Morgan Stanley predicts one million Australian households could install battery storage by 2020 – but it could be double that. The incumbent utilities, it says, are misreading the market, and it has downgraded one of the big utilities because of it. The finance group has issued a detailed report, Asia Insight: solar and batteries, which provides one of the most positive outlooks for battery storage in Australia. Due to its bright sunshine, high electricity prices and the large number of solar households, they suggest Australia could be considered a testing ground for the world. That is one reason why the likes of Tesla Motors, an American automotive and energy storage company that designs, manufactures, and sells electric cars, electric vehicle powertrain components and battery products, are using Australia as the launching pad for their global products.
“To put demand growth into perspective, in August 2015, Panasonic, the sole partner for Tesla’s Gigafactory in the USA, said that it is expecting a compound annual growth rate of 74.9% in batteries that can power your home or office block, and 16.9% in automotive applications,” said Neometals Managing Director Chris Reed. Demand for lithium carbonate equivalent (LCE), which is used in batteries for hybrid and electric vehicles, is forecast to rise from current resources of 200,000 tonnes LCE to over 600,000 tonnes LCE by 2025. “The Australian Renewable Energy Agency also published a report predicting a ‘mega-shift’ to energy storage adoption. This will be driven by demand from the supply side, as networks work to adapt to increasing distributed and renewable energy capacity, as well as from consumers wishing to store their solar energy. Added to this, the cost of lithium-ion batteries is forecast to fall by 60% in less than five years,” said Mr Reed. The Mount Marion lithium project is set to become one of the world’s newest major sources of lithium raw materials to the lithium battery industry as production of spodumene concentrate commenced in mid-2016. Located 40 kilometres south-west of Kalgoorlie, the project is jointly owned by Neometals Ltd (13.8%), Minerals Resources (43.1%) and Ganfeng Lithium (43.1%). Production of concentrates from Mount Marion will be the first stage in a secure supply chain for the planned lithium hydroxide (LiOH) plant that Reed Advanced Materials (RAM), with its partner Mineral Resources, is developing by utilising its patented ELiTM Process. The ELiTM Process converts spodumene directly into LiOH and dramatically reduces production costs for supply to the rapidly growing electric vehicle lithium-ion battery industry. To begin with, Ganfeng Lithium – the leading diversified lithium producer in Jiangxi Province, China – has agreed to purchase 100% of the initial production from Mount Marion in order to supply its own conversion plants. Construction commenced at Mount Marion in late 2015, and first shipments are expected in late 2016. In addition, Reed Industrial Minerals (RIM) has recently completed a major resource expansion drilling program which has resulted in the resource increasing from 23Mt to 60Mt @ 1.36% Li2O. Further resource increases are expected as drilling continues. The increase in resources has allowed consideration of production expansion as existing plant capacity has ample capacity for increased production rates. The most exciting development for Neometals and Mineral Resources, however, is still to come. The ELiTM Process is in advanced stages of commercialisation and, ultimately, RIM plans to supply concentrates to its sister company, RAM, to produce 20,000 tonnes per annum of LiOH within the next three to five years. LiOH is a premium-priced product, and is the fastest growing lithium sector used in battery raw materials. It is in relatively short supply due to limited production capacity and few producers capable of producing the required quality. The lithium hydroxide plant, combined with the Mount Marion mine, will establish a secure, integrated, high-quality, battery-grade LiOH supplier to the next generation of electric vehicles and large-scale renewable power storage installations.