Tesla Emphasizes Australia's Abundance of Lithium

Tesla Emphasizes Australia's Abundance of Lithium

by Gill D on May 05, 2021

Tesla’s Director of Energy, Mark Twidell was visiting down under for the SouthStart Conference in Adelaide. The energy director had to step in at the last minute for his collegue, Tesla Chairman, Robyn Denholm to replace her as speaker as she had fallen ill and couldn’t make the trip.

Twidell said the economics of renewable energy was now driving its take-up on top of the environmental benefits and Australia is in a prime position to make big gains from being a large supplier of lithium to a global industry estimated at a value of $400 billion by 2030 as the use of lithium ion batteries accelerates.

He said Australia had substantial lithium supplies in the ground and the country was in a great position to draw on the massive economic benefits as the transition to renewable energy speeds up.

“Australia has the raw materials in abundance like no other nation on Earth, and demand from the electric vehicle industry and the energy industry as the usage of large storage batteries rose sharply is increasing.” He further added that about 40 big storage batteries on an industrial scale were in the planning stage around Australia. This presents Australia with a huge opportunity to export “climate solutions”.

“Let’s actually increase the benefits to Australia,” he said. The lithium ion battery value chain is forecast to be $400 billion by 2030. “It’s the economics at the end of the day which transitions us to where we are going. The environmental benefits make sense, but economics will see us through,” he said.

Mr Twidell headed the team which built the Tesla big battery at Hornsdale near Jamestown in 2017 and it is famously known for being built in under 100 days. Tesla’s Technoking had pledged that it could built within 100 days otherwise it would be free. That must have put quite a bit of pressure to get his team to achieve the deadline.

When it was built, it was at that time, the world’s biggest storage battery and it was constructed in a partnership with French group, Neoen. Hornsdale is currently owned and operated by Neoen, with the state government having the right to call on the stored power when needed.

The Hornsdale Power Reserve is a 150MW/194MWh grid-connected energy storage system co-located with the Hornsdale Wind Farm in South Australia. The original installation in 2017 operated at 129 MWh and 100 MW and then last year, it was expanded to 194 MWh at 150 MW.

Hornsdale lost its title of the world’s biggest storage battery in August 2020 when the Gateway Energy Storage was built in California. There are however plans to build yet a bigger battery in Victoria, Australia later this year.

Mr Twidell continued saying the transition to renewables was speeding up and it was largely pointless to try to argue otherwise. “It’s a huge economic opportunity. It’s silly to fight to say the transition isn’t happening. It’s happening quickly,” he said.

Recently, two of Australia’s lithium miners, Orocobre and Galaxy Resources made an announcement that they were signing a $4 billion merger in April with the enlarged entity set to accelerate growth projects as demand rises. This merger, between two single asset companies, will create the fifth-biggest lithium in the world by market capitalisation. Orocobre and Galaxy currently produce lithium in Argentina and Western Australia.

Global electric vehicle sales have surged between April 2020 at 100,000 to nearly 600,000 in December 2020. And 87% of those sales were in Europe and China. It is predicted that electric vehicles will be at least 20% of global vehicle sales in 2025. In 2020, EV sales only accounted for 4%.

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