Australian-listed companies chase the rainbow of the renewable energy market

With treasurer Jim Chalmers announcing $13.7 billion in tax credits for the development of critical minerals projects in Australia, it’s clear the tilt towards clean energy projects is here to stay.

Moreover, while politicians in Australia stress the importance of unlocking renewable energy projects for their constituents, the growing popularity of solar panels and electric vehicles (EVs) among the general public indicates that we too are beginning to lean into these changes as well. (While in the background, climate scientists stress that the embrace of such initiatives is critical.)

But how does this push play out on the landscape of the Australian Stock Exchange? Who are some of the Australian companies pursuing renewable energy projects, and how successful might they be?

Creating new solutions for battery technology is the focus for two ASX-listing companies in the renewable energy space, Vulcan Energy Resources Ltd and Altech Batteries Ltd, who despite their listing in Australia, have an operational base in Germany.

Vulcan’s unique attraction is how its flagship Zero Carbon Lithium Project combines the extraction of lithium – for use in batteries – from hot natural brines with the extraction of geothermal energy for heating.

Executive chair Francis Wedin said that while the production of geothermal energy and the use of heat to extract lithium were – in individual terms – fairly common activities for energy companies around the world, Vulcan’s combination of the two was both unique and able to set the company up for lower production costs and a smaller carbon footprint.

Vulcan holds 16 licenses across 1,790 square kilometres of territory comprising the Upper Rhine Valley Brine Field (URVBF): this is Europe’s largest lithium resource, with 27.7 million tonnes of contained LCE (lithium carbonate equivalent) held within 10 of the 16 licenses.

The hot brines provide a source of geothermal energy which the company is already producing commercially to local businesses and families, meaning that – according to Dr Wedin – Vulcan is currently ‘one of the few pure play renewable energy producers’ on the ASX.

“We run an ORC (organic ranking cycle) plant to produce power from the hot brine that comes up from the surface,” he said.

But lithium extraction was also achieved through the heat of the brines, albeit whatever was left over after the geothermal energy had been removed. Vulcan could sidestep the use of gas to heat brines for lithium extraction, which was the usual process for other lithium producing companies.

“Our brine comes up at about 165 degrees centigrade, and we take just under 100 kelvin off that in geothermal energy for heating and power,” Dr Wedin said.

“Then you have this lower grade heat of about 60 or 70 degrees which typically you can’t do much with and would otherwise be reinjected back into the reservoir, but it’s the perfect temperature to run lithium extraction.

“It’s just using the embodied waste heat within the brine, and that gives us a really low cost of production: so, it means that we are cost competitive, but at the same time our carbon footprint basically goes to zero.”

Last month, Vulcan kicked off production from its Lithium Extraction Optimisation Plant (LEOP) in Landau, becoming the first company to produce lithium from a local source in Europe, with early results suggesting that grades of over 95 percent could be extracted, with a consistent grade rate of 90 percent.

Meanwhile, another ASX-listed company with intended operations in Germany – Altech Batteries Ltd – has moved into the financing stage for its CERENERGY battery project, having completed a successful definitive feasibility study (DFS) in March.

Altech plans to build a 120-megawatt hour (MWh) facility in Saxony to produce sodium chloride solid state (SCSS) batteries – carrying the brand name CERENERGY – which are set to have a life span of 15 years.

Chief financial officer Martin Stein said the DFS has indicated a financial framework for the project, which will involve production and commercialisation of the CERENERGY project through Altech’s joint venture with German battery institute Fraunhofer IKTS.

“With a conservative investment estimate of €156 million, our DFS not only demonstrates an excellent net present value of €169 million but also generates a significant net cash flow of €48 million annually from operations,” he said.

When Altech formed the joint venture with Fraunhofer two years ago, it sought to build on the latter’s research and development into batteries which – over an eight-year period – yielded the CERENERGY® technology, producing cells that were three times larger and specifically tailored for grid storage applications.

