There is concern that Australia’s new energy policy pits the batteries and renewable energy storage sector against fossil fuel generators.

The National Energy Guarantee announced last week mandates that energy retailers must buy energy from ‘dispatchable’ sources, like coal, gas, and pumped hydroelectricity storage.

Dispatchable power refers to supplies that can be turned on and off and used at a moment’s notice.

Australian Vanadium chief Vincent Algar says the requirement unfairly pits the new technologies of batteries and renewable energy storage against big oil and gas producers.

“With coal and gas considered a dispatchable energy source under the NEG, what incentive will there be to source dispatchable energy from a battery?” he asked.

Mr Algar - whose company is set up to mine and process vanadium and advocate for vanadium battery technology – says without special assistance, crude economics dictates energy retailers will go for the cheaper coal and gas options.

“If a company is building a renewable energy project, what incentive will there be for them to put that dispatchable energy in the form of a battery?” he asked.

“On top of that is the removal of subsidies for renewable energy, and no clean energy target, so it further reduces any incentives.

“Battery storage, which is in the early stages in Australia, is expensive, especially from an energy point of view. So it's just too easy to go back to diesel, coal and gas.”

Mr Algar says the NEG could slow research and development in advanced renewable energy and battery technologies.

“Australia has the runs on the board. It has invented things like the flow battery [which uses vanadium], and they're doing brilliant work in eastern states that will improve the efficiency of solar panels, for example,” he said.

“These are developments that will generate jobs and make us a net exporter of renewable technology, but this policy could really put a dampener on that.”

University of Queensland economics professor John Quiggin is similarly concerned that the lack of detail in the NEG policy puts renewable energy and storage un uncertain ground.

“We have very little detail, and the short document put out by the Federal Government is very unclear,” he said.

“And there has been little further information from the Australian Energy Market Operator [AEMO].

“So far it appears to suggest the policy is about rescuing coal, which has now been classed dispatchable, and protecting it against genuinely dispatchable energy technologies such as batteries.

“The AEMO note suggests that the different types of power under this scheme may be treated differently, which would be fairer for batteries.

“But it remains to be seen what, if anything, is going to come out of the very vague descriptions we have at the moment.”