Going giga: how the UK is investing in supersized battery production  

With the news that the UK is to be home to not one but two new gigafactories, Andrew Tunnicliffe speaks with AMTE Power and BritishVolt to find out what the factories are, what they’ll mean for the future of a battery-powered Britain, and what challenges stand in their way. 

For years, the UK has largely relied on supplies of lithium-ion batteries from around the world. Domestically, whilst there is some production, the supply has been outweighed by demand.

While there are some battery-producing facilities, there has only been one supersize operation, or gigafactory, until now. but that is set to change thanks to a collaboration between one the sector’s newest entrants and one of its most established players.

In May 2020, a memorandum of understanding (MoU) signed by AMTE Power and Britishvolt signalled a significant step towards the UK becoming a leading figure in the global lithium-ion manufacturing space. Under the agreement, both will share their knowledge and expertise in the hope of expanding the UK’s onshore manufacturing capabilities and supply chain.

“The UK is world-renowned for its excellence in battery research and development, but currently there is not enough investment or infrastructure in the end-to-end cell manufacturing supply chain,” says BritishVolt’s Isobel Sheldon, a seasoned expert who was recently appointed as the company’s chief strategy officer. It’s a view shared by AMTE’s chief executive Kevin Brundish too.

/ Our ambition is to become one of the greenest battery producers worldwide. /

Battery manufacturers announce big plans

Both parties produce lithium-ion batteries for the automotive and power storage markets. The MoU means AMTE, established in 2013 to serve the high-performance end of the automotive sector, and start-up company BritishVolt, which focuses on mass-produced electric vehicles and was only launched at the end of 2019, will work together to develop two new plants as part of a £4bn investment programme.

AMTE currently has a facility in Thurso, Scotland, but is looking at potential sites in Teesside and Dundee for its new plant. BritishVolt recently announced it had signed another MoU with the Welsh Government after identifying a former RAF base in South Wales for its proposed 10GW annual capacity facility – with the potential to add a further 20GW by 2027.

/ Our ambition is to become one of the greenest battery producers worldwide. /

“The Welsh Government has welcomed us with open arms and impeccable due diligence, and the region meets vital criteria including import/export accessibility, availability of labour and skilled staff, along with convenient geographical proximity to customers and local industrial companies,” Sheldon continues.

The site, which the company says will employ up to 3,500 when fully operational, will supposedly a local ecosystem of 10,000 to 15,000 further jobs for the wider supply chain, including material suppliers, contractors, and local services. When finished, the project will be on the scale of the Tesla-Panasonic facility in Reno, Nevada, and will be powered by its own 200MW solar park.

Sheldon believes the solar park will secure a near carbon neutral electricity input. “Our ambition is to become one of the greenest battery producers worldwide,” she adds. BritishVolt says it hopes to produce enough battery packs for more than 100,000 electric cars a year once completed.

An aerial view of the Bro Tathan site, which may play host to BritishVolt’s gigafactory. Image: Welsh Government

/ We've designed our factory with renewable energy sources in mind, to ensure a low carbon energy input. /

Expanding operations and designing sustainably

By the end of July, BritishVolt had enlisted the help of Pininfarina, a celebrated Italian design studio with expertise in the automotive sector, to create the green facility. Specification will include the use of sustainable materials, constructed in a way that reflects the local environment and culture. Construction on the proposed 2.7 million square foot plant will begin in mid-2021, with the site becoming operational in 2023 under current plans.

Although AMTE’s new facility won’t be on the scale of that of BritishVolt, they are looking to expand their operations significantly.

/ We've designed our factory with renewable energy sources in mind, to ensure a low carbon energy input. /

“We've designed our factory with renewable energy sources in mind, to ensure a low carbon energy input. Scotland is an extremely desirable option for our gigafactory for this reason, considering over 50% of its energy is derived from renewables,” Brundish says.

He adds that the site, which will compliment that in Thurso, will produce “highly specialised products, servicing the niche automotive and energy storage markets.” It is hoped it will be operational within the next two to three years.

/ In five years’ time, the domestic battery market will be worth £5bn. /

The challenges ahead for battery manufacturing

The spectre of Brexit and the Covid-19 pandemic have refocused minds within the automotive sector in recent months, drawing attention to the fragility of battery supply chains.

“Both the pandemic and Brexit have served to highlight the critical nature of onshoring manufacturing capability,” explains Brundish. “The pandemic has highlighted the importance of having supply chains closer to home. It is costly, involves the transportation of hazardous goods, and it is carbon intensive to have lithium-ion batteries imported from abroad. Whereas creating our own onshore gigafactory would ensure quality and eliminate future uncertainty of supply.”

