Australia: ARENA commits AUD 25 million to fast-track Relectrify's inverterless AC1 battery storage system

Mechanism

ARENA, the Australian Commonwealth's renewable-energy financing agency, structured this as a capital grant to accelerate commercialisation of Relectrify's AC1 battery energy storage system. Conventional BESS installations pair a battery pack with a separate power-electronics inverter to convert DC battery output to grid-compatible AC; Relectrify's AC1 instead uses a proprietary cell-level battery management system (BMS) that controls each cell individually so the pack produces AC directly, removing the inverter stage. ARENA states the design reduces degradation and delivers roughly 20% more usable energy over the system's life, with Relectrify claiming 40% more retained capacity after 20 years of daily cycling versus conventional systems and ~99% of available energy delivered per cycle. The AUD 25 million tranche funds deployment of up to 100 MWh of AC1 systems aimed at commercial, industrial and small front-of-meter markets, intended to produce operational performance data and reference sites for prospective customers, alongside a knowledge-sharing component. It follows ARENA's earlier funding of Relectrify's second-life EV-battery repurposing work, which underpinned the cell-level control technology now used in AC1. A separate, smaller AUD 2.9 million matched grant under the Industry Growth Program is funding adaptation of the same cell-level control technology (branded CellSwitch) for heavy-duty e-mobility uses such as electric trucks, buses and mining vehicles.

Downstream implications

• Part of the broader pattern of Western state grants de-risking commercialisation of

domestically-developed battery-management IP rather than cell/material manufacturing itself — a lower-severity, capability-building complement to the mineral-input-substitution grants (e.g. ARENA's SunDrive silver-to-copper solar-cell grant) tracked elsewhere in the western industrial-policy stack.

• If the inverterless BMS approach scales past the 100 MWh demonstration tranche, it could lower

the balance-of-system cost of grid-scale storage independent of battery-cell chemistry or origin, a marginal offset to BESS cost pressure from Chinese LFP-cell dominance without addressing cell supply concentration directly.

• The parallel CellSwitch grant signals an attempt to extend the same domestic BMS IP into

heavy-duty e-mobility, a sector where Australia has limited existing manufacturing presence.

Open questions

• No disclosed unit economics (cost per kWh or per site) for AC1 deployments versus

conventional inverter-based BESS.

• Timeline for progressing from the 100 MWh demonstration tranche to unsubsidised commercial scale

was not disclosed in the primary source.