Energy crisis: Government has been thinking about batteries the wrong way

This week, energy ministers from the Commonwealth, states and territories have met to try to grapple with the energy crisis that has seemingly emerged overnight, but has been 20 years in the making. While many vectors that have led to the spike in wholesale energy prices are global in nature, the path forwards will rely heavily on domestic energy security.

Those arguing that fossil fuels are part of the transition are missing the point. While no one serious is calling for gas and coal to be shut off this afternoon, the reality is we are moving away from reliance on carbon energy. It really isn’t part of the solution.

One missing piece to this puzzle is energy storage. To successfully accelerate towards a renewables infrastructure – while keeping the lights on – energy planners in government and industry need to shift how they think about batteries. At the moment, they are widely seen as a buffer for existing energy infrastructure, rather than the pathway to a new paradigm with widespread renewables and domestic energy security.

Part of the reason is that the incumbent battery technology – lithium – is best suited to quick charge and discharge storage regimes. This is great to support a creaking energy infrastructure as coal and gas plants shut down, but lithium can’t be the whole story, especially with its supply-chain problems and cost difficulties for longer-term energy storage. Other battery technologies need to come online to allow the shift in thinking – and deployment of energy storage solutions.

A great advantage of battery energy storage infrastructure is that it can be deployed within months, rather than the many years it takes to commission new gas projects. To make the shift to renewables, solar and wind plus battery storage is the smart option.

Australia is too slow to embrace renewable energy opportunities

Energy prices are spiking not just because of the transition, but because we are going too slowly to embrace the opportunities that renewables offer. 

An example of what is possible is on view in the nation’s capital. While the rest of us are facing electricity bills going up 20% or more, in the Australian Capital Territory average consumer costs for electricity will drop 1.25% next month.

This is just the tip of the iceberg of what could be achieved. For Australia, renewables remain a vast untapped resource that can not only power energy security at home, but provide a dynamo for energy exports, whether that be projects like Sun Cable, green hydrogen or the export of Australian-made solar and battery technology. 

If we really are leaving the climate wars behind us, we can focus on turning Australia into a world renewables superpower. But to do so will require a reset on battery technology and the support to build batteries here in Australia.

Across the world bottlenecks in global energy supply chains are crippling the energy markets and undermining opportunities for economic growth.

We are now at the point where energy supply is being used as a weapon in warfare, triggered by the Russian invasion of Ukraine. In the US, President Joe Biden has invoked Cold War powers to guarantee access to lithium for battery production.

Gas turned out to be a bad bet

Given the global nature of the crisis, its weaponisation in geopolitics, Australia must accelerate its ability to achieve energy security and sovereign capability through renewable energy. In last year’s thinking, we all assumed gas prices could remain stable through the transition. That has turned out to be a bad bet.

How can we meet this perfect storm head-on with Australian solutions? Battery technology provides a solution today to respond to these energy demands – at zero marginal cost. Once installed, the storage solutions over time effectively pay for themselves.

But we have to start thinking about batteries in completely new ways. They aren’t just our backstop insurance policy for when ‘real energy’ solutions fail, they are the pathway to energy independence and a decarbonised economy. And we can make them here, using recyclable materials with cheap, reliable supply chains.

While lithium will remain part of this solution there is literally not enough of the mineral coming online to meet all this demand. Lithium prices have skyrocketed nearly 10 times in the past 18 months and 80% of the world’s battery grade lithium is still processed in one country, China.

Other metals and technologies, whether it be the zinc used by Gelion or other solutions, will need to be ramped up to diversify supply chains and provide storage solutions that can support a shift to the long-duration storage that needed to make solar work as baseload energy. 

This means investment now in medium- and longer-term solutions and not making energy bets based on an old worldview. We also need to ensure we back Australian solutions or our economy will become reliant on external technology and providers: not clever in the current world political climate.

Accelerated by the EU weaning itself of Russian gas and the US pursuing its energy security, renewables are the rising power. Australia cannot afford to be left behind.


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