Australian battery innovator lands federal grant to scope out giga-scale local lithium-sulfur cell factory

The plans of ASX-listed Australian battery hopeful Li-S Energy to build a giga-scale lithium-sulfur cell manufacturing facility on its home turf have been given a fresh shot of federal funding from the Australian Renewable Energy Agency.

The agency said on Tuesday that it has awarded $7.86 million in funding to Li-S Energy to undertake manufacturing optimisation, a feasibility study and front-end engineering design (FEED) for the proposed facility, a location for which is yet to be determined. 

The proposed factory would be built in stages up to a total production capacity of 1 gigawatt-hour (GWh) per year of battery cells – 500 times the capacity of Li-S Energy’s current facility, which is based at the Geelong campus of Deakin University in Victoria.

Li-S Energy has developed a 20-layer battery cell using its third-generation (GEN3) semi-solid state lithium sulfur technology, which has current energy densities of 456 Wh/kg – around 45 per cent more than competing technologies – and is safer and more reliable than lithium-ion batteries.

The lightweight batteries have been hailed as a potential “gamechanger” for the drone industry – one of the company’s early target markets – for their ability to extend range and flight-time. In the longer-term, Li-S Energy has plans to expand into e-aviation and the heavy vehicle industry.

Last year, in August, Arena granted Li-S Energy $1.7 million to add a lithium foil manufacturing division to its 2 megawatt hour (MWh) factory in Victoria, where the company was already creating and coating cathode powders to final cell fabrication and testing.

That same month, Li-S Energy opened its pouch cell production facility in Geelong, having in May demonstrated that its batteries are “stab-proof” via a test that drives a nail through the cell to see if it will explode. 

In an ASX statement on Tuesday, the company says this “proven foundation” positions it to scale confidently, “leveraging operational experience, established supply chains and a skilled local workforce.”

Li-S says that as well as running a rule over the case for staged development of a new giga-scale facility, this round of Arena funding will also go towards fine tuning anode and cathode manufacture, cell stacking and recycling, and bolstering the company’s scientific and engineering teams.

“With out maturing technology and rapidly increasing customer demand, plus a clear commercial business case supported by professional engineering feasibility and FEED studies, we expect to be able to engage with strategic joint venture partners and access low-cost capital from a variety of sources,” the ASX statement says.

“It is expected that binding or conditional off-take agreements will be secured prior to any material financial commitments being entered into for facility construction.”

Li-S Energy CEO and managing director Lee Finniear said the funding is a major step towards large-scale production of its lithium-sulfur batteries.

“In particular, it strengthens domestic supply chains and backs Australian innovation to deliver commercial production, right her in Australia,” Finniear says.

Arena says the latest funding for Li-S, which comes from the agency’s Advancing Renewables Program, reflects its strategic priority to cut costs and increase the diversity of technologies in Australia’s energy storage market.

“By supporting Li-S Energy’s plans to scale up lithium-sulfur battery production, we are helping to fast-track the commercialisation of breakthrough battery technologies,” Arena CEO Darren Miller said on Tuesday.

“Batteries are essential to the clean energy transition, both for energy storage and transport. That’s why it’s critical we keep advancing innovations that improve performance, increase energy density and drive down costs.”

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