Grid scale sodium batteries are on their way

You're listening to Energy Insiders, a weekly update on clean energy and climate policy with Renew Economy's Editor-in-Chief, Jarls Parkinson, leading energy analysts, David Leach. Energy Insiders is brought to you by Jaina Selectric, enabling freight operators in Australia and overseas to electrify heavy-haulage. Energy Insiders is also brought to you by Highline, helping solar installers and retailers design high-resolution solar proposals in minutes. Hello and welcome to this latest edition of the Energy Insiders podcast. My name is Jarls Parkinson on the founder and Editor-in-Chief of Renew Economy and of its sister site, the EV focused the driven and joining me as usual is ITK principal, David Leach. David, I trust you a world and fully recovered from a tick bite. Yes, I've seen Mark once before, Jarls, I had to nod along when I saw an English person, an interview in England, following a sojourn in Australia where she was complaining that every insect in Australia was deadly and as far as I think that seems to be the common experience. But we shouldn't waste talking time about talking about ticks, should we, or we should fully recover, David? That's all our audience cares about. I think some people probably wish I wasn't, but anyway, haven't we got a great guest this week? I couldn't actually attend. No, because of said insect. Yes, so I had the opportunity to speak to Peter Fart. He's the CEO of Valo and Valo is the newly formed joint venture between the Finnish company Voxilla and the German company RCT. It holds the battery storage and battery management operations. And the significance of that is that Voxilla has the contract. It is currently building the erarring battery for Origin Energy and that's the one that sort of competes with others to be the biggest in the country and recently landed a contract with the tea bar battery. 1600 megawatt has built by Atmos Renewables. And Peter had some interesting things to say about the future of the technology where we're heading on costs and chemistry. Let's have a listen. Peter Fart, thank you very much for joining the Energy and Silas podcast all the way from Germany. Thank you so much. It's a pleasure to talk to you today. So you're the CEO of Valo. I presume you pronounce it, or Valo. Valo is a Finnish name for a lot of, so we're giving you light to people. Oh, is that right? We're enlightening everybody. Well, exactly. So this is a uniform joint venture between Voxilla, the Finnish Energy Group and the RCT. Germany, well, you just got, because you come from RCT, I think. Yes, and I'm the founder of the RCT Group. So we have RCT Solutions, RCT Green Hydrogen, RCT Space, Soviet Group of Company, which I founded 2012. And then we joined forces and always, right, it was a Finnish company of Valo. Okay, that's right. Yes. And what's similar, of course, grew out of a Greensmith energy. And I actually remember being in Germany more than a decade ago, and meeting one of the founders from Greensmith energy. And I was just going through, back through my files, actually, and I got this press release from Greensmith energy announcing that they had now had more than nine megawatt hours of battery storage contracts around the world. Oh, that's great. No, nine megawatt hours. But some households in Australia have got nine megawatt hours, well, almost. But of course, Valo as, is it, what, is it 20,000 megawatt hours in Australia? We can see Candy about 7.9, 7,900 megawatt hours. We have deployed in Australia. So, okay. Yeah. And this week of course, you landed a contract on the last week, I think, with the T-bar battery, which is 400 megawatts and 1,600 megawatt hours. I think that's an atmosphere renewables project. And of course, you're building what is arguably, what is competing to be the biggest battery in Australia. That's the arriving battery at the moment, which I think is 3,100 something megawatt hours. Yep. So, that must be nearly complete. So we have that big project, Irring, which is one of the largest batteries in the Southern Hemisphere, what I know, which is a 700 megawatt power and 3.16 gigawatt hours of energy storage. And that's co-located at a cold power plant and an old pass cold power plant. So we are using the grid connection of that old cold power plant. And of course, that's a beautiful example of the transformation which is happening globally. And this is, I like so much, this district. And then, and then, yeah, because we have also the blind creek bass, which is also another pioneering work, which is a 243 megawatt and 486 megawatt hour combined DC-DC coupled solar, blast battery directed DC-DC coupled with Octopus Australia, another pioneering work. Okay. And where is that in terms of progress in term? It's in construction. It's in the runbub. So it's on the way. It's done. Okay, right. Yeah. And just on the raring, actually, origin energy have announced, well, they've, I think they've filed planning a request to actually more than double the size of the Irring battery to 8,000 megawatt hours. But I guess it's probably too early in the piece to know that whether you've actually got the contract for that expansion or perhaps you have. You're talking, you're connected. Okay. You're connected. Yeah. It's interesting with the origin battery because it started off, I think, as like a two-hour battery, and then a group by stages. And I think the third stage had significant amounts of storage on it. What does that tell us about sort of battery cost? I presume that they've been going on in this project has been in development for several years. So I guess over in that time, battery storage costs the actual hardware. It's probably come down considerably. Can you sort of tell us by how much? Yes, I mean, we can say in the last couple of four, five years, the energy storage cost went down by, I would say depends from where I looking about 40% down in the last five years. Wow. And that is associated to scaling of course. We are using now this LFP, lithium ion phosphate battery technology, which is a bit lower cost because at the beginning we use lithium-legal-mongan cobalt NMC, which was more expensive. And then secondly, it's about some gale. We are getting big energy storage is a growing sector, booming sector. So capacities went up and by scale, then we could reduce the cost. And that's the battery. So lately, the battery's prices went up a little bit again because of this booming sector. Energy storage is a global, highly required sector. So it went up a little bit again. Yeah. And the efficiency of the batteries, you're getting more into the same space. Right, imagine. I mean, has that evolved for over the last few years? I mean, if you look at 20-foot container, typically in perhaps four, five years before, one to two megawatt hour, we could squeeze into a 20-foot container. Now we can get up more than five to six megawatt hours out of the same container. So because the density of the battery cells is getting higher, we are getting more out of the battery. We can package it more into this 