Northvolt commits to building its battery cell plant in Heide

Northvolt has finally given the green light for its investment in the planned battery cell factory in Germany. The Swedish company has reached an agreement with the municipalities of Lohe-Rickelshof and Norderwöhrden and has now officially decided to build the factory near Heide in Schleswig-Holstein. (UPDATE BELOW)

Image: Northvolt

The Northvolt Drei battery factory in Heide was first announced in March 2022. It is scheduled to go into operation in 2026 and reach its full production capacity in 2029. The plant is targeting an output of 60 GWh per year, which should be enough for one million electric cars. In addition to battery production, Northvolt also plans to build a battery recycling plant on site.

As reported by Deutsche Presse-Agentur, the project has now achieved the long-awaited breakthrough: Northvolt has signed a so-called implementation agreement with the municipalities of Lohe-Rickelshof and Norderwöhrden as part of the urban land-use planning process. The two municipalities intend to approve the document in the coming days. The building permit will then follow.

A total of 4.5 billion euros is to be invested in the project over the coming years, creating around 3,000 jobs. An important milestone for the construction of the plant was the state aid approval of around 900 million euros, which was granted by the EU Commission last week. The planned state and federal subsidies may therefore be distributed in the form of a direct grant of 700 million euros and a guarantee of 202 million euros. “Without the aid, Northvolt would build the plant in the United States, where it would be supported in particular under the Inflation Reduction Act,” the EU Commission wrote a week ago.

According to Margrethe Vestager, Vice-President of the Commission responsible for competition policy, the €900 million grant is “the first individual aid approved to prevent an investment from being withdrawn from Europe under the new possibility offered by the Temporary Crisis and Transition Framework (TCTF) since March 2023″. This enables Germany to support the construction of Northvolt’s production plant. “This is an important step for the electrification of transport in Europe while maintaining a level playing field in the internal market,” said Vestager.

Just yesterday, Northvolt announced that it had overcome another hurdle in its expansion strategy in Europe: the Swedes secured new project financing of 5 billion US dollars (equivalent to around 4.6 billion euros), which will enable the expansion of the “Northvolt Ett” gigafactory in Sweden and the implementation of Northvolt’s plans for battery recycling. Even though the amount is stated in US currency, the loan is for corporate projects in Europe. It is not for nothing that the company itself calls it the “largest green loan in Europe to date”. It was taken out on the basis of long-term purchase agreements worth over 55 billion US dollars with partners such as BMW, Scania, Volvo Cars and Volkswagen.

With the new financing, Northvolt now has more than $13 billion in equity and debt to fuel its expansion in Europe and North America – in the form of the Northvolt Ett (Skellefteå, Sweden), Northvolt Dwa (Gdansk, Poland), Northvolt Drei (Heide, Germany), the Northvolt-Volvo Cars joint venture’s Gigafactory “Novo” (Gothenburg, Sweden), Northvolt Fem (Borlänge, Sweden), Northvolt Cuberg (San Leandro, USA) and the recently announced Northvolt Six (Montreal, Canada).

Update 23 January 2024

The municipal council in Norderwöhrden in northern Germany approved Northvolt’s plans on Monday evening. Now the regional office for the environment, in cooperation with the district of Dithmarschen, still has to issue the official building permit for the Swedish company’s plant., (last three update; all links in German)


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