Morrow Batteries: Power prices in southern Norway not decisive
Brun believes it is a misunderstanding to think that the company chose Arendal solely because of the power prices in Southern Norway. Historically speaking, these have been lower than the rest of Europe, but recently have been very closely linked to the sky-high electricity prices on the continent.
– There are other advantages than electricity that count, including infrastructure, logistics and access to expertise customers where you can recruit the best minds in the world. The area around Arendal also has a well-developed network, says Brun.
The Morrow director points out that the battery industry is less power-intensive than many other Norwegian process industries. Electricity for the production itself is estimated to make up between 5 and 10 per cent of the costs.
– We are probably more focused on the raw material side. That’s where the battle stands. In addition, there is a battle for competence. I use to say that it is more of a competence-intensive industry than a power-intensive industry, he says.
Long-term power agreement
The Morrow director calls the ongoing energy crisis a European challenge, and emphasizes that the company will compete in a European market where others will have the same type of challenges related to electricity prices.
– The point is that we don’t want to be exposed to the prices in the spot market anyway, the question here is the long-term effect of the high power prices, he says.
This month, the company will start construction of the first battery factory, while the gigafactory of a total of four construction stages is expected to be completed in 2028 with a total requirement of 300 MW, which corresponds to an annual consumption of 2.6 TWh.
Production will only be scaled up in 2025, which gives the company time to enter into its first long-term power agreement (PPA), which Brun expects to land during 2024.
– Do you envision entering into a PPA from new power generation, for example a wind farm, or could it be about existing hydropower?
– Now there is already quite formidable power production in that area. It is something we are working on, but we cannot go out and say what the solution will be.
Agder Energi has applied to expand the network in the area. Morrow Batteries plant on a clarification of the grid connection to the last factories by 2025, according to Brun.
The company raised capital of NOK 1 billion in the summer for the construction of its first factory in Arendal, which will have an annual capacity of 1 GWh of battery cells. The investment comes from the companies Siemens, ABB, Nysnø Klimainvesteringer and Arendals Fossekompani.