20-foot container. So the density went up heavily. And that presumably helps with the balance of power, balance of plant cost as well, which would be reasonably significant in Australia because of high labor and sort of, you know, the civil construction, you know, got more battery in 120-foot container. You need less concrete for the whole thing. That's a great idea, right? Yes, less cable. A lot of cost saving you have. Because some costs is running per piece per square meter per connected power. And only have less pieces than you save money. Okay. That's interesting. The joint venture that was created from the VALO, so it's now 50 percent joint venture from Wattzilla and RCT. Wattzilla were interesting, because they said that they were interested in hanging onto the business under their own thing, because they've got other things to do. And they suggested that the orders had dried up and some of the margins were problematic. What can you say about those? I mean, it's now under new management. So, is it a bit of a struggle out there in the industry? I mean, are they concerns a fair assessment of the state of the industry? What's your, I mean, I mean, if you look at the, we are in the top 10, according to Wood McKinsey, we are in the top 10 of Battery Integrator in the world. And if you look carefully, we have Chinese competitors and very few Western competitors. And all those competitors are in a certain step vertically integrated. So they're controlling at least parts of the value. chain. And that's one matter of concern. So if you want to be in this leading position, you should be not everywhere but vertically integrated. And that's something which Watzila was looking at. And since RCTs are my RCT companies, we are very well known to set up factories to know the supply chain. We're able to set up battery factories, solar factories, inverter factories. And that was something which Watzila said, we should have joined forces with a partner, western partner, western partner, who is able to develop step-by-step vertically integration. And that was our call. And on the other side, of course, if you know manufacturing, you know the cost. So then you are competent, hard not to talk to the supply chain because you can say to your supply chain partners in Asia, hey guys, your cost is a let us say 100 something and don't ask for 120. So you can you are competent partner to negotiate contracts and supply chain. Okay. So you're expecting to achieve better deals on terms of cost of supplies. Yes, first of all, we can manage the supply chain better because we know manufacturing costs, we know manufacturing. You know we are speaking the same language as our supply chain partners. It's easier for us. And then second, of course, if now regulations are coming globally, you know, energy systems are getting a very sensitive geopolitical topic. And then when you need, let us say in Europe now, we have regulations coming where the inverter and the PMS and all these key parts which are which have intelligency inside should be governed by the region. Then of course, we together with this value, we can set up manufacturing capacity if needed. Together with partners, not always we have to do ourself. And that's something which gives us strength for our company that we are Western players. We can respect local regulations. If it's needed, we can with partners, we can set up capacity to fulfill the requirement. And that puts us off frozen a good position as compared to Asian competitors because, as you know, there are some sensitivities globally to let big batteries, big energy systems be governed by Asian competitors. And then when we are there as well, we are Western company, we have a very good software, EMS, we have a BMS, we have partners for PCS for the inverters. Then of course, we can join force with also the Asian big players and say, hey guys, let us make the integration, Western integration, and let us satisfy their local regulations and the sensitivities of our clients were owning energy systems. And that's our winning part. And so where are most of the, what sort of batteries made in? Where are most of the, the, the, the value of batteries made, sorry. So of course, we have a manufacturing partners in China. We have a manufacturing partners in Malaysia. We have now made an announcement that we are planning to set up a factory in USA that will be out of our shareholders set up, RCT value, shareholders set up. And then we are working on an inverter partnership in Europe as well. So we have a scattered production chain. Okay. And so that US factory that would probably be in response to some of the restrictions that being posed in the US market by the administration there. Yeah. So that's something, because in USA you have to local content requirements, you have non-fuel compliance, you have to show there is a usage of your steel required if so-called Baba regulation there. And the inverter should be done mostly locally and fulfill your requirements. So you need to set up a factory with partners in USA if not your lost. Does that make that term the batteries to be sold in the USA, then much more expensive? How shall I say? How shall I, how shall I say? Of course, I mean the production cost is not because missing scale and also you have difference in labor cost and work for cost China as compared to USA. So that has an impact on the cost. But on the other side of course the government gives tax credits, tax incentives. So that balance out somehow a little bit your cost. But yes, of course the cost is higher in USA as compared to China or Southeast Asia. That's true. Yeah. So just give us a bit of a broad view then how you also seen the battery storage markets. I mean, we're just reflecting on this the other week. It was the 10-year anniversary in Australia from the South Australia, big statewide blackouts and that led to the first, you know, the world's first big battery and what's called what we call the Tesla big battery which you probably don't like referring to it as at Hornstale. It's just nine years ago now and just the scale of the industry is just sort of shops up completely. So where do you see it at the moment? Which of the most interesting markets? I mean, there's Australia. I think Australia is probably your biggest market, isn't it? I mean Australia that's our biggest market. And then of course, we have a very strong foundation as a European company in Europe. We are very strong in England in Great Britain and then we are now moving of course into we have projects in Belgium, in Germany, in the Skandex. So those key central European markets, our key attack markets out of our very good work which we have done in England in Great Britain and the so we are now attacking European battery markets. And USA we have been very strong of course and the Taurus gave us some impact on our company but now by stepping into manufacturing then we recover US market share. So I feel if you ask me your question, I mean energy storage that's a key to enable the global transformation without storage we cannot make the global