Morrow Batteries Is Taking Its First Steps to Norwegian Gigafactory
(Bloomberg) -- Morrow Batteries is starting development of a large-scale factory in Norway, where it will benefit from some of the lowest electricity prices in the world.
The Nordic region, with its abundance of cheap and clean hydro power, could emerge as a European hub for the key technologies needed to electrify everything from transport to heavy industry. Closely held Morrow, where investors include utility Agder Energi AS, plans a pilot plant for batteries before building a bigger factory later this decade.
Later this year, Morrow plans to begin construction on an “industrialization center” that will include the pilot as well as research facilities for recycling, innovation and materials, it said in a statement Monday. The facility will be based near Arendal in southern Norway.
“The region has all possible prerequisites for taking an international position when it comes to the value chain of batteries,” said Terje Andersen, chief executive officer at Morrow Batteries. “Southern Norway, or the battery coast, is simply a Kinder egg, with a surplus of renewable energy, necessary raw materials and a location close to the European markets.”
Demand for battery cells is surging as automakers stake their future on developing more climate-friendly cars. Morgan Stanley said earlier this month that Tesla Inc. and other makers of electric vehicles will probably face a battery shortage.
The global EV battery market is set to grow at a compound annual rate of 52% by 2025, the year when demand out-paces capacity, according to Bank of America Corp. The total available market is expected reach $247 billion by 2030.
Other investors in Morrow include Gjelsten Holding AS as well as the company’s employees. Construction of the gigafactory could start in 2023, with a goal of starting production in the last quarter of 2024.
The innovation center will cost about 100 million euros ($121 million) to 125 million euros to build, while the first phase of the gigafactory could cost as much as 1 billion euros, a spokesman said.
Other, bigger, companies are also targeting Norway as a location for their battery plans. In November, energy major Equinor ASA, Panasonic Corp. and Hydro ASA signed an accord to form a partnership to explore building a green battery business in Norway. They have so far received more than 80 proposals for sites from all over the country.
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