Northvolt battery project approved for EIB loan that could reach €52.5m

Northvolt, which is planning to build a 32 GWh capacity battery storage R&D and production facility in Sweden, has been approved for a European Investment Bank (EIB) loan of up to €52.5 million.

The funds are to be released to support Northvolt’s pilot demonstration plant, which is being built in Västerås, in the north of Sweden. The European Commission (EC) is involved in the financing of the project via InnovFin, which is part of the EC’s Energy Demo Projects (EDP) Facility, and short for EU Finance for Innovators Energy Demonstration Projects.

Construction of the pilot line is scheduled to begin in the coming months, once all financial arrangements have been finalized.

The purpose of Northvolt’s Västerås facility is to demonstrate the commercial viability of supporting research into lithium-ion battery technologies, firstly for electric vehicles (EVs) and latterly for stationary storage applications that could be installed across Europe to offer frequency regulation and grid balancing services.

It is estimated that the entire Northvolt project will require approximately €4 billion in funding, with investment drawn from both the public and private purse. Already, Northvolt has attracted co-financing from ABB, and investment from Swedish truck maker, Scania and Danish wind power giant, Vestas for a combined total of more than €20 million. The Swedish government has also loaned €15 million to the project.

The location for the planned production facility, which Northvolt hopes can become the Tesla Gigafactory of Europe, is Skellefteå.

“Europe is moving rapidly towards electrification,” said Northvolt CEO Peter Carlsson. “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 EIB’s VP Ambroise Fayolle said that the growing momentum of clean energy and electric mobility in Europe is positioning battery technology at the heart of the continent’s energy mix, adding, “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, the EC’s VP of the Energy Union, stressed the importance of batteries in Europe’s hope to maintain competitiveness on a global stage. “To capture a new European market worth €250 billion annually as of 2025, we need to act fast,” he urged.

“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.”

According to EC Commissioner, Carlos Moedas, who is in charge of the EC’s research, science and innovation department, 40% of all patents for renewable technologies belong to European companies.

“The EU is undoubtedly leading the fight against climate change,” he said. “But many of Europe’s great innovations in clean energy technologies end up being produced elsewhere, meaning that others make much more money out of European innovations than we do. This loan decision will help to correct this.”

Energy storage opportunities in Europe are discussed at length in the forthcoming pv magazine Energy Storage Special, which is published in February and will be distributed at the Energy Storage Europe event in Düsseldorf, held between March 13 – 15.