transformation. How we want to integrate electromobility, how we want to do or we have transformation in the industrial sector. We have moving to renewable which are fluctuating. So energy storage, we have data sender guys which needs a huge amount of electricity. All these key growing sectors all need energy storage. So it's a fantastic move and as a person I'm all my life in transformation. I'm solar, I'm in solar, I'm battery energy storage, we have hydrogen activities. So really I'm so happy that as a western company, as a biggest European battery integrator, we can serve the global transformation that excites me a lot apart from business. Yeah. Which was a little bit more about the the side of the transition in Europe because you know we're sort of very much obsessed in Australia here but we kind of look on with interest in Europe. We hear lots of different, you know, I mean I don't know, can you tell us in Europe it they seem to be bipartisan support for the energy transition that used to be bipartisan support of some sort in Australia. That's sort of fading away now. Is it because government governments come and go in Europe? Is it still forging ahead? Are there any other options that people might want, you know, philosophically or ideologically? And then in Europe of course we have, we have different politically constellations, you know, but we can say whatever party we are looking at, relive energy, resilient, resilient supply now, resilience is getting a big meta in Europe. Energy autonomy, it's getting a big topic. And then of course what do we have in Europe? Do we have oil and gas? We have of course a little bit oil and gas, but most it's sun and wind and hydro, what we have in Europe. So look at Germany. I mean we are the most dominating economy in Europe, but the strongest economy in Europe. And our country is running on 58% renewable. Nobody would have thought that an industrial nation like Germany can run on 58% at renewable. If you would have asked me 10 years before, what's there? Impossible how you want to do it. And then of course we have companies like Italy who's moving heavily in renewable, UK with wind and energy storage. So we are taking renewable as our primary energy source because first of all we have no choice. And also it's beautiful because it's resilient. You have scattered energy supply systems. Now we learn from Ukraine how important is not to run only an decentralized energy system, but they have a distributed energy system. And then of course it's more economic because when you generate energy where you are consuming energy, that's also very economically very feasible. So I would say Europe is moving regardless of the party. Some people say resilience is important. Some parties say green energy is important. Some parties say a CO2 neutrality is important, but all of them say let us use renewable energies as a foundation. And now, of course, our political leaders say we should make more in Europe. So, like, inverters should be made in Europe. Software should come off out of Europe. Perhaps battery cells should be made in Europe. We have big car guys, I mean, they're making battery cells by they cannot make energy storage battery cells, like Tesla in USA, why we shouldn't do that. So, and that's something which is popping up. So, and that makes me very happy. And hopefully, my company, we can help this transformation in Europe. Well, that would seemingly present, you know, enormous opportunities for the likes of Valor, because there wouldn't be that many companies like you that can actually sort of, you know, build at scale in Europe. And it's interesting that you, yeah, and it's interesting that you say that the European transition is still, is still moving forward despite, despite what you hear on that, the politics, you know, because, yeah, as you say, coal is not tolerable. It's impossible to build a nuclear panel stage and any type between now and 20 years time. And you guys don't have enough gas to operate that. So, there's no choice. There's no choice for us, but this is good. There's no choice, because now we are really concentrating. And, you know, I mean, UK has been pioneering in energy storage. Germany has been perhaps pioneering and pushing solar a lot. And so now we have this knowledge available in Europe, and now we are rolling it out. And that's really great. An energy storage will cause like mobility, how we want to make mobility in Europe without having batteries scattered all over Europe. Not possibly. Yeah. Is, is ACT into these in mobility at all? No, we have, as Valor, of course, we are supporting grid, grid connection, grid points, but we are not, not, not in mobility now. That's another piece of a cake. Ready? OK. And the raring battery features, grid forming inverters, understand? Yes, which is pretty much the standard thing now that comes with all new battery projects. Yeah, I mean, where are you with sort of grid forming inverters and their ability to sort of provide all the sort of a system strength? There's a big debate in Australia, and the debate seems to be happening in Australia, because we are so far advanced in terms of wind and solar, although you look at individual countries, I guess, in Europe, and they're probably further along. Just the ability to provide all those system services, synchronous condenses, and things like that already had to obtain the big spinning machines. It's a 5 or 6 or 7 year delay in obtaining them as there is with gas generators. I'm too sure what the question was there, but I mean, as you said, as you said, I mean, we have, because now these batteries are getting multifunctional. Now, who have thought about the batteries can give inertia even? Who have thought about it? Now, really, these batteries, with the right inverters, they can have inertia functionality, grid stabilization, frequency stabilization, voltage stabilization, apart from storing energy. So it's getting a very intelligent way of, and it's scattered. So it's not like you have a big gas turbine giving inertia, no, it's scattered. And it serves the grid on all functionalities, which in a traditional way, perhaps generators have been given, turbines have been given, but now our inverters can do all this work, this job. And the beautiful thing is you also can upgrade it. It's because it's mostly, if you have selected the right hardware, you're just putting the new software function on your energy storage system, and then it has new functions. And that's our advantage of our software, while our function is, our software is one of the best software we have. So we can integrate later renewables. We can integrate wind, we can give functionalities inertia, frequency stabilization. Now, we have clients that say, hey guys, can you come and upgrade our battery? Because now the authorities are coming, we have to give inertia, if you have the right hardware, okay, there's upload the new software and make the related functions. And then we can give inertia to the grid. And that's, of course, a great. Because that's very flexible, achievable, can be upgraded. And