Considering building a battery factory in Norway – E24

The development and growth of electric car maker Tesla has been followed with scrutinizing eyes for many years, and here at home, the company’s advanced electric cars have become very popular.

At the same time, there is another company that has greatly made the growth and development of Tesla possible: Japan’s Panasonic.

It was Tesla and Panasonic who built the famous “Giga factory” in the Nevada desert, where batteries in electric cars discharge at a rapid rate.

However, Panasonic’s appetite in the battery market is not saturated, because both they and other players see great growth and many opportunities on the horizon, including in Norway.

In an interview with E24, Panasonic, Equinor and Norsk Hydro say they have signed a letter of intent, an agreement that can mean billions in green jobs and investments:

Until the summer of 2021, the three “battery companions” will study the possibilities of establishing a European battery company with a factory in Norway.

– We see how important it is to create opportunities for energy conversion and to handle the climate challenge in a good way. Joining forces with two leading players like Equinor and Panasonic will be important in figuring out if we can build this, says Executive Vice President Arvid Moss of Norsk Hydro, adding:

– It is about building one of the most interesting value chains in the industry of the future.

Brussels landmarks

Panasonic is a global group that invests around the world. Now they are seeing clear trends that are prompting them to take a closer look at Europe:

– Europe is very clear, both from the market point of view and from the political point of view, what it wants to achieve. It’s a great market that we can support, says Allan Swan, Panasonic Energy North America director for E24.

Praise the two partners you have acquired.

– As regards the Nordic countries and Norway in particular, we see it as a very competitive opportunity. It is a competitive and competent workforce and a clear focus from both the business community and the authorities, it continues.

Hydro is now investing heavily in the battery and renewables segment. Hydro-top Arvid Moss also points out what is happening now in Brussels:

– What is important is the direction the EU has set, both with the “New Green Deal” and with its battery and raw materials initiatives, Moss tells E24 and continues:

– The EU is clear that it wants to build a battery industry in Europe, so that both obtain value creation and guarantee an effective transition towards a zero emissions society. The EU has set aside significant funds to support this agenda, Moss says.

– What are the advantages and disadvantages of establishing a facility of this type in Norway and the Nordic countries?

– We are the leading technology provider in this field and in that sense we have a lot to offer. Our partners here are also heavily involved in both the energy transition and the technology development that is taking place in their industries, Swan says and continues.

– This combination attracts us to Norway. Our joint study will show if this is feasible in the market, but we believe that the basis for a business case is there.

Evaluation of different groups of clients

The three companies indicate that they are in an initial stage of the project. Therefore, neither Panasonic, Equinor, nor Hydro want to be specific about the type and size of battery factory they envision.

– When it comes to size, our battery factory, Panasonic Energy of North America (Giga factory in Nevada, journal.anm.) Is the largest in the world by a good margin, says Allan Swan at Panasonic.

– We have a lot of experience in managing large facilities and that means we have the knowledge and experience when we move forward and work on projects like this, he continues.

The companies say that the batteries a potential factory will produce can be used for both cars and other areas of use, without further specifying now.

– Technologically, this can go in several ways and depends on what the end user wants. Battery technology allows us to change chemistry to tailor batteries to the needs of each user. That makes it pretty flexible, says Swan at Panasonic, adding:

– This means that we can both produce batteries for vehicles or other segments.

– Access to batteries will be essential

– What is Equinor’s business case here, will it become a battery supplier?

– We are still in an early stage of this project, but Equinor is on its way to becoming a broad energy company. This initiative should be seen as another investment in the energy transition that we see in both transportation and the energy industry in general, Equinor’s director of business development Anders Hærland tells E24.

He notes that Equinor recently announced that the company will cut net emissions to zero by 2050, and that batteries will be an important driver of several that are needed to achieve that goal.

– Equinor invests heavily in offshore wind farms and You’ve talked before that batteries can play a big role in profitabilityny to balance the electrical network. Do you want to strategically secure access to batteries?

– There is a potential for that. We have been supplying energy through hydrocarbons for four decades and will continue to supply energy in the future, although more and more will be in the form of electrons, says Hærland, continuing:

– We believe that access to batteries will be essential to address the irregularity in the production of renewable energy.

Far from being alone

The project with Equinor and Panasonic is far from the first that Hydro has been involved in. The Norwegian aluminum giant recently announced that they are establishing two new business areas: renewable energy and batteries.

Hydro currently holds an ownership position in Sweden’s Northvolt and Canada’s Corvus Energy. Equinor also owns a stake in Corvus.

Corvus Energy, with the help of Hydro, has built a battery factory in the Bergen area for deliveries to the maritime sector. With Northvolt, Hydro has established Hydro Volt, which will build a battery recycling plant in Fredrikstad.

Hydro is now considering going into another project.

Panasonic, Equinor and Hydro are not alone in their idea of ​​investing in a battery factory or other areas within the battery trend in Norway and the Nordic countries; on the contrary, several players have already come a long way.

Here are some examples:

– How do you assess the competition in the market?

– We are in an initial phase and the market is growing and changing rapidly. There are huge opportunities and we think the time is right, says Swan at Panasonic.

– This is an extremely fast growing market, but instead of looking over the shoulder of the competitors, we will focus on what we can achieve together, says Moss at Norsk Hydro and continues:

– There will be room for many players in this market, and then we will have to do our homework and then we will see if we can make this happen, continue.

The calculation should go up

There is a lot of work ahead of him until next summer, when according to plan he will decide whether to continue with the project or not.

One key is to come up with a plan that can be profitable and scalable. Until the summer, both potential clients and authorities will be contacted.

The Hydro director says that through collaboration with Corvus and Northvolt, they have seen the importance of having industrial expertise when such projects must be elevated to profitable endeavors.

– We have that experience in Hydro and we want to be industrial owners. We want to build an industry that can play a role for society and we’ve shown that before that we can, but we can’t do it alone, says Moss.

– Will this project require public support for its realization or do you foresee that it can be financed by you or other private capital?

– We will have talks with the Norwegian and Brussels authorities about what kind of green support or funding we can get to support this project. How the format will be will be part of the studies and work that we will do now in the future, Moss says.