Northvolt claims to have made a breakthrough with a new battery for energy storage. The Swedish start-up company believes that this could reduce the reliance on China in the green transition.
The Swedish group has been backed by Volkswagen BlackRock, and Goldman Sachs. They have developed a Sodium-ion Battery without lithium, cobalt, or nickel – critical metals which manufacturers are scrambling to acquire, leading to price volatility.
Peter Carlsson is the chief executive of Northvolt and the co-founder. He said that the new technology can be worth tens or even hundreds of billions dollars, as it allows the Swedish company to enter regions like the Middle East and Africa for the battery-powered storage of energy.
He said that the order book of energy storage in 10 years could be “as large or potentially as big” than the portfolio of batteries for electric cars, for which Northvolt received orders worth $55bn.
He added, “We aren’t that dependent on these strategic supply chain that China has built in an efficient manner.”
Northvolt is Europe’s greatest hope for competing against dominant Chinese, Korean and Japanese batteries. Northvolt has begun manufacturing lithium-ion battery packs for cars and trucks at a factory in Sweden just below the Arctic Circle. It plans to build three additional plants in Canada and Germany.
The sodium-ion battery is seen as a safer and cheaper alternative to lithium-based batteries, which are widely used for energy storage. This is because the batteries work better in both high and low temperature conditions. But their energy production is far behind that of lithium batteries. This makes sodium cells unsuitable for electric vehicles with limited space.
Northvolt announced on Tuesday that they had validated a battery with a critical energy density of 160 watt-hours per kilogramme. This is close to the energy density of the lithium batteries that are typically used for energy storage. The lithium batteries that are used in electric vehicles have a density of about 250-300Wh/kg, while the ones typically deployed for energy storage only have 180Wh/kg.
Experts from outside said that Northvolt went further than its Chinese competitors, such as CATL (the world’s biggest battery maker), which used oxides with metals like nickel, manganese, or cobalt in their sodium-ion cells. These metals make the batteries more expensive and dangerous, since they can catch fire even at low temperatures.
Northvolt’s batteries use Prussian Blue instead. This pigment was first used to make blue paint in the 18th Century. John Goodenough, Nobel Prize winner for chemistry, first noticed its potential as a battery.
The company hopes to deliver the first samples of lithium-ion batteries to customers in the next year and reach full production by the end the decade. The company would also need to build new factories in addition to the four that it currently plans, if they are going produce lithium-ion battery for cars.
Iola Hughes is the research manager for Rho Motion, a battery consultancy. She said: “It’s important to be first ex-China company to validate a sodium-ion energy storage product.”
She said the success of the sodium-ion battery would be dependent on the price of the lithium batteries which has fallen in recent months and how quickly manufacturers like Northvolt can scale up the new technology.
She said that investors are less excited than they were last year, and that some future developments of the supply chain for sodium-ion batteries may be delayed or even canceled. The low price of lithium has reduced the apparent cost-benefit of sodium ion batteries, she said.
A constant fluctuation in the price of Lithium makes it an unreliable standard, according to the Swedish group.
Carlsson stated that he believed sodium-ion battery would be about one quarter cheaper than lithium batteries, which are typically used for energy storage and are themselves less expensive than batteries used in electric vehicles. He also said that replacing graphite by hard carbon would reduce the carbon footprint and the battery would be able withstand three times as much heat as lithium batteries.
“The combination between thermal capability, cost and sustainability makes us very bullish on the potential of the technology. . . Northvolt’s CEO said that this is a huge opportunity for places like the Middle East and Africa.
Northvolt invited bankers to pitch for roles in a stock exchange listing that could be valued at around $20bn by next year.
Carlsson stated that Northvolt is preparing to go public, but also making sure they have enough financing in case the market conditions do not improve.
He added: “We make sure we’re not dependent on whether or not an IPO window opens up.” Northvolt is said to be preparing debt financing for more than $5bn, according to people familiar with its fundraising.