QLD adds $210 million to battery industrial strategy

QLD is looking to build a battery supply chain in the state. The Miles state government announced its intention to bring the funding available to its Battery Industry Strategy to more than $500 million.

The $210 million in new funding will go towards establishing “capabilities across the value chain” including the establishment of standards and testing, the government announced on Thursday, Feb. 22.

“Building a Queensland battery industry creates jobs here in the Southeast in mining critical minerals in the North West, in minerals processing in Townsville and new clean economy jobs across our regions including Cairns, Gladstone and Maryborough,” said state premier Steven Miles in a statement.

The $570 million in total funding will look to develop and commercialise new battery technologies, drive investment into projects across the supply chain, and to promote QLD-made “advanced materials and batteries” in international markets.

The QLD government hopes that the battery industry could create over 9,000 jobs and contribute $1.3 billion to the state’s economy by 2030.

Life after coal

The state’s battery industrial strategy appears to be an attempt to foster a new economic segment in the state as coal export revenues decline over the decade. By targeting battery material extraction, processing, and end-product manufacturing, the government is hoping to establish an energy storage supply chain throughout the state.

“As global economies decarbonise, the demand for battery storage is set to grow exponentially. There are incredible opportunities right across our state, from recovery of critical minerals to the production and refining of advanced materials, manufacturing, and integration of battery packs,” said Grace Grace, the minister for state development and infrastructure.

The strategy is a marked departure from Australia’s approach to renewable energy development in the past. The country has been instrumental to the development of technologies and the training of engineers that have played a crucial role in the development of China’s solar manufacturing segment – with the UNSW and ANU playing leading roles.

However, PV production at scale in Australia was not established. Australia’s largest solar manufacturer is Tindo Solar in South Australia – which is a module assembly operation. Tindo announced plans to expand its production from 150 MW to 1 GW, by the end of 2025. Meanwhile, China has captured huge market share across the PV supply chain – 89% of polysilicon, 96% wafer, 85% cell, and 77% of module production, according to the latest data from BloombergNEF.

QLD’s industrial strategy for batteries is part of a global trend in the clean technology sector and renewable energy industries. China has long been supportive of its clean technology manufacturing sector, solar, energy storage, and EVs, although the details of these policies are rarely transparent.

Industrial policies

Outside of China, the Biden Administration’s Inflation Reduction Act (IRA) has seen a surge of investment in the United States, and India is heavily promoting solar production across the PV value chain. The EU’s Repower EU has moved in the direction of an industrial strategy, yet the implementation of supportive policies have been slow in the bloc.

There are significant risks in attempting to foster manufacturing in highly competitive and cyclical clean technology manufacturing markets. Low lithium and nickel prices are evidence of how cyclical demand can impact operations in Australia.

In terms of solar, there will be considerable challenges to developing domestic manufacturing at a scale that would be internationally competitive. PV module prices declined more than 40% in 2023 and have put in doubt some manufacturing plans in the US, despite the generous subsidies available under the IRA.

Speaking to solar manufacturing, Wood Mackenzie analyst Steven Knell said the cost reductions achieved in China present a formidable challenge for producers elsewhere.

“There are multiple dividends through these industrial strategies like domestic employment and getting a more resilient supply chain, but from a cost standpoint the contest is over,” Knell told pv magazine Australia.

“They have been able to get costs down to a point that from a competitiveness standpoint it looks conclusive.”

Battery production, however, may produce more opportunities outside of China. Australia is home to many of the critical minerals required for a range of battery energy storage technologies. And the development of battery manufacturing is less mature than solar, presenting more opportunities.

New technologies, as encouraged by the QLD battery strategy, could well find a place in the fast-growing energy storage marketplace.

“Some of the long money coming into the sector, for those with proprietary technologies that look like they have legs, there is more than enough room at the table – particularly if they are innovative technologies with a cost and environmental footprint advantage,” said Knell.

Consultancy Accenture prepared a discussion paper for the QLD government, which informed the formulation of its Battery Industry Strategy. The paper found that QLD alone will generate 26 GWh of demand for batteries through 2030, with 63 GWh nationally.

On Feb. 19, Steven Miles took part in the ground breaking ceremony for the state’s latest large scale battery project, the 250 MW/500 MWh Swanbank battery. It is deploying batteries from Tesla, which are produced at factories in the US or China.