By Nick Toscano
The world’s biggest fund manager, BlackRock, has raised more than $500 million from local and offshore co-investors to help fund a giant grid-scale battery project in Australia that would rank as the largest in the southern hemisphere.
The $US9 trillion ($13 trillion) United States-based investment giant will make the announcement on Thursday, saying the co-funding from institutional investors and the federal government’s green bank will accelerate the development of the Waratah Super Battery in NSW and bring long-term capital to drive Australia’s transition to a low-carbon economy.
Once completed, the Waratah Super Battery will rank among the biggest grid-scale batteries anywhere in the world.
Funds managed by BlackRock’s infrastructure team will be invested on top of the additional $500 million it has raised from other investors to finance the battery after BlackRock’s Akaysha Energy won the tender to build the project late last year.
As Australia’s shift away from coal gains speed, authorities say big batteries capable of storing renewable energy and dispatching it when it’s needed will play an increasingly important role in filling urgent gaps in supply and stabilising the frequency and reliability of the power network.
Construction of the Waratah Super Battery, located at the site of the former Munmorah coal-fired power station, began in May and is targeted for completion before August 2025, in time for the earliest possible closure of Origin Energy’s Eraring coal-fired power station.
Once complete, the Waratah Super Battery will be the biggest in the country and one of the biggest globally, with 850 megawatts and 1680 megawatt-hours of capacity. It is being designed to act as a “shock absorber” for when the grid faces sudden power surges, including from bushfires or lightning strikes.
Charlie Reid, BlackRock Asia-Pacific’s co-head of climate infrastructure, said the project would help deliver the storage capacity needed to make the power grid more reliable and resilient, and help Australia achieve its renewable energy ambitions.
“We firmly believe battery storage is the critical technology of today – applied both on a small scale in homes and for large-scale battery platforms,” Reid said.
BlackRock’s other co-investors in the project include education industry super fund NGS Super, and the federal government’s Clean Energy Finance Corporation, which has tipped in $100 million.
“The Waratah Super Battery will help stabilise the electricity network and help deliver more of the cleanest, cheapest form of energy for Australian businesses and households,” federal Climate Change and Energy Minister Chris Bowen said.
Australia is experiencing one of the world’s fastest energy transitions as coal-fired power stations, which supply about two-thirds of the main grid, increasingly bring forward their closure dates while renewable energy’s share of the mix rapidly rises.
However, the Australian Energy Market Operator is growing increasingly nervous about the lagging pace of the rollout of new generation and “firming” assets – such as batteries and fast-start gas plants required to back up renewable energy when the wind isn’t blowing and sun isn’t shining – to compensate for coal plants’ impending exits. It has stepped up calls for investors to accelerate financial commitments for urgently needed projects.
BlackRock’s funding announcement on Thursday comes after the investment giant acquired Melbourne-based battery developer Akaysha Energy last year and is embarking on plans to develop battery storage projects in NSW, Queensland, South Australia and Tasmania.
Separately this week, mining giant Rio Tinto revealed on Wednesday that it had started building a specialised laboratory at its Melbourne research hub where it can develop batteries to test how the minerals it extracts, such as lithium, will work in real-world applications.
Australia’s second-largest miner has been pushing to diversify its iron ore-dominated portfolio into lithium – a key ingredient in lithium-ion batteries – and other metals that are needed in vastly greater volumes to build renewable energy and electric cars.
Sinead Kaufman, Rio Tinto’s head of minerals, told a mining forum in Brisbane that the company’s new laboratory at its Bundoora technical innovation centre was on track to be operational by November.
“At this lab we will build our own batteries, allowing us to test how our minerals and other products will perform in real-world applications, such as in ... electric vehicle batteries,” Kaufman said.
“Our battery laboratory will deepen our skills and expertise and ultimately enhance our customer proposition.”
Kaufman told the World Mining Congress on Wednesday that demand for battery metals was set to grow rapidly as governments and businesses across the globe acted to meet the goals of the Glasgow Climate Pact under the Paris Agreement.
Long-term electric vehicle demand and lithium forecasts continued to be “revised upwards”, she said
“The lithium market is expected to grow five-fold between now and 2030, with a significant supply-demand deficit expected from the second half of this decade,” she said. “This means more battery materials are needed.”
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.