that's something which we cannot see on the additional energy system and grid system. It's a multi-functional weapon, you can say, to serve the grid. And not only the transformation, also the grid. - So take us and build into the future. What would you sort of see the future of the battery industry looks like? What costs come down? Would it be new to technology development? So are we looking at different chemistries or modifications? I mean, you already mentioned this sort of the transition from NMC, Nickel-Made, Ganesh and Cobalt to lithium ion phosphate. Is there anything else on the horizon, which looks like, yeah, give us a crystal ball. - Homie, I was looking, I'm long in this sector. So of course, and I'm a manufacturing guy. I always look, is it working, is it working, is it working, and you know, this dumb manufacturing guy is always, is it working, is it working? But now, of course, if you look at the future, first of all, we are going to long duration batteries. We have worked on one hour system, two hour system, four hour system. Now we are going to eight hour system and we'll come to long duration perhaps 12 hour system. So really, is that right? - So that is coming. - Yes. - Now let us look on the battery. Because now we have this lithium ion phosphate, we have the chiller cooling the battery, so we have long lifetimes, and a lot of cycles can come. But now we have a new emerging technology, which is called sodium ion technology. And then something, the sodium technology, if you would have asked me three years before, say, we have lithium ion phosphate, okay, okay, okay. It will continue. Now really, I'm very, very positive on sodium, because why? Sodium can have much more cycles. Sodium is less picky on the temperature control, so you can have less than the power, you can put them in cold condition, and the batteries are still working. And then you also can make long duration functionalities with the sodium battery. And there's an inherent element because as you know, China is dominating country, making battery cells, everybody knows. And then of course, China is currently importing 70% of the lithium for the battery industry from outside. So that means China, per se, as a nation, and the big battery manufacturers are not pushing a lot the sodium technology, because they give supply chain resilience to the important sector of battery. And now, and maybe we have very, very connected, the one of the leading Chinese companies on sodium technology. And hopefully soon, we can reconnect again, and you will hear about an announcement of one of the largest sodium batteries of the world integrated by Valor. Hopefully soon we will make this. Hopefully soon we can make this beautiful announcement, because now, in which particular country, there are two major countries which are knocking, one is Australia and one is England. Great Britain. A big sodium battery in Australia. Could be. Well, that sounds very exciting. I'm going to have to, but my list is the man that I pushed you further. So that was the bad. Two potential, the how shall I say, project. And I want to do it, because you know, my company Valor is one of the pioneer, global pioneer in companies, whenever there is a new challenge, you say, okay, let us do it. Let us write that comes from our bad European genes. And I want to be one of the first who is making this sodium batteries available, because it's a different animal. It's different, like a little mind phosphate. In what way, I mean, you've talked about the fact that it can sort of support longer, maybe longer duration, and it's less vulnerable to temperatures. It's obviously got very little virus, as far as I understand. In what other way does it change the nature of the industry? How to, first of all, how to run the battery? Because first of all, from the engineering perspective, you have to revisit the whole battery, the site engineering. You have to do it differently, because they are working different sodium batteries. I'm not like lithium ion phosphate batteries. And then, of course, if you look at certain applications, first of all, it will serve very cold climate condition. It will serve long duration at the end at the better cost structure, as compared to lithium ion phosphate. I feel, in the future, we will have mixed setups. We might have even mixed one side setups. We might have certain for very quick response, agile batteries, we might have lithium, ion phosphate batteries. And then, for the long tail of long duration, we might have then the sodium batteries. Even on the same site, I'm predicting that. Or we have very northern, very cold condition in northern Europe, in Canada, in North USA, where we have winter. And then, the sodium battery shows advantage because they don't lead this heating and then need less than the power. There is much less in cold conditions. So then, that's, I feel, our batteries will be lead some ion mix setups globally, and we will have a lower cost at the end of this mix. configuration. That's what I see. So what you're telling us then is that sodium batteries are pretty close or maybe already price competitive in terms of development. If I would say there's still a little bit a little bit more expensive, but if you calculate over the whole life cycle of a battery, you have less strength by power. You can use it on a model of cyclists. You know, cyclists is a little bit difficult instrument to sell because customers say, okay, if you have the 15,000 cycles, am I still alive? I mean, isn't it? Yeah, because and then you, of course, you have to first make your deployments demonstrate. These cycles are really coming. And then customers are getting the confidence and partners. But we will see, we will see a lot to say sodium and hopefully with value and good Chinese partners for the battery. Well, I look forward to to hearing more about the project, which may be in Australia, but I mean, how big is that going to be? Is it going to be a hundred megawatt hours? Is it going to be gigawatt hour type project? What sort of size? What sort of, I mean, you obviously can't release too much details, but you know, in Australia, we tend to be very good at pilot projects. But I hope that this was this would be, it sounds like it would be substantial. I mean, it depends if you talk generation, I mean, I would say from my one of those, I would prefer, I would prefer, if I cannot sell too much detail, that the project, which is a mixed configuration, that would come. And then in a mixed configuration, I would say at least, and we are talking about eight hours perhaps, then it should be at least 50 megawatt connected power should be for, for sodium. And then the rest can be for lithium. And then we are talking about several hundreds of megawatts of sodium. Okay. What sort of time frame are we thinking about? Yeah. We want to conclude. We want to conclude soon. We have intense discussions. We have partners, pioneering partners who wish to have it. So I would say in the first quarter of next year, hopefully, you will hear a good, a good, beautiful announcement, if