Nordic region to boast Europe’s largest lithium-ion battery factory

The Sweden energy supplier Northvolt has announced plan to build Europe’s largest lithium-ion battery factory. Construction is set to begin in 2018, large-scale production by the end of 2020. Energy giant Vattenfall among the project’s backers. Elana Summers reports from Zurich.

Northvolt announced plans to build Europe’s largest lithium-ion battery factory to meet the growing demand in the transport and energy storage sectors. (Image credit: Nissan Motors Co., Ltd., flickr/Creative Commons)

Things are moving on the lithium-ion battery front. The Swedish company Northvolt announced yesterday plans to build Europe’s largest lithium-ion battery factory over the next three years.

Its goal: to support the giant societal transformation in how energy is produced, stored and used – and make it happen as quickly and sustainably as possible.

It also wants to put Europe on the lithium-ion battery map.

“This is a bold, very complex, but rational project. Compared with Asia and the US, Europe is behind in the battery industrialisation,” said Paolo Cerruti, COO of Northvolt.

Growing demand in transport, energy sectors

According to Northvolt, electrification and renewable energy storage are the keys to a carbon neutral society. And batteries will play a key role in enabling this transition.

The auto industry will need batteries in huge numbers to replace fossil fuels with electricity, while the ability to store energy is crucial to freeing the world’s energy system from coal, oil and natural gases.

“We foresee a major deficit of lithium ion batteries within a few years, with limited current and planned capacity in place in Europe”, said Peter Carlsson, CEO at Northvolt.

“There is a market window open. We have a solid business plan in place that enables us to produce high quality batteries at an affordable cost.”

Sustainable production

Battery production is energy intensive. In order to create a circular system that covers cradle to grave, Northvolt wants to build its factory in the Nordic region, where it can power the factory and batteries with clean, carbon free, low-cost energy.

It also plans to source raw materials as close to the mines as possible, especially from the mineral-rich Nordic peninsula.

Carlsson told the Financial Times that the company is interested a Finnish mine that produces cobalt and nickel and one of the world’s largest cobalt refineries, also in Finland.

Vattenfall backing the project

One of the investors in the project is the Swedish energy company Vattenfall, which is investing SEK 5 million (EUR 525,000).

“Vattenfall has a clear strategy of supporting the energy transition and climate-smart solutions,” said Andreas Regnell, Vatenfall’s head of strategy. “Electricity storage will be a significant factor in the transition, mostly in the transport sector and also the energy system at large.”

Northolt also has the backing of the Swedish public innovation agency, the Swedish Energy Agency, the conglomerate Stena, and InnoEnergy, the European innovation ecosystem for sustainable energy.

But the project will need additional financing at a later stage. According to Northvolt, the 32 GWh production site will require more than EUR 4 billion over a period of six years. Construction is expected to begin in the second half of 2018, with large-scale production by the end of 2020.

Site selection, team recruiting underway

Northvolt has already begun the process of searching for a site to build the factory. One of the main conditions is that the site have an exceptionally strong grid connection.

For the region selected, the factory would offer the opportunity to develop an innovative industry cluster of expertise around batteries and energy storage.

The company is also recruiting a core team in Stockholm. Its current employees come from companies such as Sony Ericsson, Panasonic, ABB and Renault-Nissan. Carlsson himself was the former supply chain head for Tesla until 2015. Cerruti is also a former Tesla executive.

Carlsson and Cerruti insisted that they they are not looking to compete with their former employer as the Tesla factory will only produce batteries for its own use.

“We are not positioning ourselves at all against Tesla,” Cerruti told the Financial Times.

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