's important therefore, to use the future battery industry, CRC as an example of an organization that can provide some guidance in the space, but there are also battery manufacturers in Australia, um, that can provide guidance. And there are companies such as radars in Queensland. There are companies like Magellan power in Western Australia that actually manufacturers battery packs, they work with a whole range of cell chemistries and types. And can often advise as to the best type of battery that you would use for a given application, whether it's at home or whether it's at an industry level or at a mine or within the electrical utility space.

Speaker 2: 17:54

Really, it's a very complex space where I think companies are well-advised to seek expert advice to really kind of navigate not only the chemistries, but really consider obviously as the size, the capacity of these batteries, how well it actually kind of retains that capacity over time. And the recycling, I think, is something that you've raised. And I think even in the, in, in the green circles, I think there's often a lot of concerns being raised around the industry's capacity to deal with waste from the renewable energy sector broadly. But, uh, batteries adds to that. I think you touched on cost as well. Whereas when Gordon was talking earlier about all the behind the meter kind of, uh, applications for storage, I think many, many businesses are still struggling to kind of make the business case work. So there's much talk often that yes, batteries may follow a similar kind of cost trajectory than solar. And then there's obviously your skeptics in the market that reckons it's unlikely to follow a similar path. So I would, I wouldn't mind hearing your view

Speaker 3: 18:56

If we just look at a battery, firstly, there is a battery has got as battery management system mates controls and the cells. And we often sometimes think of a battery and we think of that AA, AAA batteries. We talk about home, but that's not the better than the a cell. And, and so there's overall battery pack costs. Um, when we talk about cells, we typically targeting, you would see, uh, particularly in electric vehicles as well, uh, prices off the low, a hundred us dollars per kilowatt hour. When we talk about vanadium redox flow batteries, they typically tend to be more expensive, but they cover a different needs. So as I've mentioned earlier on an annual redox flow batteries, you know, it can be between 500, 600 Australian dollars. A the earlier one that I mentioned with regards to the a hundred dollars per kilowatt hour was four us dollars per four for NMC type of, of lithium ion batteries. So often one type would be more expensive than the other. But for instance, if we talk about a flow battery, you don't have to recycle that you basically just at the end of the 20 years, you're going to pump out the electrolyte and tee it up and just pump it back in. And you know, only you go, you don't have to replace the whole battery, whereas that's what you need to do after seven or eight years, or maybe longer might be nine years for lithium ion batteries. So there are the total cost of ownership, which is different to only the cost of a given cell or a battery that one needs to take into account. So there are two forces. The one is the market forces wanting a cheaper battery and mass production, which would lead to cheaper production costs. But on the bottom end, there's also a constraints with regards to the raw material costs a significant portion, but battery is the actual cost of the materials. And those are metals that come from mines, which are constrained by, you know, the, the mines that are available and that automatically puts a floor price

Speaker 4: 20:48

In terms of, of where we can go. We don't, we can't wish more minds. They are, they were there on geologically speaking and we therefore have to deal with what we have and they are further geopolitical and other trade constraints. It might even limit the market and supply side further. So there are supply side constraints and the supply side constraints will provide the floor in the space. The ceiling, on the other hand, all prices are linked to what is the customer willing to pay. And naturally for instance, with electric vehicles, as an example, there's a certain limit beyond which the general person would not buy electric vehicles. So there's the upper and lower bound. And you put both of those areas to play with within that space, according to forecast so that you are, do you want to venture a guesstimate as to when we will see mass uptake of storage and sweaty and businesses very risky to has the estimate? My simple answer would be well best to talk to the experts in the Pedro battery industry, CRC, because they know that could be within five years, depending upon the cross trajectory. Cause some commentators have very aggressive price reductions, as jock said, it's more complicated in terms of the logistics or the reasons why we have future battery industry CRCs, or look at some of these questions still with supply. So time will tell, but we recommend to clients keep a watch because it is a rapidly changing space. And clearly from what you're saying is there's no technological winners here, the different technologies would be suitable for different applications. And I think there's definitely a couple of more podcasts in here to possibly explore these different technologies and the potential application within Australian industry. But I think also the opportunities is for businesses to invest in this industry is, is clearly a fantastic opportunities that at the CRC can help to promote bringing that cohesion, driving that proof of technological concepts is very, very critical. I think for an industry that has great potential in Australia. And I think the advocacy voice that you bring to this particular issues of the industry, I think is fantastic. So I really thank you for your time, John. I have to be with myself and Gordon today and to our listeners. If you have any questions or comments regarding, uh, the discussion here today, please feel free to reach out to us on our website. Thank you very much. Energetics exchange podcast conversations with energy and

Speaker 5: 23:20

Experts.