not earlier. Well, that's very exciting. We always, you know, always very excited by new technologies and new developments. And as you said, I mean, three years ago, you wouldn't have thought that sodium was going to be a thing that this industry moves so quickly, you know, before, before the horn style battery, no one thought there's going to be more than a mind megawatt battery in Australia. And all of a sudden there's 100 megawatt battery. And now we're talking about a gigawatt hour batteries. And now we're moving technologies. And it seems that we don't know what to expect. I guess it is the way forward. Yes. Yeah. No, it's absolutely fantastic. Okay. And so the duration of batteries, I mean, I mean, already, I mean, just two years ago, you were thought four hours a stretch, that six, eight hours now, you're talking at 12 hours. Let's never stop. I mean, I would say if we need really long duration and seasonal storage, seasonal storage, especially in Europe, as you know, we have any seasonal storage, then I think we have to go into perhaps making green hydrogen, making storing it over the season and run it over fuel sales and generators. So if we really need super long duration in seasonal storage, because you know, we have fluctuations in the availability of renewable sources, which are seasonal. And then for seasonal storage, I would say then we need to make molecules and reconvert molecules into heat and electricity. But for this daily, for this daily fluctuation, then batteries are doing the job. And I'll see, I mean, if you look globally, we are just at the margin, we are just emerging. We are now the starters and our guys, they need the health of electricity. The car mobility guys need the health of electricity. Our industry, our whole electrical sector is converted. I mean, have you ever thought about this? This is the largest transformation I have ever happened on Earth in the next 20-30 years. You had never, ever had such a substantial transformation. And then all this one needs an intelligence energy system, which is agile, which can be upgraded, which can be decentralized, which can become big, which can be small, which can be at grid connecting points. And that's something which is just starting. It's a fantastic, I'm so happy to be with Valor and to support, as a Western company, to support this exciting transformation. It's so beautiful. Just on those data centers then, I mean, they're sort of seen as a support for more renewable projects in Australia. But some people worry that there are going to be so many of them, and they're going to be so energy hungry, it's actually going to end up sort of pounding with too many fossil fuels and things like that. Or what role can battery storage play? Can it just sort of, you know, mitigate that requirement? I mean, how do you see that playing out? Because the data centers seem to be in very much of a big rush to get things done. But maybe that's just hype. But can the renewables in the storage industry keep pace? Yes, I mean, if you look at how it works, now we have data centers. They're using grid connecting points. Then we have next wave is we have data centers which connected photovoltaic solar energy and wind and batteries. Still connected to the grid heavily and depending on the grid, some of them are connected with engines and turbines. Fine. And now I feel the next wave is coming. And that next wave are more or less autonomous data centers, really, which have a mix of renewable of wind, of solar, of battery energy storage, of engines potentially fed by green hydrogen, where you have access energy at some peak of this connected renewable energy sources. You can convert it to hydrogen and you can feed in engines whenever you need it. So I've, and then all this one is run on a micro grid. We call it micro grid or an independent grid. And that's something and some of them will be even not connected to the grid. And then I see that is this trend is coming because it doesn't work elsewhere. And then of course for the data center itself, you know, this this wrecks are running on DC and the batteries are running on DC. So I see also the direct coupling of the batteries for solar is already DC, DC coupled, you know, from our project in Australia. Then the batteries should go into the to the data center and feeding directly DC power to the to the data center racks. And then then you have a lot of cross saving and a lot of synergies. But for sure, the boom and the continuation of data centers will only work when they are not depending on grid supply. They have to run especially special hybrid scalars. They have to run on their own own energy supply. And for example, in our case, our we have our whole chorus, our island is running on our software. We have integrated wind, we have integrated solar, we have integrated engines. And that shows that this type of work on gigawatt scale can be done. So and this will come. It's interesting. So because now we have a lot of hesitation to data center from local communities, our energy price will go up. Perhaps our water price will go up. We don't like to have data center, but if those data center guys are connected with renewable battery, that's some small engines, then it will work. If not, it will not work. Just the final reflection then because we're getting to the end of our time, your technologists, you've been in this industry for several decades. When you look at the sit back and look at the energy transition of where we've come from, where we want to and where we need to get to, where we are now, do you still feel that we're on track? Are you more positive, less positive, equally positive than where you were before? There's lots of color and movement and with inner and polemics about the energy transition, but from the technology point of view and its ability to do what we need it to do, either for economic environment, climate or whatever, requirements. So what do you have? I think they look now where we are. We have worked all together so heavily to make solar energy, the cheapest energy source. We have worked so hard to make wind, the cheapest energy source, one of the cheapest energy source. Now we have developed batteries and intelligence energy system, which can combine with photovoltaics, with solar and wind and hydro as well. Now we have a total tools that are available, which can help our nations, our countries, our regions, our states, decentralized helping the transformation with a reasonable cost because we are the cheapest energy source with a reasonable cost, combined with batteries, having full grid functionalities, being decentralized. And that is now a toolbox which humanity can use. and make this transformation happening at a cost-efficient way. And even the data sender guys are joining forces with us. So I feel all this global transformation has now the toolbox available. All of us in this sector, we have worked 30 years. I have to see a lot of gray hairs. We have worked very heavily to make it happen. Now it's just accepting it, using it to benefit also an economic benefit. It's