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Opinions This is a debate post. The post expresses the writer’s attitudes.
Two large Norwegian, traditional industrial companies recently announced that they are abandoning their plans to invest in battery production in Norway. We experience that many people contact us in FREYR Battery to get an explanation for this decision. We can not give it, the actors must do it themselves.
However, we dare to say that the Norwegian battery industry will be large and important in the decades to come when the world will phase out fossil solutions to reduce climate change. This applies both in terms of number of employees, value creation, tax revenues, export revenues, technology development, education and Norway’s role in the world’s energy transition.
“Brexit customs” only gives price surcharges on battery cells to be used in electric cars sold between the UK and the EU
But let’s first clear up the confusion surrounding battery cells and Brexit, which has been mentioned in the Norwegian media as an obstacle to the entire battery industry in Norway. This is not the case. Many people associate battery cells with electric cars, but there is also a rapidly growing market for stationary intermediate storage of renewable energy, which is used when the sun is not shining or there are no windy hours. In addition, the markets for battery-powered ships and for larger commercial vehicles such as buses, lorries and trains, also known as e-mobility solutions, are also growing.
The much-discussed “Brexit tariff” only applies to battery cells produced outside the EU, if they are to be used in EU-produced electric cars which in turn are to be sold to the UK, and vice versa. This accounts for about 15% of the European market. But then we are talking exclusively about cells for electric cars. In Mo i Rana, we will mainly produce battery cells for stationary batteries (ESS), marine applications and e-mobility solutions.
What does it take to create a new Norwegian industrial adventure?
In our experience, there are some clear key elements. Choosing the right battery technology is crucial and one must be able to maintain a high throughput speed and build on a large scale in order to deliver on time. This requires a steady crew. Then solid financing and secure access to sustainable raw materials and renewable energy are needed. Here, Norway has several advantages in the form of: high industrial competence, extensive experience in the development of large complex projects, access to affordable renewable energy and advantageous logistics to Europe and the world.
Last but not least, you also need customers, but we are not worried about that. Reputable research agencies estimate that the demand for batteries will increase between 15-20 times in the next ten years and from there a further 3-4 times in the next ten years until 2040. Estimates show that global demand will increase from 350 GWh annually in 2020, to closer 20,000 GWh in 2040. Norway should obviously take part in this rapidly growing market, and there are enormous opportunities here.
FREYR Battery is on schedule with the investment in Norway
In FREYR, we are currently building our customer qualification factory in Mo i Rana, with the first battery delivery planned in less than a year. This summer we went public on the New York Stock Exchange and raised over $ 700 million in start-up capital. The plan for the first full-scale factory, a so-called Giga factory, is well advanced and we are in the final phase of several customer dialogues. We therefore feel that we are on track with our set plan for our factories in Mo i Rana. At the same time, we are working on the planning of additional Giga factories in Norway, Finland and the USA to take part in exponentially growing global demand.
The green income of the future and sustainable employment
The closure of the battery investment of the two other Norwegian industrial companies that were in partnership with an international battery manufacturer is a crossroads. We would like the Norwegian authorities to step in and emphasize the possibilities and importance of building a national value chain for battery technology. Norway should have very big ambitions here.
FREYR has a positive dialogue with the Norwegian authorities to ensure similar financing schemes as other battery investments in Europe have, and which other industries have historically benefited from through export financing or other schemes.
We hope for many Norwegian battery manufacturers throughout the entire value chain in the future. We need a battery cluster in Norway to get attention from both politicians and talents in a world in transition. The need for green batteries produced in the most sustainable way possible will continue to be Norway’s largest business opportunity in the next decade.
As we gradually phase out revenues from oil and gas, the battery industry would like to be there as the answer to new green revenues and sustainable employment. We believe that Norway is very well positioned to become a world leader in this industry.
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