Archives for Skellefteå

European backing for Northvolt’s battery gigafactory in Sweden

  • In-principle approval of the European Investment Bank to support Northvolts gigafactory for lithium-ion battery cells in Skellefteå, Sweden
  • Pending finalization of due diligence and negotiations, the EIB’s financing commitment is foreseen to be EUR 350 million

 

The European Investment Bank has given its in-principle agreement to support the financing of Europe’s first home-grown gigafactory for lithium-ion battery cells, Northvolt Ett, in Sweden. Upon conclusion of a loan agreement, the financing would be supported by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe.

 

The gigafactory will be established in Skellefteå in northern Sweden – a region home to a prominent raw material and mining cluster which has a long history of process manufacturing and recycling. Noting the region’s clean power base, building the factory in northern Sweden will enable Northvolt to utilize 100% renewable energy within its production processes.

 

EIB Vice-President Andrew McDowell noted: “The development of a competitive and green battery value chain within Europe can not only cut greenhouse gas emissions by decarbonizing power generation and transport, but can also help protect millions of well paid jobs in European industries in the face of increasing global competition. The EUR 350 million loan to Northvolt approved in-principle today by our Board of Directors is the largest ever direct EIB financing approval for battery technology, and we look forward to working with Northvolt over the coming months to finalize contracts.”

 

Maroš Šefčovič, European Commission Vice-President for the Energy Union, said: “The EIB and the Commission are strategic partners under the EU Battery Alliance. I welcome the significant support proposed by the EIB to Northvolt gigafactory as a stepping-stone towards building a competitive, sustainable and innovative value chain, with battery cells manufactured at scale, here, in Europe. Our two institutions are working closely with the industry and key Member States to put the EU on a firm path towards global leadership in this rapidly expanding sector.”

 

Northvolt Ett will serve as Northvolt’s primary production site, hosting active material preparation, cell assembly, recycling and auxiliaries. The construction of the first quarter of the factory will be completed in 2020. Ramping up to full capacity, Northvolt Ett will produce 32 GWh of battery capacity per year.

 

“This EIB in principle approval is a key moment in the process of finalizing our capital raise to support the establishment of Northvolt Ett. Today, we are one step closer to our goal of building the greenest batteries in the world and enabling the European transition to a decarbonized future,” said Peter Carlsson, co-founder and CEO of Northvolt.

 

The capital raise, in which this EIB loan would be included, will finance the establishment of the first 16 GWh of battery capacity production. The batteries from Northvolt Ett are targeted for use in automotive, grid storage, and industrial and portable applications.

 

“Today’s decision by the EIB is very gratifying and a big step towards a large-scale battery production in the EU and a fossil free welfare society. The decision shows that there are prerequisites in Sweden for sustainable battery production, it is important for Sweden and the rest of the EU to produce battery materials and battery cells, based on green, Swedish electricity,” said Ibrahim Baylan, Swedish Minister for Business, Industry and Innovation.

 

Background Information

The European Investment Bank (EIB) is the long-term lending institution of the European Union, owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. In 2018 alone, the Bank made available a record EUR 1.37 billion in loans for Swedish projects in various sectors, including research & development, industry, nearly-zero-energy-buildings and telecommunications.

 

The EIB is the European Union’s bank; the only bank owned by and representing the interests of the European Union Member States. It works closely with other EU institutions to implement EU policy and is the world’s largest multilateral borrower and lender. The EIB provides finance and expertise for sustainable investment projects that contribute to EU policy objectives. More than 90% of its activity is in Europe.

 

Northvolt was founded in 2016 with the mission to build the world’s greenest battery cell, with a minimal carbon footprint and the highest ambitions for recycling, to enable the European transition to renewable energy. Northvolt’s team of experts is building the next generation battery cell factory focused on process innovation, scale and vertical integration. Once completed, it will be one of Europe’s largest battery cell factories and produce 32 GWh worth of capacity annually.

 

The Investment Plan for Europe, known as the Juncker Plan, is one of the European Commission’s top priorities. It focuses on boosting investment to generate jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects.

 

The European Fund for Strategic Investments (EFSI) is the main pillar of the Juncker Plan and provides first loss guarantees, enabling the EIB to invest in more projects that often come with greater risks. EFSI has already yielded tangible results. The projects and agreements approved for financing under EFSI are expected to mobilise almost EUR 393 billion in investments and support 945.000 SMEs in the 28 Member States. More information on the results of the Investment Plan for Europe is available here.

Building the world’s largest battery-powered vehicle

As the value proposition and benefits of battery-enabled electrification spread to new industries, novel solutions are emerging.