not like we are depending on big subsidies anymore. Now we are, we are economic. And we have the smart solutions. We have smart solutions available. And that's something which I'm totally confident that now it's the time. It's the next two decades will be a fantastic move from our combined transformation sectors. Renewable, battery energy storage, green molecules. You will see it. People also know, if we look at geopolitics, how much we are hurt it now by those geopolitical issues. It's very sad. It's very sad. So I'm a positive guy. Humanity has now the better toolbox available as we were using in the past. And let us use it in a peaceful way, in a sustainable way, in a green way, and economic way. Well I don't know, that's a lovely way to end the discussion. Thank you very much, Peter, for joining us on the energy inside this podcast. Thanks so much. Invest in a low carbon future through a diversified portfolio of environmentally conscious investments across multiple asset classes, all within the convenience of a single unit. Generate competitive returns while supporting both your portfolio and the planet. If you want to invest in the environment, think of the Envaro Invest Investment Fund. The Envaro Invest Investment Fund is a corporate representative of daylight financial group AFSL 521404. Past performance is no indicator of future performance. Read the information memorandum for more details at envaroinvest.com.au. You are back with the energy inside this podcast with Charles Parkinson and David Leach. So David, look, I'm in the main thing to take out about that was I guess this interesting prediction that he's about to sign a contract on sodium batteries in Australia, sodium ion batteries. Possibly suggesting it might be a hybrid between the two, they have different functions. So we await with interest to do point out that GM in the US through and it's locked with a mod called peak energy and cattle amongst others. I've also talked a lot about sodium batteries. So it doesn't seem like it's very far away. We shall await and see. Peter Farth said not as quick or as responsive as lithium ion, but not that you notice actually in a grid, but possibly more durable, more fire resistant and ultimately lower cost perhaps. Yes, I'm not completely sure that all those are showing up. I think I saw somewhere on LinkedIn that some sodium ion batteries that have been in the contract hadn't done quite as well as the optimists that expected in the contract. But nevertheless, let's not worry about that because we don't need to at the moment, the total installed operating batteries in the name is about nine gigawatts of utility scale. But under commissioning is another 2.2 and under construction is another eight and a half. That's before any announcements that have been made in the last half hour. And so the total of installed utility batteries is going to more than double over from nine gigawatts to 19 and nearly 20 gigawatts of batteries. And you know, 20, 20 gigawatt hours, I think it is must be more. No, that's by state. Sorry, the total gigawatt hours is going to be 57 and a half gigawatt hours. That's enough to run the name for a couple of hours. Yeah, and it was interesting that a EMA Bos Daniel Westman talked about it this week, pointing to the QED, the quarterly energy dynamics report, which for the September quarter, which is going to tell us that batteries are sitting the prices on half the intervals in the September quarter, which is up well three times what it was a year ago and 50% more than what it was a quarter ago. And he also mentions the impact of household batteries. And I actually thought it was really interesting what he's talking about the demand surge that happens 11 o'clock each morning with a solar share of this sort of free solar thing that customers are obviously taking up with great to learn or is to few with a lot of batteries are. It's actually been so what we as mentioned jobs and firstly I want to say that data I was quoting come came from renew map. I didn't count the numbers myself, but the team there does a great job. To add that there's been at least 12 gigawatt hours of residential batteries, but the point is that the amount of batteries being added at the moment as we remark last week is enough to push up prices a little bit in the middle of the day that it hasn't been enough. It seems to prevent all the price spikes that have been floating around the place. There was a funny one this week. Did you work out what actually happened? What company was Monday afternoon or Tuesday afternoon or maybe it was Monday afternoon it sort of sudden boost and demand it might have been cloud cover coming over all the solar panels and the price just let to pretty much the market cap I think 22,000 and something for about five minutes. That's enough to as we've remarked it's not the prices 99% of the time you care about it's the prices in that less than one set of intervals where they're very high that make all the difference to the year long price. And the batteries were supposed to get rid of and I think I gradually getting rid of I didn't completely get to the bottom of what I will notice note and which origin noted I think in its AGM which you paid some attention to is that the arouring power station maintenance has been reduced something like 47% at one stage of New South Wales cold generation was offline for one. One reason or another there's Queensland generation offline there always is some and there was some offline in Victoria as well and the whole thing that we said the increased power in the middle of demand for battery charge in the middle of the day. A lot of the cold generation been offline at the moment people worried about or finally I think accepting accepting that not just your lawn but arouring your lawn certainly is going to close I think now we can say an arouring is it's looking more and more the odds of swinging to just like the odds against Trump when in the Senate for a swinging. Towards arouring closing and that's pushed the futures prices up about $22.22 over 20% in the last to towards $100. Just the most prices that happened earlier this week there was a bit of commentary I think from Moto Energy on LinkedIn who look at these things quite closely and they just noted that there was transmission constraints as well. Added to the cold outages that you talked about which basically took out half the batteries in New South Wales from the market so they weren't able to play. They sort of described as they weren't able to profit but also means if you had twice as much battery capacity play in the market the prices might not have gone so high. Well I do think that the more batteries are right look I think it's the case that the more distributed the network it's why I've always argued for community and household batteries and little isolated grids grid resilience. It's just the more distributed things are the more the law laws of large numbers can come into effect and the lower the probability of you know a tail event like like so much been out that prices do spike. At