Europe Funds First Battery 'Gigafactory'

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe has announced financial backing for the region's largest planned electric battery production plant in Sweden.

The European Investment Bank (EIB) has approved a loan of 52.5 million euro ($68 million) to get the Skelleftea demonstration plant underway, with the goal of it becoming Europe's first 8-gigawatt hour (GWh) plant. The project is being developed by Northvolt (Stockholm, Sweden), formerly SGF Energy AB, which was formed by Peter Carlsson and Paolo Cerruti, two former senior executives at Tesla Motors Incorporated (NASDAQ:TSLA) (Palo Alto, California). It is expected to cost $4.3 billion to construct.

The loan is being supported by the InnovFin--European Union (EU) Finance for Innovators programme--aimed at fast-tracking the rollout of innovative companies in Europe. Northvolt's batteries are being targeted for use in transport, stationary storage, and industrial and consumer applications. Europe is playing catch-up with Japan, China and South Korea in the production of batteries for the rapidly growing electric vehicle sector.

Ambroise Fayolle, vice-president of the EIB, commented: "The Bank is fulfilling one of its main purposes by supporting this type of research and development in Europe. With the growing momentum of clean energy and electric mobility, batteries will become ever more important. Europe is currently lagging behind when it comes to battery manufacturing and this highly innovative and strategic project deserves European backing to fill that gap."

Maroš Šefčovič, vice president of the European Commission (EC) in charge of the Energy Union, added: "Batteries are a strategic component of our competitiveness, and to capture a new European market worth 250 billion euro ($308 billion) annually as of 2025, we need to act fast. I therefore welcome the decision taken by the EIB, which will help this industry-led project take off the ground. It is important to pool all available instruments at the national and European level, such as InnovFin. The European Battery Alliance will continue supporting prospective partnerships throughout the value chain."

Northvolt Chief Executive Officer Peter Carlsson, said: "Europe is moving rapidly towards electrification. Northvolt's objective is to build the world's greenest battery to enable the transition. With the support from the European Investment Bank and the European Union, we are now one step closer to establishing a competitive European battery manufacturing value chain."

The large-scale lithium-ion battery factory in Skellefteå will serve as the main production site, which includes active material preparation, cell assembly, recycling and auxiliaries. In total, the Skellefteå operation will employ between 2,000 and 2,500 people. Work is expected to start later this year, with production expected to start in 2020. The plant will have an annual production capacity of 32 gigawatt hours (GWh) by 2023.

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