BlackRock in $1bn battery charge after buying Akaysha Energy

The world’s largest money manager, BlackRock, will pump over $1bn into a string of big batteries across Australia after buying Melbourne storage developer Akaysha Energy.

Akaysha battery storage systems, which will be rolled out across Australia after the BlackRock deal.

The world’s largest money manager, BlackRock, will pump over $1bn into a string of big batteries across Australia after buying Melbourne storage developer Akaysha Energy, with plans to develop facilities the size of a coal station by the end of this decade.

BlackRock Real Assets, an arm of the $US10 trillion ($14.2 trillion) investment giant, expects to deliver all of Akaysha’s nine battery projects under development in Australia, followed by a move into Japan and Taiwan and an expansion into green hydrogen.

The buyout and $1bn spending commitment represents the biggest green energy play yet in Australia by BlackRock. Previous deals include two Queensland solar farms and a stake in former advertising executive Doug McNamee’s Jolt, which wants to install EV chargers around the country.

Akaysha’s nine projects span several Australian states including the 200-400MW Orana battery at Wellington in NSW’s Central West, the 150MW Ulinda Park facility at Western Downs in Queensland and Palmerston in Tasmania.

Combined the plants will deliver over 1GW of storage to the national electricity market between 2025 and 2027. Only three of the project locations have been disclosed, with the rest of the pipeline to be rolled out in the next few years.

The company was formed just over a year ago by former Macquarie Capital, AGL Energy and Tesla executive Nick Carter, along with half a dozen other experts across energy, engineering and finance.

“We effectively just boot-strapped our way along to start the initial development of all those assets and then we started working with BlackRock three or four months ago,” Mr Carter told The Australian.

“They can see the value in the team and obviously having BlackRock’s capital resources behind us allows for the acceleration of those first nine projects.”

BlackRock’s Asia-Pacific co-head of climate infrastructure Charlie Reid.

Giant batteries of 700MW are already planned at the site of big coal-fired plants such as Origin Energy’s Eraring but the Akaysha managing director said 1GW-plus batteries rivalling the size of some coal sites would eventually be rolled out in Australia.

“There’s no real limit in terms of how big you can make them because they are so modular. You’re literally just adding more sections on and in fact you’ll probably see a trend where you can come back and add more capacity over time,” Mr Carter said. “So there’s no real limit. I would say before the end of this decade, you will see multiple gigawatt-class storage systems in Australia.”

BlackRock, a major shareholder in AGL Energy, is open to developing broader relationships in green energy as it expands its footprint in Australia.

Akaysha plans to add renewable energy assets, including green hydrogen assets, to its portfolio across both Australia and Asia.

“We’ve been focused on finding a particular business that we can back and that is Okaysha,” said BlackRock’s Asia-Pacific co-head of climate infrastructure, Charlie Reid. “Having said that, we’re open to all forms of partnership going. Project development often comes down to partnership.”

Labor has proposed a 82 per cent renewables target by 2030, nearly triple current levels, requiring an enormous influx of investment over the next few years.

Still, BlackRock has backed the ambition of the Albanese government’s goal. Mr Reid said international experience had revealed the appetite for green spending over the last decade.

“What I would say looking back over time is that globally renewable energy targets have been set. They have looked very ambitious and sometimes unattainable, but generally they’ve been met. Because the technology has been there, the suppliers have reacted, the costs have come down, and the market has found a solution,” Mr Reid said.

“So I believe that we will hit that level of renewable energy penetration by then. I believe that globally we will get to net zero by 2050. And batteries are going to be a key enabler to ride through some of that volatility (through the transition).”

BlackRock has been under pressure from climate change activists to take a more aggressive attitude to selling down its stocks in fossil fuel industries.

In January boss Larry Fink ruled out selling shares in carbon-intensive companies such as oil and gas firms, arguing that they have the potential to be “phoenixes” by transitioning to a net zero world.

Some 150GW of energy supplies, nearly triple the current generation and storage capacity of the Australian market, has been proposed by companies and investors by 2032. Large-scale solar and wind backed up by battery storage account for 88 per cent of the project pipeline.

Nearly two-thirds of all coal capacity will be shut down by 2030 under forecasts by the Australian Energy Market Operator.

Renewable developers and network operators are also worried a pipeline of power generation and clean energy supplies faces delays or gridlock unless major electricity transmission projects are delivered across the national electricity system.