Sheldon shares his view, saying that the pandemic has shown that having carbon-intensive lithium-ion batteries imported from the Far East can be risky and extremely costly in the electric vehicle industry. “By building out our very own infrastructure and supply chain ecosystem, we have the opportunity to advance battery production in the UK and Europe and cement a solid onshore supply chain to ensure quality and future certainty of supply.”

/ In 5 years’ time, the domestic battery market will be worth £5bn. /

Concerns over supply have been echoed by the automotive sector in recent months. A little over a year ago, Jaguar Land Rover CEO Dr Ralf Speth fired a warning shot at the UK, saying it needed a factory on the scale of that of Tesla’s if it were to fully embrace the electric car revolution. He added: “The UK Government can play a critical role to encourage foreign investors to come to the UK.”

As the pandemic took hold in February, Jaguar, along with several other vehicle manufacturers, had to halt production of electric vehicles, although it is not clear this was a direct result of the global event.

Speth’s call for government action is supported by Brundish. “Considering that in five years’ time, the domestic battery market will be worth £5bn, the UK Government should invest in British manufacturing capabilities sooner rather than later,” he says. Over the last 10 years, electric car sales have soared from 17,000 on the road in 2010, to 7.2 million in 2019.

The construction of a battery cell. Image: AMTE

/ We believe the energy storage systems market will be equal in opportunity to automotive. /

Taking advantage of a booming market

By 2026, it is expected that one in five vehicles will be electric in the UK, largely driven by net-zero targets. This, Brundish suggests, will lead to demand for lithium-ion batteries to “skyrocket”.

“Automotive batteries are expected to be the fastest growing end-user for the lithium-ion market worldwide, and the UK Government can become leaders in Europe with enough onshore investment,” adds Sheldon.

For all of its uncertainty, Brexit is offering some hope according to Brundish. He believes that questions over the UK’s future relationship with Europe and the lack of any concrete trade deals with other major global economies, at present at least, is feeding into the reluctance of other large battery manufacturers to invest but opening opportunities for UK-based operations thanks to the “favourable” geographic location – on Europe’s doorstep.

/ We believe the energy storage systems market will be equal in opportunity to automotive. /

As well as the electric vehicle market, Brundish is optimistic for the future of the UK storage market too. He says: “We believe the energy storage systems market will be equal in opportunity to automotive, with demand for renewable residential and grid storage systems set to rise steeply as we transition to green energy.”

As the UK, like many other economies, looks to rebuild, the future of sites like these will be increasingly important. New car production, a major economic contributor to many countries, is already under threat in the UK. Failure to increase the level of domestic battery production will only jeopardise its survival further.

If the UK is to counter those challenges, it needs to support manufacturing initiatives, particularly given its commitments under the Road to Zero initiative. Additionally, as renewable power continues to extend its dominance within the UK’s power mix, battery storage will become increasingly critical, and competitive. The question is, while demand is there, can the government supply?

Playing catch-up in the US

“In Europe, offshore wind has been there for a number of years, but I think in the United States we're a little bit behind that,” said Karustis.

Should it be successful, Halo’s approach could lead to a surge in US onshore wind, which has historically lagged behind other regions in terms of wind installation and production. Since 2016, according to the International Energy Agency, the US has installed just 22.6GW of new onshore wind capacity, compared to 30.7GW in the EU, and 50.3GW in China, struggles that Karustis hopes to address.

Last December, the Chinese Government approved a number of new offshore wind projects, totalling 13GW of production and costing around $13.3bn, as the country continues to invest in utility-scale power. Karustis hopes projects like Halo’s distributed turbine can contribute to a more balanced wind sector in the US, with both large- and small-scale operations expanding renewable power.

“The large-scale wind turbines wouldn't be phased out, it's kind of an ‘all of the above’ thing,” he said. “The large wind farms play a very important role for us in reducing the carbon footprint globally, and hopefully the micro wind market is going to augment that by producing energy where energy is being used. It's a good two-pronged approach.”

This two-pronged approach also includes other renewable power sources, including solar and utility-scale wind; Halo is not trying to replace all clean energy with its turbines, but offer another option for people eager to engage in renewable power, who may have been historically sidelined due to the high costs of building utility-scale facilities or the unsuitable geographical characteristics of the places they live.

“When you look at that market we're very excited because just as megawatt-scale wind is a large market, I think distributed wind can be as big of a market or bigger over time,” said Karustis.

“When you have incentives and improvements in the technology, the costs go down, so you can be more competitive and compete, and that's certainly the case with megawatt-scale wind,” he continued. “Just 15/20 years ago, it wasn't competitive with natural gas [and] coal, but it is now. So those government policies have helped and they've driven the technology improvements, so it's all bundled together.”