Australian Financial Review Article

The Australian Financial Review has written an article regarding the joint investment by the Miles Government & a private equity investor in the U.K.

For more detail, please visit the article here: https://www.afr.com/policy/energy-and-climate/labor-shrugs-off-flat-battery-projects-with-25m-investment-20240923-p5kcp2

Labor shrugs off flat battery projects with $25m investment

Written by Angela Macdonald-Smith, and James Hall.

The Miles government will sink $25 million into Queensland’s first plant to build large-scale batteries for the power grid, shrugging off a series of financial failures of battery-related companies in the state.

The investment – split roughly evenly between debt and equity – will go into the $70 million plant being developed in Maryborough in the Fraser Coast region north of Brisbane. It will manufacture iron flow batteries to be used at state government-owned electricity provider Stanwell Corporation.

An unidentified London-based private equity firm is investing $40 million of equity in the plant, which will make batteries that can store surplus solar and wind power and provide it later over periods of up to 14 hours to power stations, electricity retailers and industrial customers.

Large batteries arriving at the Stanwell power station in Queensland. 

The project is being led by Energy Storage Industries, which holds the rights in the Asia-Pacific region to technology developed by Oregon-based ESS Tech.

Flow batteries store energy in an electrolyte solution that is pumped through a cell to release power. Because iron flow batteries are non-flammable and entirely recyclable, they are regarded as suitable for sensitive landscapes such as national parks, the Great Barrier Reef and residential areas.

Treasurer Cameron Dick said the government’s investment was part of its plan for a new battery manufacturing industry in Queensland to support the government’s ambitious legislated target of 75 per cent emissions reduction by 2035 and net zero by 2050.

The Liberal-National Opposition supported the passing of the targets in parliament but its leader, David Crisafulli, has refused to back a controversial pumped hydro scheme in the Pioneer Valley near Mackay – creating a schism between the two parties’ energy policies ahead of the October 26 state election.

Small pumped hydro plants

Mr Dick said the Pioneer-Burdekin project, along with the proposed Borumba pumped hydro near Gympie, were pivotal to the state’s energy transition plans along with increased storage capacity.

“Crisafulli’s energy policy is to scrap Pioneer Burdekin Pumped Hydro and replace it with small pumped hydro plants,” Mr Dick told The Australian Financial Review.

“Queensland Hydro’s study on pumped hydro storage makes it clear that 60 small pumped hydro plants would be needed to replace Pioneer-Burdekin Pumped Hydro, and to date, David Crisafulli has not revealed where one of those plants would be constructed.”

Construction of the Maryborough battery plant is already under way and is being accelerated as a result of the $65 million investment from the Miles government and the British firm.

The investment in the plant comes after disappointments over three other battery-related companies in Queensland that have fallen into financial difficulties this year.

Rigorously assessed

The failures include Redflow, an Australian developer of long-duration, zinc-based flow batteries, which went into administration in August.

Earlier in the year, Brisbane-based electric vehicle fast-charger manufacturer Tritium and solar-battery system provider Redback Technologies also collapsed.

But Mr Dick said he was confident the new venture would not suffer a similar fate, insisting his department had rigorously assessed ESI’s performance capabilities.

“In undertaking the due diligence, Treasury had the benefit of being able to review existing projects that ESI has with Stanwell and Energy Queensland,” he said.

“In addition, from a technical perspective, ESI and its technology were subject to rigorous due diligence over more than six months, following a similar lengthy process previously undertaken by Stanwell Corporation.”

ESI managing director Stuart Parry said it had taken a different view to some of the other battery companies, working in partnership with existing generators such as Stanwell to help with their needs for affordable firming power in a strategy that reduces the risk.