Swedish battery companies and the EU bank
Without an extensive commercial track record, Nilar is the kind of project for which the European Investment Bank’s financing is vital. The EU bank backs research and scaling up of innovative products, so that they become more attractive to private investors.
“The European Investment Bank is hugely important in driving rapid innovation in small companies with brand new tech,” says Michael Obermayer, Nilar’s chairman.
Tech companies with innovative projects that can’t overcome the capital-intensive scale-up hurdle cannot grow and their ideas may remain on the shelf. “The European Investment Bank’s willingness, to help take Nilar’s technology to the market at the beginning of its commercialisation road through providing loans, is critical,” Obermayer adds.
Nilar’s batteries are used for storing electricity from renewable energy sources but also to balance electricity flows in commercial buildings, and to facilitate rapid electric vehicle charging. This means that energy generated – on a relatively small scale by solar panels in the homes of ‘prosumers’, who both produce and consume energy, and also on a larger scale by hydro-electric, solar or wind power plants – can be stored and consumed locally, with any surplus sold onto the grid. Renewable energy battery storage means that clean energy is available when it is needed, not just when the weather is favourable.
Next generation batteries have a pivotal role in the European Commission’s target of reducing carbon emissions by 55% by 2030. They will also help enhance energy independence—and therefore energy security—for Europe.
Wheels and windmills, turning green
Northvolt’s batteries are also green. But, unlike Nilar’s batteries, Northvolt’s lithium-ion batteries are mostly intended for use in powering electric vehicles.
Electric vehicles don't use a single battery like a phone. Rather they use a pack comprised of thousands of individual lithium-ion cells working together. When the car is charging, electricity is chemically stored inside the batteries. When the car is on the road, the battery releases energy to the electric engine without discharging carbon. Replacing carbon-polluting cars with clean electric vehicles is vital for the green transition.
Nilar and Northvolt are backed by EIB loans which are, in part, under the European Commission InnovFin programme that finances innovative demonstration projects in the fields of energy system transformation, including energy storage.
Nilar’s €46 million loan from the European Investment Bank will help it scale-up to eight production lines from one production line. These batteries will help homeowners, commercial buildings and industries with solar panels, as well as smaller renewable energy power plants, by allowing them to sell surplus green energy.
There is an increasing demand for stationary energy storage, because electricity prices do not yet provide incentives for prosumers and producers to feed the grid. So, storing energy makes economic sense. Stationary energy storage batteries enable producers to use electricity they generate themselves or sell it when demand peaks and prices paid for green energy are higher.
“In battery production, scale and volume is important,” says François Gaudet, who worked on the European Investment Bank team. “The critical factor in the Nilar project was to allow scaling up to improve the competitiveness of Nilar’s products and to demonstrate its commercial viability. Our investment allowed this to happen in one go. If you want to sell more batteries, you have to prove reliability. Nilar needed to scale up to achieve profitability. Otherwise, the tech risks staying on the shelf or being bought out, possibly going outside the EU.”
Scaling up Swedish battery companies
Scaling-up production was also the driver for the EU bank’s backing for Northvolt’s electric car battery.
With an InnovFin-backed loan from the European Investment Bank, the company built a demonstration line of its concept in Västerås, not far from Stockholm. That factory started producing the new type of battery at the end of 2019.
Northvolt has already taken the next step, a lithium-ion battery factory in Skellefteå, northeast Sweden, which will employ up to 1 400 people and be a step towards further battery production capacity of 32 gigawatt-hours by 2023. The company aims to ramp even that up to 40 gigawatt-hours in subsequent years.
The Skellefteå factory is backed by another European Investment Bank loan, this time for $350 million, using the guarantee of the European Fund for Strategic Investments, part of the Investment Plan for Europe. “Renewable energy storage is the key to a carbon-neutral society,” says Peter Carlsson, Northvolt’s chief executive, “and batteries are the key to getting there.”