the same time when you have your lawn and erarring and Gladstone all going to close over 44 months around the 2028 2029 period that's 13% of the supply been taken out of the market in a very short space of time that has to be replaced and at the moment the replacement supply is just not ever. Exactly and you wrote a very good analysis piece on that porting out once again how the gentile is just not interested in wind and solar they're very excited about gas we might get to that quite shortly and the eSIM market is still over the horizon. And Charles I think if people are looking at that note and they probably won't but if you can follow the part about the eSIM that I really only added in after I wrote the note when I was about. The note when I was fact checking the statements I've made and as usual found I've made far too many and claims that I couldn't really justify and when I look to the eSIM it just. It astonished me really just how pervasive it is in in concept I mean every state is going to have a in acceptance lane and possibly Victoria after the election is going to have a renewable target and that renewable target is going to be or an emissions reduction target and a statutory authority a federal one or an email related one is going to convert that into gigawatts of wind and solar and dispatchable power. And then it's going to offer contracts for those gigawatts out to the market that you can bid into so essentially the way to think about it in the first instance is the gentiles are going to be cut out of the picture altogether. Well, that's probably good. good thing. Oh, it is. It is. But, and consumers will end up paying any difference between, you know, any hedge premiums, essentially, that have to be paid, any difference between the realised spot prices and the prices that the wind and the solar farms bid in. There's more wrinkles to it than that, which I don't want to get into. But the really important point here is that this is a very comprehensive plan looking forward that starts at the end of 2027 that essentially says most, if not all, of the new wind and solar will be procured through these ECM contracts and that it will cut out the gentiles. Now, the trouble is, one of the trouble is, if you thought you were going to get a good ECM contract, you can't get it unless, if your project's already hit FID, so there's some incentive to actually wait, which I don't like. Well, that's happened before, hasn't it, sort of, you know, new policies on the way and people waiting to sort of see what it looks like and see if it's a bit of deal than what they're currently being offered. Although, I would have thought if it already is FID, why would they want to wait? I mean, isn't that enough? I don't know. Well, if they didn't, I'd do that and want to wait. But I guess what I was saying is you might think you were going to get a contract and start building on spec on the basis that you would win a contract, but in fact, you can't do that. Okay, well, let's not tell them about it then. Let's just keep it a secret and get a sort of size of contracts and then they can all the other ones can get their ECMs. Ignore what we just said over the last minute and just build that bloody wind and solar phone, particularly you, the Gentiles guy outside of contract, be bold. And so because the Gentiles are kind out of wind and solar, you were going to go on and say, Charles, that they want to get into the dispatchable side of things. Well, they're very excited about gas, aren't they? Energy Australia and the origin energy are both put forward plans recently for what would be the biggest gas, peaking gas plants in Australia, a lintus charging head with one over in Western Australia. I'm sure AGL's got a couple of efforts sleeve and the new South Wales governments come up with this new auction. They've designed a specific option just to get gas across the table because gas has not competed in the, in the previous firming tenders South Australia had a firming tender specifically does not know what Tom Kutts and Turner's filled up the time would attract some gas investment and it just turned out to be all battery. So he's got to go back to the drawing board, but new South Wales have beaten them to it. So look, this is the feeling this reliability gap that's been identified by the own roadmap and also the AEMO issue. I don't really agree with it, Charles. I've got to say, I mean, I don't see the need for a whole lot more gas generation. And I think the fact that it has to be done via a contract shows in fact that there aren't any price signals and never likely to be one. Wind and solar droughts are not the same as rain droughts. There's hardly three days in ten years where you get no wind or solar. I mean, obviously you're going to get some solar pretty much every day. We'll be in real trouble as a nation if we're not getting as a sun doesn't shine ever shine. And anyway, the reason we're able to put these damn things out, if there is a wind and solar drought, because if they're picking plants and running for more than eight hours, one, they're probably going to run out of bloody gas or diesel deliveries they're using. And two is going to be absolutely freaking expensive. So I'm sure there's going to be a bit of solution. We do need some. In my own personal model, and I think when we've got no coal, we need about eight gigawatts of gas. You can draw out half of what they're saying. They're saying fifteen. Yes, well, we've all got our own views about these things. Okay, okay. Look, just on that, on the investment thing, because we have been noting about the wind farms on this podcast and then renew economy for the last couple of weeks and there's been a lot of activity, the clean energy regulator has tottered it all up for the September quarter and come up with a number 2.1 gigawatts reach financial close in this September quarter, which Chris Bowen tells us is a record. I think it's an equal record, actually. So that's not bad. It takes a while. It is Australia wide. That takes another country over there to where Australia isn't there. Well, they've actually probably accounted for at least half of it. But look, I mean, I guess it suggests and a lot of these contracts have been written by government authorities. A couple of smaller ones by AGL, but most of it comes from government entities who had told to do those sort of things. But that's a positive sign, David. It's just things that wind drought is breaking. We do need some of those bigger projects to come to the party, though. Look, it's absolutely critical. As I've said, if you look at these coal generators that have not been maintained anymore, not been maintained in a serious way. I mean, there's obviously fixed breakdowns as they occur, as they can. But the risk of in a year and a half or something, there's not enough new wind and solar. And in winter, you know, two or three units of our arouring breakdown again, or one of the other coal plants, this would be quite a serious situation. And you know, and the nationals and the one nation and the coalition are