Magnis Energy Technologies has put the cost of its proposed battery “gigafactory” in the north Queensland city of Townsville at around $3 billion, but says it should deliver a handsome internal rate of return of around 21 per cent to the consortium investors.
Magnis has been looking at the so-called “gigafactory” for several years now, hoping to produce 15GWh, and now 18GWh of battery cells a year to meet the emerging storage needs for electricity grids in the shift to renewables, and the anticipated switch to electric vehicles.
This week, Magnis said the Imperium3 Townsville (“iM3TSV”) consortium has completed a final feasibility study that puts the estimated construction costs at just over $3 billion, spread across three stages that would see initial production beginning towards the end of 2022, and full production by 2027.
The staged construction would make financing more manageable ($1.2 billion for the first stage), and allow subsequent stages to be committed as the market evolves. A $38 million pilot plant could be built next year, with construction on the main facility also beginning in 2020. It would create more than 1,150 jobs when operating at full capacity.
The term “Gigafactories” was made popular by Tesla, which has built the biggest electric vehicle and battery production line in Nevada, has another in New York that actually focuses on solar modules and is building another in Shanghai, China. Other car manufacturers are now following suit and Magnis has a 47 per cent interest in a small gigafactory in New York state that should begin production next year.
Australia has several new battery storage manufacturing and assembly plants, courtesy of the South Australia government home battery scheme, but this would be the first large scale battery cell production.
The iM3 consortium has brought on board NAB to advise on funding options for the group, which also includes Boston Energy and Innovation, a company led by former Macquarie Bank senior executive Bill Moss. Magnis has a 33 per cent stake in the project.
Magnis says the consortium has consulted with the local city council on development applications for the site, which will be located on Lansdown Station, about 40km south of the Townsville CBD and part of a planned industrial estate that offers flat terrain.
It has also talked to the James Cook University for research collaboration, the port of Townsville, and Edify Energy for the supply of renewable energy to power the gigafactory.