Miners and manufacturers have until 3 March to comment on … – Clayton Utz

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The NBS’ key focus appears to be to promote investment in each step of the battery manufacturing value chain, each step of which is captured by one of the strategy’s four themes.
The Federal Government’s National Battery Strategy puts the Australian minerals and energy sector clearly at its core. If you are in these sectors and have not made a submission, you have until 11:59PM AEDT on 17 March 2023 to do so.
Below, we explore the main issues the sector should be considering in any submission.
The NBS forms part of the Federal Government’s suite of plans for electrification and emissions reduction, such as the National Electric Vehicle, Rewiring the Nation and Critical Minerals Strategies. Its aim is to support the development of Australia’s battery production value chain and encompasses support and direction at each stage – from mineral inputs to manufacturing and end-use implementation.
Critically, the NBS calls out the following funding targets which miners, manufacturers and energy generators may be able to take advantage of via the proposed National Reconstruction Fund (NRF):
The NBS’ key focus appears to be to promote investment in each step of the battery manufacturing value chain, each step of which is captured by one of the strategy’s four themes.
The Issues Paper correctly identifies that Australia holds vast reserves of the key minerals involved in battery manufacture such as nickel, cobalt, graphite and vanadium. In concert with the Critical Minerals Strategy, a key focus of the NBS is to leverage Australia’s mining value chain by:
The Issues Paper touches on the need to expand on and invest in R&D and education to leverage Australia’s domestic-know-how and human capital to progress battery technologies, IP and manufacturing processes.
In addition to the potential government support via the NRF, the Issues Paper flags the need for an estimated investment of A$17bn to A$23bn in Australia’s battery industries by 2030 to ensure the necessary diversity and scale for the industry to be competitive with international competitors such as China and the USA.
 
The Issues Paper calls out the following, which we consider will take centre stage in the battle for private investment in Australia’s future battery industry:
The movement away from traditional fossil-fuel energy generation to renewable generation with battery storage (and gas-fired peaking generation) is likely to result in a fundamental shift in the way in which the electricity generators deliver supply via the National Electricity Market (NEM). This is likely to be supported by a national battery strategy.
We would expect that a national battery strategy would encourage investment into local, small-scale battery storage by residential, commercial (and to an extent, industrial) energy users. Combined with the already increasing fulfilment of domestic energy needs by “behind-the-metre” production means (eg., solar), it is expected that energy generated by large-scale weather-dependent generation plants will need to be complemented by dispatchable battery storage so to fulfil demand gaps and address the increasingly steep impacts of “peak ramps”.^[1]
Battery storage is likely to assist, but the challenge for energy generators will be to balance supply and storage capabilities to cater for:
In AEMO’s recently published Electricity Statement of Opportunities (ESOO) for the national electricity market, it was clearly and directly acknowledged that in order to make the most of the myriad renewable generation sources joining the grid and to avoid the problems experienced in 2022, which culminated in suspension of the electricity market for several days, long duration storage capabilities are urgently needed. The CEO of AEMO, Mr Daniel Westerman, is quoted as saying: “Investment in firming generation, such as pumped hydro, gas and long duration batteries, is critical to complement our growing fleet of weather-dependent renewable generation to meet electricity demand without coal generation.”
An NBS will likely result in the increased demand for investment in mining, domestic refining of key battery minerals and the manufacture of batteries and battery components. We expect this increased demand will also bring with it increased scrutiny as to how the miner, refiner, or manufacturer:
The NBS Issues Paper considers the “colocation” of relevant mineral extraction with their subsequent end-use. The key focus of this appears to be to minimise the cost-base of each component of the battery value chain, in order to compete with lower-cost battery manufacturers such as China and the USA.
We therefore expect to see targeted grants, investment, government-equity and government-matched funding in battery hubs, given they ultimately decrease the cost of battery infrastructure by:
The Federal Government’s end goal appears to be to see those savings passed on to end-users and so we suspect there may be increased scrutiny as to the pricing of various minerals, components and end-products.
Consultation on the NBS Issues Paper calls for submissions can be made until 11:59PM AEDT on 17 March 2023.
Please contact us to discuss your proposed submission and what a national battery strategy could mean for your battery or minerals project.
^[1] Rapid fluctuations in supply and demand driven by weather-dependent solar generation driven by the reality that times of high-supply (eg., middle of the day) may not necessarily match periods of high-demand (eg., early evening).

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