South Australia’s Hornsdale Power Reserve, the world’s largest lithium-ion battery, will have its storage and output expanded by 50 percent to help improve stability of the state’s power grid, French power producer Neoen SA said on Tuesday.
The 71 million Australian dollars ($48m) project will enlarge the 100-megawatt battery, which is owned and operated by Neoen, and was built two years ago in conjunction with United States-based Tesla Inc.
The move comes as energy storage becomes increasingly essential to managing power supplies in Australia. Coal-fired plants are being shut down and alternatives are needed to back up intermittent solar and wind power.
The Hornsdale project stemmed from a promise by Tesla’s chief executive Elon Musk to help keep the lights on in South Australia following a string of blackouts by building a battery within 100 days or giving it to the state for free.
South Australian Energy and Mining Minister Dan van Holst Pellekaan said the expansion was designed to reduce volatility in the price of electricity and protect the grid from network disturbances.
The project will receive 15 million Australian dollars ($10.2m) from the South Australian government, up to 50 million Australian dollars ($34m) in cheap loans through the Clean Energy Finance Corporation (CEFC) and 8 million Australian dollars ($5.4m) from the Australian Renewable Energy Agency (ARENA).
“Large-scale batteries are playing an important role in providing short term, large-scale energy storage to help firm and balance the grid,” ARENA CEO Darren Miller said in a statement.
The announcement was made as Australia’s minerals agency announced a deal with its United States counterpart on Tuesday to jointly develop a better understanding of both countries’ critical mineral reserves.
Geoscience Australia and the US Geological Survey (USGS) signed the agreement, which did not mention any specific funding, that will also look at better quantifying the global supply potential of critical minerals such as rare earths, Australia’s Resources Minister Matt Canavan said in a statement.
Critical minerals are a suite of elements such as lithium, cobalt and neodymium used in hi-tech applications like renewable energy, electric vehicle batteries and defence.
US and European governments are trying to broaden the supply chain of critical minerals including rare earths, which China dominates. But developers say the governments are too slow to make funds available.
“The US has a need for critical minerals and Australia’s abundant supplies makes us a reliable and secure international supplier of a wide range of those, including rare earth elements,” Canavan said.
The announcement comes as Australia’s Prime Minister Scott Morrison visits the US this week, and builds on an initial agreement signed a year ago. Australian rare earths developer Northern Minerals will be part of the country’s delegation to Washington, it said in a stock exchange filing on Tuesday.
The research agreement will focus on mapping potential critical mineral resources and prioritising using data to understand supply and demand scenarios for developing the critical minerals pipeline, the statement said.
There are expectations that the US may finance some critical mineral projects after President Donald Trump in July authorised US Department of Defense funding to be directed to resources or technology “essential to the national defense” to shore up domestic supplies amid an ongoing trade war with China.
Rare earths are highly prized because of their strong magnetic properties, crucial to industrial magnets used in some types of missiles, but the extraction process is highly complex and expensive to set up.
Australia’s Lynas, the world’s biggest rare earths producer outside of China, signed a preliminary deal in May to build a heavy rare earths processing plant in Texas.
No final decision has been made on that plant and Lynas has also signed an initial deal to build a new rare earths processing plant near its existing facility in Malaysia.
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