 

In one of the more recent developments, Swedish railway industry provider, Railcare, has launched a world-first project to deliver a zero-emissions, battery-powered railway maintenance vehicle.

 

“We want to be at the forefront of innovation, and this project, built around partnership with Epiroc, represents that ambition,” said Daniel Öholm, CEO Railcare Group AB.

 

Outlining the origins of the project, Daniel commented that the work began two years ago.

 

“We began to think about what would be the next generation for our machines; how will they work, how will they look, and what can they do differently? We worked on this for some time, but in the end the outcome became clear when we looked towards the switch to a battery-powered drivetrain.”

 

Although replacing diesel-powered engines with electric represents a major change for Railcare, Daniel believes it reflects a clear and decisive response to the current and future circumstances that the company faces.

 

“A large amount of our activities involve work underground in urban environments. Here, if you work with diesel engines, you encounter a lot of issues with exhaust emissions that can be tackled through electrifying our systems.”

 

“With batteries we can also reduce our carbon footprint, and that’s something our customers were asking for. It’s really the start of an exciting new chapter for railway industries.”

 

The solution

The ambitions crystallized into work to develop a prototype zero-emission Multi Purpose Vehicle (MPV) which can support a variety of Railcare’s maintenance tools, including snow melters and machines for handling ballast (ballast feeders and ballast removers).

 

“The self-propelled MPV was the natural place to begin testing out such a novel concept,” said Daniel, adding that with it Railcare can work towards testing how batteries might power the additional tools that the MPV can support.

 

 

To realize the MPV, Railcare have teamed up with Epiroc, a world-leader in mining and infrastructure industries and a Northvolt partner.

 

Epiroc holds unmatched experience in electrification of heavy industry vehicles and is providing its electric driveline technology and battery technology platform, built around Northvolt battery systems, to Railcare for development of the MPV.

 

The collaboration is the first to be run through Epiroc’s new subdivision committed to advancing battery-powered machinery, Rocvolt.

A render of the battery-powered Railcare MPV, with battery systems to be built by Northvolt (click to enlarge).

 

Since Epiroc’s line-up of battery-powered systems was designed with the mining industry in mind it is well-matched to Railcare’s vision.

 

“Mines and railways can be similarly tough environments to work in, and Epiroc have the experience required to deliver a physically robust product that is built for high-power requirements of heavy industry operations,” explained Daniel.

 

Of the partnership, Helena Hedblom, Epiroc’s Senior Executive Vice President Mining & Infrastructure, stated: “We are happy about this cooperation with Railcare as it is a natural step for Epiroc to collaborate around the technology that we have developed for our underground equipment.”

 

“Cooperating with forward-thinking companies around the battery technology is important to drive volume and reduce costs. This will speed up the electrification process.”

 

“We’re going to be the first to get a battery-powered system on the railway.”
Daniel Öholm, CEO Railcare Group AB

 

Epiroc’s battery-electric technology is built around a modular platform, which means it can readily be scaled up to meet particular system power requirements.

 

Ulf Marklund, co-founder and Executive Vice President of Railcare explained: “The MPV will come installed power of over 1000 kWh. We believe that MPV will be the first and largest battery-powered vehicle on the railway.”

 

“The MPV is built on a 20m long railway wagon and has two drive shafts for its own operation on the workplace. The prototype is equipped with three vacuum pumps, which allows one to connect a material container and use MPV as a Railvac (vacuum cleaner). However, the MPV could of course be used as a towing vehicle for ballast carriage, snow plow, etc.”

 

Daniel added: “The project represents a big challenge, but we’re using a well-developed platform with Epiroc and that’s a great source of confidence.”

 

Development in Skellefteå

Development of the Railcare MPV is already underway at the company’s workshop at Skellefteå harbor, northern Sweden, and Daniel reports that the company anticipates the initial phase of prototype development will be completed in late autumn ahead of a period of testing and validation.

 

“Battery-powered drivetrains have been proven on other systems in other industries, but we need to proceed through that for ourselves. We’re in front of innovation as we want to be, and confident with the partners we have in Epiroc and Northvolt.”

 

Though trialling the MPV prototype will take place in Sweden, Daniel is convinced that the solution will be attractive in other markets too: “These are universal problems we’re tackling, and the solutions can be applied anywhere.”

 

Altogether, Railcare envisions the project establishing an industry concept for an entirely battery-powered system capable of ballast removal and ballast placement – something Daniel describes as a core activity of the rail industry.

 

“By introducing a successful concept in this area, we hope to set a new standard in technology and sustainable thinking within the industry. I truly believe this is the future for railway industry machines and I think that when others see these new technologies working, they won’t want to go back. It’s a challenge, but it’s the future I’m quite sure about that.”