Freyr Battery Announces 31 Gigawatt-Hour Lithium-Ion Deal

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Freyr Battery is a startup company most of us have never heard of. Based in Norway, it completed a merger with a special acquisition company in July that netted the company about $700 million in working capital and trades on the New York stock exchange under the symbol FREY. It is planning to build a battery factory in Mo i Rana, Norway that will have an annual capacity of 43 gigawatt-hours. That may not be the biggest battery factory in the world, but it is in the running.

On its website, Freyr says,”Our business plan leverages a phased development approach utilizing deep partnership-based strategies, including in-licensing of next-generation technologies and joint venture partnerships of proven OEM platforms. This dual technology strategy enables responsive industrial scaling of battery cell capacity in our modularized and flexible production facilities. [We] committed to being a competent and reliable R&D partner driving continuous business process innovation through collaboration.”

According to Barron’s, Freyr announced recently that it has received an order for 31 gigawatt-hours (GWh) of lithium-ion batteries from an undisclosed company. Could it be Polestar, Volkswagen, or some other European EV manufacturer? Actually, no. The company says the buyer is in the energy storage business. CEO Tom Jensen said in a press release last week, “Our first significant offtake agreement is a major milestone. This development advances us toward a final investment decision, the start of construction on our initial Gigafactories, and industrial-scale commercialization of Freyr’s clean battery cells.”

Freyr plans to use renewable energy in the construction of its battery cells, lowering the carbon footprint of its operations. (Norway is blessed with abundant hydro-electric power.) The company also plans to offer lower cost battery cells and has licensed new technology from Cambridge, Massachusetts-based 24M that will be incorporated into its factories. Just last week, Volkswagen also announced a new partnership with 24M, which says it is developing new semi-solid state battery technologies.

Freyr says those 31 GWh of battery cells should equate to about $3 billion in sales between 2023 and 2028. Prices are projected to fall over time. Initial prices should be higher than prices down the road, but the average price works out to about $100 per kilowatt-hour. They would be enough to power about 600,000 cars, but will be used for energy storage instead. Business is using lithium-ion batteries for behind-the-meter storage to reduce their utility bills and wind and solar power generators to store electricity from renewables so it can can contribute to the grid as baseload capacity.

Battery backup storage is a relatively new application for lithium-ion batteries, Barron’s says, but some companies are already making inroads. It points out that Tesla‘s battery storage business generated $806 million in third quarter sales out of total sales of $13.8 billion. That’s a small percentage today, but Elon Musk has said he expects energy storage to be as important to the long term profitability of the company as building electric vehicles.

Clearly integrating renewable energy into the electrical grid will depend on energy storage techniques, whether mechanical, pumped hydro, or batteries. It will be interesting to see who Freyr’s customer for that 31 GWh of batteries turns out to be.


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Steve Hanley

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new." You can follow him on Substack and LinkedIn but not on Fakebook or any social media platforms controlled by narcissistic yahoos.

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