The expected surge in sustained demand for critical metals for the electric vehicle revolution may be shorter lived than many are predicting, but repurposing the batteries could transform Australia’s energy grid and economy, according to the national science agency.
CSIRO this week released a report modelling various electric vehicle (EV) uptake scenarios with an advanced tool that accounts for changes in technology and battery recycling to give more sophisticated demand forecasts.
It also used the tool to model the impact of repurposing end-of-life EV batteries for renewable energy storage in the Australian grid, finding they could exceed storage requirements by 2040 with an accelerated uptake.
The scientists say the study has challenged the conventional wisdom of steadily increasing and linked global demand for battery metals cobalt, nickel and lithium, and could call into question the huge investments being made in hydroelectricity in Australia.
CSIRO used a Physical Stocks and Flows Framework (PSFF) for the analysis and is now urging government and industry to engage with the science agency to model specific scenarios to optimise investments in the transition to low carbon economies.
By accounting for the factors, CSIRO found even the current scenario of medium changes in battery technology and moderate EV uptake without battery recycling will see only a short-term opportunity for cobalt production followed by a long period of decline and, ultimately, a glut.
Nickel demand will also be “constrained”, according to the more sophisticated analysis, but lithium still has a long and bright future.
Under the “rapid change” scenario, which assumes faster changes in battery chemistry, quick EV uptake, and high levels of recycling, new cobalt mining demand had a much shorter window and demand dropped below current production levels by 2040, while both lithium and nickel had early demand peaks and trailed off after 2030.
A circular economy scenario forecasted prolonged demand for nickel and cobalt production, with lithium demand rising steadily until 2050.
The findings challenge several previous forecasts from other sources like the International Energy Agency and the World Bank of steady, linked demand growth for the metals. The results are particularly important for Australian industry and policy makers, which rely almost entirely on the international export market and are positioning themselves as a more reliable and responsible option than several of the current market leaders.
“Everyone’s looking at the gap between our current supply and where we need to go and assuming that all of that is newly mined material,” CSIRO’s critical energy metals mission leader Dr Jerad Ford told InnovationAus.
“People are ignoring the complex dynamics around material scrap and recycling and technology change over time that really impacts the availability of materials and when we need to mine and when we don’t.”
Australia is the world’s biggest lithium producer, third biggest cobalt producer, and fifth biggest nickel producer, and holds even higher ranks in terms of reserves, putting the country in a strong position for the surging demand for electric vehicle batteries and prompting some rosy outlooks.
Until now those outlooks have mostly failed to account for the reuse and recycling of batteries, and how that can impact demand in ways which alter constant growth, Dr Ford said.
“If 60 per cent of all the batteries in the world are reused and in other applications again, that changes [mining demand] dramatically. Newly mined cobalt would be needed out to almost 2050,” Dr Ford said.
“So, these variables are exactly why we built the model so that we can test these assumptions.”
CSIRO wants to work with policy makers and metal miners to further test the results in specific scenarios, and develop a more diverse economy to take full advantage of global EV demand.
Dr Ford said Australia has huge potential to become the world’s “recycling centre” importing and reusing batteries, alongside mining the raw materials for new ones.
“We have the raw material resources, but we will also have substantial recycling flows [domestically] and more so if we can bring in cycle batteries from other areas in the APAC region,” he said.
“We think about those [sources] just as another feedstock for our emerging battery and nickel industry. That’s how we should be thinking about it.”
The latest report also models one scenario where EV batteries are repurposed for renewable energy storage, greatly prolonging their life and offering an alternative to hydroelectric expansion in Australia.
EV batteries are typically retired when their charge capacity drops to 80 per cent, a problematic capacity for vehicles but much less so for energy storage. CSIRO used its PSFF to account for the residual capacity of repurposed batteries, finding they could transform the national grid.
“Under one relatively conservative EV uptake scenario, we found that diverting 60 per cent of retiring EV batteries to second life would meet almost 70 per cent of the storage demand required under the Australian Energy Market Operator’s central scenario for (Eastern) Australia’s electricity grid by 2040,” the report said.
“Accelerated EV uptake increases this to over 120 per cent of AEMO’s requirement.”
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