AVL (ASX) Forecasts and ‘parties’

Originally posted by sabine ↑

FULL AFR STORY as only part downloaded previously

https://www.afr /politics/federal/labor-s-24b-green-energy-superpower-bet-20240510-p5jclq

Labor’s $24b green energy superpower bet

Ben PotterSenior writer
May 14, 2024 – 7.32pm

The Albanese government has made a $24 billion bet on turning Australia into a renewable energy superpower, powered by green hydrogen, critical minerals processing and green commodity exports over the coming decade.

Taxpayers will fund $13.7 billion in production tax credits for green hydrogen and critical minerals, answering miners’ and clean energy players’ prayers for a riposte to huge US and European subsidy programs.

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Graham Arvidson, chief executive of Australian Vanadium, a potential winner from the budget on two fronts.
He is pictured at the company’s Perth electrolyte facility on May 9, 2024. Trevor Collens

The measure provides a production incentive valued at 10 per cent of processing and refining costs for the 31 critical minerals mined in Australia along with a credit of $2 a kilogram for clean hydrogen.

Wesfarmers chief executive Rob Scott said $7 billion in production tax credits for critical minerals processing was “smart, targeted use of the tax system to solve big problems, leverage our competitive advantages and enhance Australia’s prosperity”.

Mr Scott, whose WA-headquartered industrial conglomerate is set to benefit from the subsidies through its lithium venture, said the incentives would encourage investment, support job creation and productivity.

Although he welcomed the funding designed to “enable” the energy transition, and measures to fast-track environmental approvals, Mr Scott pushed for more funding for carbon capture and storage.

Others in line to benefit in lithium include billionaire Chris Ellison’s Mineral Resources, Pilbara Minerals, Wesfarmers, IGO Limited and the Gina Rinehart-backed Liontown Resources.

A treasury document released with the budget sets out the framework for the Future Made in Australia Act for the first time; it justifies the spending by citing Australia’s twin global advantages in cheap wind and solar power plus some of the world’s largest reserves of critical minerals such as lithium, cobalt and rare earths.

But Treasurer Jim Chalmers has also added to widely criticised measures to subsidise domestic manufacturing with $523 million for a “battery breakthrough” initiative to go with the previously announced $1 billion “solar sunshot” program for solar panel makers.
This funding comes despite the treasury paper that says Australia should exploit cheap technologies developed offshore, including China’s “significant scale and expertise” in making solar panels to reduce the cost of green energy.
The budget also includes $1.7 billion for innovation targeting green metals, $1.2 billion for a strategic critical minerals funding and $1.3 billion for the existing “hydrogen headstart” program.

The additional $8 billion in funding for green hydrogen is a win for wealthy companies such as billionaire Andrew Forrest’s Fortescue Metals and Woodside, which have prioritised US green hydrogen projects because more funding is available.

Resources Minister Madeleine King said the critical minerals production credit would begin in 2027. Lithium, graphite, rare earths, nickel, vanadium and existing operations of China’s Tianqi, Albemarle of the US, Wesfarmers and Lynas are expected to yield early gains.
Support for BHP’s Nickel West plant is under discussion but not in the budget.
Snowy Hydro will also receive a $4.5 billion loan and $2.6 billion in equity for blowouts on its over budget Snowy 2.0 pumped hydro project.

In a nod to the slowdown in major project approvals, the budget provides $134 million to improve environmental decision-making, and a National Renewable Energy Supply Chain Action Plan.
There is also $449 million for advanced satellites to monitor climate, agriculture and natural disasters, and funding for skills for the energy transition, further reform of the Australian Carbon Credit Units system and net zero in agriculture and land management.
Only $5 billion of the $24.3 billion spending on green energy superpower initiatives occurs in the four-year budget estimates period, with the remainder occurring over the “medium term”, typically a decade. The emphasis on tax credits is designed to blunt criticism the government is “picking winners”.

Miners of critical minerals aspiring to also make electrolytes and batteries emerge with two fresh sources of funding. Graham Arvidson, chief executive of Australian Vanadium, was looking for both production credits and manufacturing grants to help expand the company’s vanadium mining and processing operations and extend them to the production of electrolyte for batteries.

Australian Vanadium’s deposit south of Meekatharra could support the production of a gigawatt hour of oxides, roughly 30 times current production at Geraldton, Mr Arvidson told The Australian Financial Review ahead of the budget.

He said a production tax credit similar to the one under the US Inflation Reduction Act would be vital for such a big project because it would “allow us to be globally competitive”.
“Because we’re doing downstream processing, we really are aligned with that model, which encourages on shoring of downstream processing.”

The company’s ambitions also extend to the assembly and manufacture of vanadium-flow batteries. Mr Arvidson says this is a more straightforward process in which Australian Vanadium can be globally competitive with the right government support compared to making lithium-ion batteries.

Australian Vanadium’s operations fall into three main parts – vanadium mining near Meekatharra, processing into vanadium oxides in Geraldton and final assembly of mostly imported batteries in Wangara, an industrial suburb north of Perth, where the company also hopes to make electrolyte and, ultimately, batteries.

The company has already drawn down $10 million of a $49 million grant under the 2020 Modern Manufacturing Initiative for the Geraldton vanadium processing facility, and hopes to unlock more of that funding.

Mr Arvidson is also hoping for support under the government’s Future Made in Australia program to support vanadium flow battery manufacturing.
Mr Arvidson said this was a better fit for Australian skills than lithium-ion manufacturing, which is dominated by advanced plants in China, but grant funding would be needed to give it a “kickstart”.
“I don’t see any other battery technology that ticks that box. You can actually see a competitive manufacturing base here,” he said.
“I’m a firm believer that flow batteries will get manufactured here – at a minimum they will be assembled here because it really does make a lot of sense. The key for us is to get it done fast enough because even between now and 2030 there’s a big role to play for vanadium flow batteries.”

Expand

The $2 per kg of hydrogen tax incentive will hopefully help the likes of BP build a hydrogen plant on the solar/wind farm to be built north of Mullewa. One kg of H = approx 4 litres of diesel, with diesel at $2 per litre could make H viable at $8 per kg. Hydrogen powered haulage to the refinery at Tenindewa would be a good result.
From memory the $49m grant included the refinery be designed to be capable of using hydrogen. Also possible future development at the refinery would be further processing of the FeTi, test work increased the Fe to 66%, green hydrogen could be used here.

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