still clapping on about keeping coal open as much as they can. These guys are a complete joke, Charles. I mean, I've got to say that being government, I mean, you know, when was the last time you heard someone talk about insurance cost? I am willing to bet Charles that your insurance bill last year was bigger than your electricity bill. That's almost certain in the case. In fact, many factors. And if you look at it, it's about three times. For the average household with the owns a house, their insurance bill will be about three times their electricity bill, even if they don't have solar and a battery. And insurance costs have gone up 70%. Now, why don't, you know, we hear about that from the one nation. Why don't we hear about it from the Labor Party? I mean, there's something, you know, this is a serious, serious issue. We'll get onto the broader issue of politics and costs and inflation. And I'll be so far out of my depth, I'll never be able to return to this podcast. So I won't say any more about it. But my point is there are a lot more things than electricity for political parties to get worried about. And including bloody climate change, I mean, the AFR had what was this titled an energy and climate forum. Now, I'm not wanting to criticise the AFR more than about once an hour. But, you know, did they actually discuss the climate, the climate costs, what's happening in the global world of to a thermal energy exports? No. They had a bunch of people come in and talk about small time problems that their own business has. Yeah. I think one person did. There was the Ford SQ executive actually turned up on the second day and just made that point. And of course, Ford SQ are sort of charging towards real zero and doing it because what makes economic sense and two, they actually take the climate concerns quite seriously. And hopefully they can actually lay down a pathway for other people. On that note, I do observe that BHP has sacked what 300 workers up in the Pilbara according to the reports, including Bloomberg, the reasons are partly the rising cost of diesel. So it's kind of ironic that Ford SQ has already replaced 17, 18 of its giant excavators, each of which save one million litres of diesel a year at two dollars a liter of diesel, which is generous. That's $34 million. That would be able to save maybe, employ maybe half that workforce that they're getting rid of or even one of their CEOs. So there you go. You know, Australia has done incredibly well, out of first the coal boom, then the iron ore boom and then the LNG boom. Those mineral exports, broadly considered, have been incredibly important to every Australian's well-being so for many years. And the iron ore producers are still the major income taxpayers by far in Australia. There's a reason why the iron ore price shows up in budget discussions and not the LNG or gas price. And it's because iron or income tax receipts are incredibly important. And for that reason, BHP and Rio should always be taken very seriously because they pay their way in the major thing. But it is also true to say that broadly considered, resources productivity is falling. In general, we've mined most of our best oils, whether it's iron ore or coal or gold. And resources productivity is a major thing. And I don't, I think it will be very difficult to get back. But just sacking people, I wrote this in a note the other day, just sacking people is not broadly going to be the way forward. That might give you a short-term sugar hit. But we have to find new ways to increase our competitiveness by new industries, whether it's Lithium or whatever. And replace diesel imports is the same as getting $40 billion of exports. There's a lot that Australia can do. And even that BHP will have to think seriously about doing. Because as we've said many times, although the wheel turns very slowly, very slowly, if you look hard, you can see the signs that China is turning over, you know, like coal-fired electricity fell last year in both India and China. According to Laurie Milverda, who's been on this podcast, that's the first time since 1973 that they've both fallen in the same year. It's happening. Absolutely. Just a few more things to round up before we go. I'm just a That's a couple of like weeks. infarm interesting news, one is the state approval for what would be the War Ruck in the Bill when project in Victoria by the state government ahead of the state election campaign. That's probably going to be potentially the biggest wind farm in the country. Let's see if that goes ahead of the government changes. In vision energy, the Chinese company, we had them on a webinar this week, it was actually quite interesting what they were talking about, stand alone energy parks, and they talked about a whole bunch of projects. They've got the contract for the Nulligone wind project up in the Fortescue with a self-lifting towers and near-ends, Narrage and project, and we sort of dug up some information that they've actually been the contractor for a major wind and eight hour battery, which has been built at the Mineral Sand's mine, owned by Tronux, which is a US Mineral Sand's company. So that's kind of interesting, and they've got more projects coming. And even more interesting is Cubico, which is a European-based developer. They had two wind projects in Queensland, which were called in more than a year ago by the very excitable planning minister. And they've actually come up with a, and the Elvis, the famous Elvis impersonator. And they've actually come up with a $160 million proposal for community benefits and first nation things. So they are now feeding that back into the system. So it's going to be interesting to see whether he still finds, he's just a fight to stand in this way or not. Hank Williams, how come you find so many faults with me on the same old travel I've always been through? Before we let you say so, I can delight for a way to win the podcast. I think David, thank you very much. Look, thank you to Peter Far from Valo for joining us for a fascinating discussion about the future of battery to chemistries and costs and what have you, and also an insight into the situation in Europe and America. Thanks, of course, to our sponsors, Paillon and Janice Electric. Thank you, David, for making a remarkably quick recovery from your insect encounter. Oh, this is podcast. And thanks to all the listeners out there and we'll be back with another episode of the Energy Insiders podcast this time around about next week, bye for now. Energy Insiders was brought to you by Paillon. Paillon provides easy-to-use solar design software for installers and retailers with pay-as-you-go pricing, no monthly cost and no locking contracts. Australia's top solar companies trust Paillon to design high-resolution, CEC-ready solar proposals. Energy Insiders was also brought to you by Janice Electric by converting existing diesel trucks to electric and supporting them with battery swap infrastructure, Janice is helping freight operators cut emissions, lower fuel and operating costs and extend the life of vehicles.