The Inflation Reduction Act’s (IRA) subsidies could lead to the scrapping of proposals for a “gigafactory”, worth £200 million, that would make batteries in Scotland.
AMTE Power, a battery manufacturer quoted on Aim, plans to produce eight million batteries cells per annum at its proposed Dundee site, where they hope to start production as soon as 2026. The project could lead to the creation of 215 new jobs and would provide batteries for electric vehicle manufacturers as well as developers of electricity storage.
The company has not yet secured enough government funding to move forward with the project. Alan Hollis AMTE’s chief executive said the company was actively considering building a gigafactory instead in America because of the incentives Inflation Reduction Act.
“While we struggle to get the same level of support from Scottish and UK governments, we see very, very favorable support packages in the US, driven by the Inflation Reduction Act.
“Do we ultimately want to move out of the UK?” We are UK-based technology developers, UK-based manufacturers and want to serve the UK market. We have to look at all the options available. “America is the best option for now.”
Hollis’ warning, first reported by Sky News, stated that grant funding from the UK and Scottish Governments was “critical” for the Dundee Project to move forward. The grant funding should cover between 15 and 20 percent of the capital investment.
He also called on the government to examine further incentives to support ongoing operational costs in order to remain as competitive as suppliers in America.
He said that the Inflation Reduction Act does not only provide support for the initial investment, but also provides ongoing support. “That’s the reason we are looking at it.” If you can get government support to cover 30% to 50% of your operating costs, that’s a huge consideration.
The comments are just the latest of a number of warnings that the UK energy sector and the clean technology sector have issued, warning the country it risks losing investment if it does not counter the IRA package of $369 billion in taxpayer support.
Drax said that it would prioritise bioenergy in America with carbon capture and storing without rapid action to support the site in North Yorkshire. Shell’s boss urged the government emulate the IRA, warning that America was much more attractive.
Jeremy Hunt has so far refused to respond with a competing package of subsidies. In an article in The Times published last month, he claimed that Biden was leading a global subsidy race which is “distortive”. He also said Britain would not compete with America or the EU on tax breaks and subsidies. Instead, he would prefer a regulatory system “pro-growth”.
AMTE power operates a small facility in Thurso, which produces battery cells used in energy storage projects. Last month, it told investors that Dundee was the preferred location for the gigafactory.
The group was listed in London’s Aim junior market on March 20, 2021. It achieved a valuation of a little over £60million. Since then, the value of its shares has been falling and is currently valued at around £20 million.
Britishvolt failed to raise sufficient cash in January to start construction on a gigafactory site in Blyth, Northumberland.
AMTE Power reported a turnover of £550,000, and a loss before tax of £3.72million in the six-month period ending December.