Altech’s power-to-production

On an April Tuesday evening in sunny California, a few astute energy watchers noted an easily missed but remarkable event.

For about two hours in the nightly peak, it was not hydropower, gas, nuclear, sun, nor wind providing the biggest input into the Californian grid – but battery storage.

Insiders at Australian-based Altech Batteries certainly noticed, with the technologists steadily building the company’s capabilities towards commercial production over the past few years to tap into a massive, still-burgeoning energy storage industry.

The world’s energy storage market almost tripled in 2023 with the addition of 45 gigawatts, and this year is set to add more than 100 gigawatt-hours of capacity into a system likely to soon quintuple.

It is a megatrend, and one that Altech intends to be entrenched in with its early mover advantage.

First production

Few observers would remember when Altech acquired a 14-hectare industrial site in the German state of Saxony.

But that site is now marked for manufacturing after a definitive feasibility study showed excellent economics for a first Altech production line.

The product is a 120 megawatt-hour CERENEGY solid state, stackable battery with no moving parts which Altech believes has disruptive potential as a large-scale, grid-level auxiliary.

There are some €169 million (A$269 million) to be collected to take it to production, but Altech Chief Financial Officer Martin Stein says the parts are well in motion.

“We’ve released the DFS, designed the product, designed the plant specifications, permitted the land, and now we’re moving forward with the financing,” he says.

“We’re looking at project equity, green bonds in grants and subsidies that the European Investment Bank is offering, as well as the German federal government and the state of Saxony and looking at offtake.

“We’re speaking with utility providers in Germany that are transitioning from brown coal or ignite to renewable energy, and they need batteries as part of their transition.”

Being weather-dependent in much sunnier locations than Saxony, Stein says that wherever renewable energy is being produced, there will be a need for batteries.

“Whether that be a renewable site or a mine using solar power, they’re going to need batteries to stabilise their grid,” he notes.

“I’ve had calls from dairy farmers, I’ve had an architect come in and say he’s drawn up a residential apartment block allowing space for batteries, asking when we’ll be available.

“The grid needs to be stabilised, their energy needs to go in at nighttime, they are part and parcel with this renewable energy transition.”

Why Germany?

The Russian invasion of Ukraine was a shock to the German energy markets and a stark demonstration of the need to incentivise alternate power sources through a continental crisis.

“Germany realises that they need to secure their energy requirements and this energy project uses sodium chloride, common table salt,” Stein explains

“There’s a lot of positives to go into that region, Saxony has a of renewable projects on the go and is very supportive.

“Tesla recently constructed a gigawatt factory here, it really is a hub of the electrification transition.”

Those 14ha won’t devoted solely to Altech operations, and Stein doesn’t have to squint to see the Schwarze Pumpe Industrial Park becoming something greater.

“The area is earmarked for these sorts of technologies, we are a first mover, but we think there will be more to come, Saxony is really promoting it as an electrification and renewable energy centre,” he notes.

“The German government recognises it as something to be supported economically through the green energy transition, and one they’ve highlighted as being one of their major hubs.”

Lithium-less lustre

A salt-based nature makes Altech’s battery more competitive the higher the price of lithium comes, but Stein does not sound concerned at a lower price coming off all-time shattering highs.

“You have to look at the supply chain of things as well, lithium-ion producers are subject to the lithium supply chain, but also copper, cobalt, graphite, and manganese,” he shrugs.

“Ninety per cent of the world’s graphite comes from China, seventy per cent of cobalt from the Democratic Republic of Congo and that industry is reliant upon those sorts of regions to provide raw materials, which is a pricing risk, but also a supply chain risk.

“We use a component that’s readily available everywhere, it takes a lot of the pricing and supply chain risk out of that product.”

And while there is still a long road to production, competing battery technologies, and calls for market reform to better incentivise battery storage, the prize is undeniably great.

“It’s a lucrative niche, and it’s really a massive part of the energy transition and where the industry’s going,” Stein remarks.

“California was just a beginning, and until the sun starts shining at night, we’re going to need batteries.”

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