In January this year, Freyr signed an agreement to provide Honeywell with 19 GWh of battery cells from 2023 through 2030 for use in a variety of energy storage systems applications. Deliveries will initially be made from the company’s first Gigafactory in Norway, but as demand ramps, other Freyr Gigafactories in the US and other countries may also get involved.
It is the third large deal that Freyr has struck since the company went public last summer. In October, the company signed a JV agreement with Koch Strategic Platforms (KSP) for 50 GWh of battery cell manufacturing and in December it signed a deal to provide 31 GWh of battery cells to a leading global energy storage system provider.
Can you tell me more about Honeywell and Freyr, a bit of background?
Freyr Battery is a developer of clean battery solutions that aims to play a key role in the global transformation from carbon-based technology to renewable, green energy systems. We believe that clean batteries - for use in electric vehicles (EVs) and in energy storage systems (ESS) - are a critical component in expediting the transition to sustainable energy.
Norway is a leading country in adopting green technology - more than 98 percent of the country’s electricity is renewable - and Freyr has an ambition to deploy that expertise across Europe and the US. We are planning to develop up to 43 and 100 GWh of battery cell production capacity by 2025 and 2030 in Europe and up to 50 GWh of battery cell production by 2030 in the US together with Koch Strategic Platforms
Freyr is well positioned in that we are utilising a technology developed by 24M, a US-based spin-off from MIT, that reduces the number of steps required to manufacture battery cells while still utilizing existing supply chains for conventional lithium-ion batteries.
Freyr’s most recent deal involves a partnership with Honeywell to provide battery cells for their cutting-edge energy storage solutions to address the needs of a wide range of commercial and industrial customers. As part of the collaboration, Freyr intends to provide Honeywell with 19 GWh of battery cells from 2023 through 2030 for a multitude of energy storage system applications.
The Honeywell agreement was the third large deal that Freyr has signed since going public in July 2021. We signed a JV agreement with Koch Strategic Platforms (KSP) for a potential 50 GWh of battery cell manufacturing in the US in October 2021 and a conditional agreement to provide 31 GWh of battery cells with a leading global ESS provider in December 2021.
What is the current situation with the global energy storage sector at the moment and how does this collaboration link into this?
Given that we are in the midst of a global energy crisis, exacerbated by geopolitical tensions, the need to create and store renewable energy is of paramount importance. If the US, European Union, Norway, and other countries around the world are going to meet the requirements outlined in the Paris Agreement, we believe that these countries need to cut CO2 emissions in half by 2030.
Currently, the US derives only around 20 percent of its energy from renewable sources. If we don’t recommit to decarbonisation and the implementation of renewable energy, we will not get there.
At Freyr, we believe that ESS will play a pivotal role in decarbonisation and developing a reliable energy grid that can be utilised when the wind doesn’t blow and the sun doesn’t shine. Developing local supply chains and gigafactories will also better position the US and Europe to solidify energy security and independence.
The partnership with Honeywell demonstrates the growing importance of energy storage on both an industrial and commercial scale. Fortune 500 companies are beginning to see that the energy transition is no longer a choice but a matter of survival for their businesses.
Can you say a bit more about those Honeywell technology offerings that Freyr will be using? Particularly the integrated automation, field instrumentation and security integration solutions.
Honeywell has more than a decade of experience in providing automation, software, and various machinery into the lithium-ion battery industry.
The battery cells produced through this project can be utilised by “behind-the-meter” or industrial locations, as well as “front-of-the-meter” locations like large solar and wind renewable power generation sites.
By teaming up with Honeywell, Freyr is not only supplying them with decarbonised battery solutions, but also leveraging their existing footprint and competence in developing machinery for advanced software in the battery industry. This will allow Freyr an opportunity to provide even more cost competitive solutions for the decarbonising energy sector in the US and Europe.
Stanford University published a research paper outlining that the US power grid could reach 100 percent renewable power penetration by 2050. This new cost competitive electricity mix would rely largely on solar, wind and hydro development as well as energy storage technology. In that context, we see that the Battery ESS technology development is vital to the continued decarbonisation of global power systems.
Can you give us any details of how the storage solutions developed by the collaboration will be used and potential customers? Which markets? Just in the US or into Europe or globally?
This agreement represents one of the first gigascale developments of a US based technology that will help ensure the scale-up of decarbonisation of energy systems across both the US and Europe. Having Honeywell as a partner is a core part of that strategy.
Honeywell is able to use the cells in energy storage systems for commercial, industrial and utility-scale customers, including projects coupled with renewable energy projects.
Can you say more about the planned factory at Mo i Rana Norway? And also about other sites in Finland and the US?
In 2021, we commenced construction of our Customer Qualification Plant (CQP) in Mo i Rana, Norway. The CQP is intended to support the rapid development of Freyr’s initial production capacity and validate and improve the technology, materials, and cell design as the company prepares for commercial-scale production at its planned Gigafactories.
The CQP is now being constructed at the quay in Mo Industrial Park inside an existing 13,000-square-meter building that was previously used for manufacturing pipes. It will enable industrial-scale implementation of the 24M technology, testing of materials and battery cells, and the supply of samples to existing and potential customers. The start of the operations is targeted for the second half of 2022.
The strategic location of the CQP will benefit from access to reliable and cost-competitive renewable energy to power our operations, and a highly skilled workforce while providing critical training on a true industrial scale facility before replicating this solution at multi GWh scale across an increasing number of facilities.
In addition to the CQP that is already being constructed, we have also announced potential development of GWh industrial-scale battery cell production in Mo i Rana, as well as in Vaasa, Finland, and the United States.
What will the sector look like in say ten years’ time?
Worldwide demand for battery cell production is projected to reach nine terawatt-hours (“TWh”) in 2030, which may exceed the anticipated annual global production at that time. Currently, the world’s battery supply is not on track to meet the Intergovernmental Panel on Climate Change’s carbon scenario for limiting global warming to no more than 1.5 degrees Celsius.
The gap between supply and demand will only widen in subsequent years unless the battery industry makes major strides in the next decade. Future demand will stem primarily from the EV market, as well as from the stationary storage and commercial mobility sectors. Meeting global needs on the path to net zero will require a rapid acceleration of battery production, addressing regional supply requirements through clean and sustainable sourcing and manufacturing, driven by the innovative use of technology to ensure speed and scalability.
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