Northvolt and Galp are to set up joint venture, Aurora in Portugal, which aims to become a stepping stone for the development of an integrated lithium-battery value-chain.
With the main goal of establishing Europe’s largest and most sustainable integrated lithium conversion plant, the JV will develop a plant due to have an initial annual production capacity of up to 35,000 tons of battery-grade lithium hydroxide – a critical material required by the lithium-ion battery manufacturing industry, which is expected to grow more than tenfold by the end of the decade.
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The plant will use a conversion process, leveraging recent improvements and technologies to increase sustainability and efficiency. Additionally, the JV is seeking to enable use of green energy to power the conversion process, minimising and eventually avoiding reliance on natural gas, as is the conventional approach.
The joint venture is currently conducting technical and economic studies and looking at several possible site locations. A final investment decision is yet to happen, but the JV is envisaging start of operations by year’s end 2025 and beginning of commercial operations in 2026.
Based on similar projects, the plant could represent an investment estimated at around EUR700m (US$791m) and create as many as 1,500 direct and indirect jobs. The JV is also exploring energy transition funding options to reinforce development of the project.
Galp and Northvolt’s track records and experience are expected to be enhanced with the establishment of partnerships in the value chain, namely in securing spodumene concentrate from suppliers.
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By GlobalDataThe plant will be able to deliver lithium hydroxide for 50 GWh of battery production per year (sufficient for around 700,000 electric vehicles). As part of the agreement, Northvolt will secure an off-take for up to 50% of the plant’s capacity for use in its battery manufacturing.
Galp’s participation within this JV is a result of the company’s plan to develop new businesses aligned with energy transition, taking advantage of its industrial experience and regional presence as an integrated energy player and one of the largest solar power generation players in Iberia.
The projects aim to fit within Galp’s decarbonisation path as well on its capital allocation guidelines, in line with announcements at the company’s latest Capital Markets Day.
“The development of a European battery manufacturing industry provides tremendous economic and societal opportunity for the region,” said Northvolt co-founder and COO, Paolo Cerruti.
“Extending the new European value chain upstream to include raw materials is of critical importance. This joint venture represents a major investment into this area and will position Europe with not only a path to domestic supply of key materials required in the manufacturing of batteries, but the opportunity to set a new standard for sustainability in raw materials sourcing.
“This initiative comes to complement a global sourcing strategy based on high sustainability standards, diversified sources and reduced exposure to geopolitical risks.”
For his part, Galp CEO, Andy Brown, added: “This is a once-in-a-generation opportunity to reposition Europe as a leader in an industry vital to bringing down global CO2 emissions, in line with European and Portuguese climate-change priorities.
“To be successful in this drive, we must all work together, industry and decision makers, with a sense of urgency, because if we do not claim this role today, others will.”
Northvolt has to date secured more than US$27bn worth of contracts from customers, including BMW, Fluence, Scania, Volkswagen, Volvo Cars and Polestar, to support its plans, which include establishing capabilities to enable 50% of all its raw material requirements to be sourced from recycled batteries by 2030.
Galp’s business includes various types of energy – from electricity produced from renewable sources to natural gas and liquid fuels.
As a producer, the company extracts oil and natural gas from reservoirs located miles below sea level, while also being one of the largest Iberian producers of solar-based electricity.
https://northvolt.com/articles/galp-and-northvolt-aurora/
