Freyr, a lithium-Ion battery start-up, announced an agreement for at least 31 gigawatt hours of battery cells for an undisclosed energy-storage firm.
Courtesy of Freyr
Norwegian lithium-ion battery start-up Freyr Battery announced an agreement to provide at least 31 gigawatt hours of battery cells. The undisclosed customer is a provider of energy-storage systems, showing again that lithium-ion batteries will end up in more applications than just electric vehicles.
Freyr (ticker: FREY) stock is up 3.2% in midday trading Thursday. The S&P 500 is down about 0.3%. The Dow Jones Industrial Average is up about 0.3%.
Freyr completed a merger with a special-purpose acquisition company back in July, giving it a public listing and providing about $700 million to help build new lithium-ion battery capacity. The company is developing a facility with 43 gigawatt hours of annual battery-cell-production capacity in Mo i Rana, Norway.
“Announcing our first significant offtake agreement is a major milestone,” said CEO Tom Jensen in the company’s news release. “This development advances us toward a final investment decision, the start of construction on our initial Gigafactories, and industrial-scale commercialization of Freyr’s clean battery cells.”
Freyr plans to used renewable energy in the construction of its battery cells, lowering the carbon footprint of its operations. The company also plans to offer lower-cost battery cells and has licensed new technology from Cambridge, Mass.-based 24M to incorporate into Freyr’s factories.
The company added in the news release that the 31 gigawatt hours of battery cells should equate to about $3 billion in sales between 2023 and 2028. Prices are projected to fall over time. Initial prices should be higher than prices down the road, but the average price works out to about $100 per kilowatt-hour.
And 31 gigawatt hours is enough to power roughly 600,000 electric vehicles. This customer isn’t an EV maker, though. Lithium-ion batteries are also being used by businesses to cut their power bills and by utilities to make renewable-power-generating assets, such as wind and solar, part of baseload generating capacity.
Baseload capacity is the minimum electricity required at any time, despite any drop in wind or sunshine. Batteries can store some of the power generated for use later.
Industrial customers are often charged an electricity rate based on the peak price paid over a month. Using battery storage can shift an industrial company’s demanded from a utility to times when prices are lower.
Battery backup storage is a relatively new application for lithium-ion batteries, but some companies are already making inroads. Tesla
‘s ( TSLA
) battery-storage business generated $806 million in third-quarter sales out of total sales of $13.8 billion.
Write to Al Root at [email protected]