“Fraunhofer saw a viable pathway forward for the CERENERGY® project as the world turns towards renewable energy and the requirement to store this energy in Battery Energy Storage Systems,” Mr Stein said.

“Altech and the joint venture have designed the full-scale specifications for the sellable product, the 1MWH GridPack, have designed the plant layout, selected all of the robotic, engineering and manufacturing suppliers in Germany, have progressed permitting of the plant, furthered negotiations on offtake with German utility providers as well as progressed with financing of the plant construction.”

With the latter developments all being achieved within eighteen months of the joint venture signing, Altech is evidently moving the CERENERGY® project along quickly. But the attributes of the batteries themselves were what made it stand out among competitors.

“Unlike lithium-ion batteries, the CERENERGY® battery uses sodium-chloride (common table salt) technology and is fire and explosion proof, has a large operating temperature range and a longer operating life of 15 years,” Mr Stein said.

“The battery also does not use any of the critical minerals found in lithium-ion batteries such as lithium, copper, cobalt, manganese and graphite.”

With the market for grid batteries growing at a 28 percent compound annual growth rate, Mr Stein added that Altech was seeking to get its battery to market as soon as possible. For that reason, the company had decided to boost funding by extending a share purchase plan – worth $5 million – which it launched last month, with May 22 the closing date.

In another corner of the market – specifically solar energy – Frontier Energy Ltd’s Waroona Renewable Energy Project in Western Australia is also providing key indications of innovation.

“The Waroona Project is a solar energy project with an integrated battery energy storage system,” said Frontier CEO Adam Kiley.

“By integrating a battery storage solution with our solar energy production, we ensure our battery is always fully charged to deliver into the market when it is most required (ie: when demand and prices are at the highest levels). We also ensure that all of the energy that comes from our battery is 100% renewable energy solution, which cannot be guaranteed from other big battery solutions that draw energy from the grid.”

Another upside to the Waroona project – according to Mr Kiley – were cost reductions as it moved closer to production.

“We are seeing a reduction in costs of key components such as solar panels and battery equipment through our tender process, compared to our DFS – even though the DFS and the tender processes occurred only a few months apart,” he said.

Frontier announced recently that it had shortlisted preferred banks as funding partners for the Project and is on track to receive binding credit approved terms in July that will allow for as Final Investment Decision shortly thereafter. The Project is on track to deliver first energy onto the Western Australian grid by 2026.

In another corner of the clean energy market, BPH Energy Managing Director and Executive Chairman David Breeze said his company’s decision to dive into the hydrogen space through its 15.6 percent investment in US company Clean Hydrogen Technologies was driven by the rising global demand for this fuel in particular, as a clean replacement for diesel fuel used by trucks and ships.

“Hydrogen demand in the United States is projected to reach up to 73 million metric tons by 2050 largely driven by its use as transportation fuel,” he said.

As a strategic investment for BPH, Mr Breeze said he was excited by Clean Hydrogen’s ability to produce hydrogen with no CO2 emissions and a ‘cracking efficiency’ above 90 percent, with the latter referring to the percentage of hydrocarbons broken into solida carbon and hydrogen per hour.

“This high level of cracking efficiency has been consistently achieved by Clean Hydrogen,” he said.

“What is new, is Clean Hydrogen’s success in the efficiency of cracking the methane into Turquoise Hydrogen with non-CO2 emissions and the quality of the carbon black produced, being majority Carbon Nano-Tubes (CNTs), which are highly conductive and can be used in battery manufacturing and other high value products.”

Mr Breeze added that another vital aspect of Clean Hydrogen’s technology was the minimal change required to existing infrastructure and supply chains.

“The Clean Hydrogen solution is being built with flexibility to work downstream at heavy transport fuelling hubs currently in use in the USA, mid-stream at steel plants replacing coking coal and upstream where the natural gas is processed into hydrogen, a much higher energy source which can be piped for all uses, including the production of electricity,” he said.

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