Constant dollars

BlackRock to invest over $700 million in Australian battery storage

Wind turbines in Australia. Earlier this year, a report by Australia’s Clean Energy Council said renewables were responsible for 32.5% of the country’s electricity generation in 2021.

Josh Hawkley | time | Getty Images

A fund led by BlackRock Real Assets is set to acquire Akaysha Energy, an Australian company that develops battery storage and renewable energy projects.

In an announcement on Tuesday, BlackRock said it intended to commit more than A$1 billion (about $700 million) of capital “to support the construction” of more than one gigawatt of battery storage assets.

Looking ahead, BlackRock said Akaysha plans to develop energy storage projects in a range of Asia-Pacific markets, including Japan and Taiwan, in the near term.

Large-scale, efficient storage systems are set to become increasingly important as renewable energy capacity increases. Indeed, although energy sources such as the sun and the wind are renewable, they are not constant.

The International Energy Agency has said that a “rapid increase in energy storage is essential to meet the needs for flexibility in a decarbonized electricity system”. According to the IEA, investment in battery storage increased by almost 40% in 2020, reaching $5.5 billion.

Australian government figures show that fossil fuels accounted for 76% of total electricity generation in 2020, with coal’s share reaching 54%, gas 20% and oil 2%. The share of renewable energies is 24%.

In April, Australia’s Department of Industry, Science, Energy and Resources said renewables were responsible for around 77,716 gigawatt hours of electricity generation in the 2021 calendar year. equivalent to 29% of total electricity production.

In a speech last month, the country’s prime minister, Anthony Albanese, said “the challenge of climate change is also an opportunity we must seize to become, indeed, a renewable energy superpower.”

In a statement on Tuesday, Charlie Reid, who is co-head of climate infrastructure for APAC at BlackRock, said that as Australia’s renewable energy infrastructure continues to “mature”, investment will be needed in battery storage assets.

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This was, he said, necessary “to ensure the resilience and reliability of the network, particularly with the continued earlier than planned withdrawal of coal-fired power plants”.

“For our customers, we see tremendous long-term growth potential in the development of advanced battery storage assets in Australia and other Asia-Pacific markets and we look forward to working with Akaysha to ensure a orderly transition to a cleaner, more secure energy future,” Reid added.

As the world’s major economies develop plans to increase their renewable energy capacity, interest in battery storage is expected to grow.

In July, Norwegian company Equinor announced it would acquire US battery storage developer East Point Energy after signing an agreement to take a 100% stake in the company.

Equinor, a major oil and gas producer, said Charlottesville-headquartered East Point Energy has a 4.1 gigawatt pipeline of “early to mid-stage battery storage projects focused on the east coast of the United States”.

The company said battery storage would “play an important role in the energy transition as the world increases its share of intermittent renewable energy.”

“Battery storage is key to enabling greater penetration of renewables, can help stabilize electricity markets and improve security of supply,” he added.