Sanjeev Gupta talks Energy Storage
Businessman Sanjeev Gupta — who British media call the ‘man of steel’ because of his track record of reviving steel and aluminium assets — has cemented his place as a champion of renewables in Australia following recent investments in the energy sector. We spoke to Mr Gupta and discussed:
- The current state of the energy sector,
- The potential of energy storage in his investments,
- His future plans.
Sanjeev Gupta is the Executive Chairman of the GFG Alliance, majority shareholder of SIMEC ZEN Energy, and founder of Liberty House Group.
His GREENSTEEL approach involves recycling steel into high quality products, and using renewable energy to power this process instead of fossil fuels. This approach has been seen through the mining, metal and power generation operations that Mr Gupta has purchased and relaunched in the UK and now Australia.
In the last year, his company acquired Arrium steelworks, invested in upgrading Whyalla Steelworks in South Australia, won a contract to supply at least 80 per cent of the South Australian Government’s energy needs until 2020, and SIMEC Group purchased a majority stake in ZEN Energy. He also announced plans to build the world’s biggest lithium-ion battery in South Australia, and most recently partnered with Neoen to deliver solar power to Victoria’s Laverton Steelworks.
Mr Gupta said that while his initial investments in energy were to support the steel operations, they can also benefit the wider energy industry.
“We believe strongly that Australia should be a major steel producer globally. So that’s sort of the first fundamental point, that we believe it can be done competitively. One of the impediments to that is the energy price,” Mr Gupta said.
“So we’ve gone about trying to address that, similar to what we did in the UK, in the steel sector there as well, we saw an opportunity in steel. But an impediment was the energy so we started to solve that. In the process we not just solved it for ourselves, but actually energy became a bigger and bigger part of the overall group, and Australia’s taking the same journey.”
Transition to renewables
Mr Gupta said he believes in the transition of energy consumption to renewables and is a big supporter of this, but with intermittency a key challenge, having alternative solutions for energy is important.
“There are various ways of doing that, and we’re working on many of those. Like different types of storage actually, if you want to call it that. So pumped hydro is one big part of that initiative, using empty mine pits which we own, and there’s obviously plenty of those in Australia. Using them as reservoirs for energy and running them to generate power during times of high electricity [demand], or no electricity through other means like solar, is one way.
“Then there are other ways, using waste and biomass is another big way, which we’re doing in the UK, which we’ll bring to Australia eventually. In between that, there are batteries, because batteries are not competitive as a storage medium today, but they will be in our view, in the long term. The same way as solar prices and wind prices came down, battery prices will come down as well.”
World’s biggest lithium-ion battery
In early 2018 Mr Gupta announced plans to build the world’s biggest lithium-ion battery in South Australia, a 120MW battery in Port Augusta that will supply power to the Whyalla Steelworks. As this battery will be bigger than Tesla’s 100MW Hornsdale Power Reserve battery, comparisons have been created between Mr Gupta and Tesla’s Elon Musk. Like all of his investments, Mr Gupta said this battery is filling a need and he doesn’t feel any sense of competition between others.
“Our projects are driven by our need, to have competition is not in context. I mean the point is that we need that battery to operate our steelworks. Without that battery we’d have trouble so it’s basically driven by what the system is.
“Our main base is solar, and we have pumped hydro as a big part of it. So in between that mix we definitely need a fast response system, and the 120MW as an exact calculation based on the need of that project. [It] happened to be bigger than the other one, but it wasn’t by design meant to be bigger.”
State of the energy sector
In comparison to the rest of the world, Mr Gupta said there is a disconnect in Australia between energy prices and resources, but with any industry problem, there are also new opportunities.
“I mean first of all it’s obviously shocking, and it is a real, crying shame that Australia, despite being probably the best resource rich country in every type of power — whether it’s renewable or traditional — is now one of the highest priced energy markets in the world. So there is a massive disconnect, which needs to be fixed.
“The fact that there is such a big problem, it also has a flip side, it’s also a very big opportunity. The bigger the problem, the bigger the opportunity. So this means that the transition will perhaps happen faster here than it would have ordinarily. Which in the long term maybe is a good thing, although it’s had short-term consequences.”
When looking to the future of energy in Australia, Mr Gupta strongly believes storage technologies will have a major impact.
“It’s a revolution and it will change everything. As storage becomes competitive — solar is already competitive — the moment you can marry that with competitive storage, it’s a game changer.
“You can have distributed networks, you can have energy being consumed in a very different way to how it is traditionally. It’s what mobile phones did for telephony. It will be a huge revolution in terms of how energy is consumed globally, especially in countries like Australia where solar radiation is at the maximum compared to anywhere else in the world.
“That combination will really support a different type of energy consumption, and a different price of energy consumption.
“So I think it’s something to embrace, it is expensive, but it’s going to get cheaper and cheaper. We’ll play our own role in trying to make it more competitive. I think we should also definitely invest in production of batteries because we’ve got all the mining raw materials to support that as well. We’re examining that as well, and we’re going to try to participate in that. So it’s an exciting future.”