Norwegian Battery Startup FREYR Signs a 31GWh Offtake Deal with Undisclosed Energy Storage Developer

published: 2021-12-24 11:23 | editor: | category: News

Norway’s FREYR Battery announced on December 16 that it has secured its first offtake agreement with an undisclosed company that develops energy storage systems. Under this deal, the undisclosed company will procure at least 31GWh of lithium-ion battery cells from FREYR. Recently listed on the New York Stock Exchange, FREYR is a battery manufacturing startup that has been working with partnering entities to develop a lithium-ion battery cell manufacturing process that is more streamlined, environment-friendly, and cost effective.

According to the related coverage by other renewable energy news outlets, FREYR is among the 20 or so established companies and startups that have plans to build gigafactories in Europe. In its official press release about the offtake agreement, FREYR said that it intends to build four battery production plants in Norway. Furthermore, these factories will emit a very low level of CO2 emissions because their electricity supply will be sourced from renewable energies such as hydropower, which is abundant in Norway.

Construction has begun for a 2GWh cell production line in the Norwegian city of Mo i Rana. FREYR’s battery manufacturing process adopts licensed technologies from 24M, a spinoff from the Massachusetts Institute of Technology. Specifically, 24M offers a manufacturing platform named “SemiSolid” that creates electrodes that are several times thicker than those in the conventional lithium-ion battery cells. Furthermore, 24M has eliminated a substantial portion of inactive materials and processing steps. This means that the platform takes up a lot less facility space, produces a lot less carbon footprints, and costs a lot less than the other cell manufacturing processes.

SemiSolid electrodes, which are made without binder, are a clay-like substance comprised of active materials and electrolyte. They allow the whole lithium-ion cell to have higher energy density but less mass. They are also touted to provide a safer and more reliable performance.

In accordance with the inked offtake deal, FREYR will provide at minimum 31GWh of its battery cells to a listed company that develops energy storage systems. The name of this buyer has yet to be revealed. The product shipment period will last five years from 2023 to 2028, during which FREYR’s plants in Norway will deliver cells to the client. The value of the transaction is estimated to reach around US$3 billion. Tom Jenson, CEO of FREYR, said that this is the first huge offtake deal for his company.

Jensen also stated that with the offtake deal, FREYR has made the final investment decision to begin the construction of its initial production facilities, the commercialization of its products, and the development of its industrial-scale manufacturing capacity. Jensen added that FREYR’s next-generation cells will be integrated with the client’s “deep expertise” in energy storage solutions. Therefore, the global market will have better and more differentiated products for industrial and utility-scale applications in the near future.

In terms of capacity planning, FREYR aims to reach 43GWh by 2025 and 83GWh by 2028. Furthermore, the company thinking about establishing a production base in the US. Website Energy Storage News has reported that FREYR and Koch Strategic Platforms established a joint venture earlier this year to “investigate the possibility” of setting up 50GWh of production capacity in the US for cells based on the SemiSolid platform by 2030.

A related article posted by Barron’s said that the average price of FREYR’s battery cells is now estimated around US$100/kWh. It is expected to drop in the future as FREYR scales up its production. FREYR’s own press release about the offtake deal cited an estimate by Goldman Sachs that the “addressable market for battery storage applications” will come to US$33 billion in value and 950GWh in installed capacity by 2030. Hence, many battery manufacturers, including FREYR’s compatriot competitor Northvolt, are as aggressive in expanding into the market for energy storage systems as they have been in expanding into the market for electric vehicles.

announcements add announcements     mail print