Written evidence from Cross Sector Battery Systems Innovation Network Advisory Board (BEV0025)

 

 

Cross Sector Battery Systems Innovation Network Advisory Board written evidence to Batteries for electric vehicle manufacturing call for evidence

  1. The Cross Sector Battery Systems Innovation Network[1] aims to create an open and collaborative cross-sectoral community for innovators in battery manufacturing (including next-generation batteries), the related supply chain and end users. The Network is funded by Innovate UK KTN and the Faraday Battery Challenge and is helping to:

a)      Open new markets for the battery industry, by introducing the community to new sectors, thus support the growth of the UK economy

b)      Promote innovation in batteries by identifying technical gaps for their introduction to various sectors

c)      Help decarbonise a wide range of end-users from rail, maritime, aviation, construction etc. By enabling the adoption of batteries thus supporting the Net Zero agenda

 

  1. With a membership of 4734 people and over 450 organisations featured in our battery systems landscape map[2], the Cross Sector Battery Systems Innovation Network represents organisations from multiple end use sectors and the battery supply chain. As such the response provided here, compiled by the Network Advisory Board, has a focus on the non-automotive and niche vehicle markets for batteries.

 

  1. Question 1: Is there enough UK vehicle manufacturing demand in the UK to support gigafactories?

d)      Beyond the main, large automotive OEMs there are niche (lower volume, high value), long-standing vehicle manufacturers, for example McLaren, Williams and Alexander Dennis, within the UK with a demand for batteries. These organisations and others like them offer an opportunity to technology developers to enter the market with highly specialised high value products. This important route to market supports the wider battery ecosystem in the UK and helps to pull through innovative technology which can then be applied into other markets. Beyond mass automotive vehicle manufacturing there are multiple other end use sectors and applications which will add to the UK demand from a gigafactory.   

  1. Question 2: Will the UK have sufficient battery production supplies by 2025 and 2030 respectively to meet the government phase-out plans for petrol and diesel vehicles?

e)      The UK will have sufficient battery supply however this does not mean it will come from UK battery production. There is an opportunity to support building UK capacity, however, this is unlikely to be established by 2025 - as such the aim should be increasing UK production to meet demand for 2030. It takes several years to establish and ramp up manufacturing capability of this nature - action is needed in the near term to not miss this opportunity. The EU rules of origin will also play a role in the way UK production develops as in order to comply and export to the EU (a significant vehicle market for UK organisations) a certain amount of battery pack and materials processing may need to be completed within the UK or EU.

  1. Question 3: Is UK-based battery production necessary to support the manufacture of electric vehicles in the UK?

f)        No comment

  1. Question 4: What are the risks to the UK automotive industry of not establishing sufficient battery manufacturing capacity in the UK?

g)      No comment

  1. Question 5: What other domestic end uses for batteries would provide a market for UK battery production?

h)      The core aim of the Cross Sector Battery Systems Network is to support the UK in identifying and realising the battery systems opportunity beyond automotive, and facilitate transfer of knowledge and technology between sectors. As such the membership of the network currently covers multiple sectors. The core non-automotive sector opportunities are detailed below, in addition there are many other sectors that will have applications for batteries for example agriculture, construction, mining, space and nuclear.

  1. Aerospace

i)        The UK aerospace industry is the second largest in the world behind that of the United States. The aerospace sector will change with the need to move towards a Net Zero future. There will be multiple technologies utilised in this future including Sustainable Aviation Fuel, Hydrogen and Batteries. The exact technology mix will depend on multiple factors and how the future of flight evolves to connect people, deliver goods and services. Electric flight will not only enable carbon emission reduction but will also develop a new era of quieter and more environmentally friendly transport. Electric power can support vertical take-off and landing, and short take-off and landings. This will allow aircraft to take-off and land in cities and urban areas silently and without emissions.

j)        Commercially available battery cells now allow flight times of up to an hour and these are increasing with continued innovation. There are 117 organisations within the landscape map with activities within this space.

  1. Defence

k)      Defence is a potentially significant end use sector for batteries and provides a wide ranging market opportunity with multiple specification needs dependent on the applications which include vehicles, infrastructure and soldier systems. There are potential security and resilience concerns around this and the lack of UK battery production and supply could be viewed as long-term risk. Of particular concern is continued access to the 18650 format cell, which is used widely in defence batteries. There are 87 organisations within the landscape map with activities within this space.

  1. Maritime

l)        The UK offers high-quality and bespoke maritime design, ship building and manufacturing. As with the aerospace sector a technology mix (Hydrogen, Methanol, Ammonia, Batteries) will be required for the maritime sector to meet the Net zero targets. Whilst an entirely electric vessel for ocean voyages may not be appropriate there are multiple use cases and applications where batteries could be utilised and Norway has already demonstrated this with an all electric ferry[3] in operation since 2015 and the first zero-emission cargo ship[4] also being demonstrated.

m)    With the current battery technology, all-electric vehicles will continue to be used primarily for shorter distances in harbours and for coastal shipping. However, the shipping industry is increasingly using batteries, across all vessel types, to optimise power use in propulsion and auxiliary power to save fuel and reduce maintenance costs. As the sector moves to meet UK Net Zero targets in UK waters this use of batteries is only likely to increase further. There are 94 organisations within the landscape map with activities within this space.

  1. Rail

n)      The UK Government has set a target for the rail industry to decarbonise the rail network by 2040. As such current diesel trains will be replaced either with new trains or by retrofitting and use a range of technologies including electricity, hydrogen and batteries. In order to decarbonise the rail network an understanding of which solution is best suited to different parts of the network will be required, taking into account routes, usage, location etc. For areas of the network with high volumes of traffic the Railway Industry Association (RIA) has shown that electrification is the optimal solution. Other parts of the network will be able to utilise other technologies. In the interim there will likely be a need for battery hybrid trains.

o)      There has been a lot of ongoing work in developing hybrid, hydrogen and battery power sources for trains, both in industry and in R&D particularly through the UK Rail Research & Innovation Network (UKRRIN) universities and industry collaborating. By way of example, Transport for Wales (TfW) has already placed orders for battery hybrids and British manufacturer Vivarail has been delivering these to TfW.

p)      There are 73 organisations within the landscape map with activities within this space. 

  1. Stationary

q)      The stationary storage market offers a significant market for battery production, in the last decade grid-connected battery systems have progressed from niche market to a global one. With the wider move towards electrification the ability to store and discharge electricity on demand will be critical and this will support the electrification of multiple areas of the economy, as such this market is important for the battery production and demand. By the end of 2022, 2.4GW/2.6GWh of battery storage sites had been connected in total in the UK[5]. The International Renewable Energy Agency (IRENA) suggests that a total storage capacity of up to 420GWh will be installed by 2030.

r)       There are multiple applications for grid connected storage systems from residential and industrial storage systems to multi-megawatt batteries that provide grid balancing services and mitigate grid congestion problems at all voltage levels. The requirements for stationary storage will be different to those in other sectors but the demand from this sector could be used to support battery production within the UK. There are 97 organisations within the landscape map with activities within this space.

  1. Niche Automotive

s)      Motorsport, buses, construction and agricultural equipment are all examples of niche automotive markets that have a battery production demand. These application areas are likely to utilise battery products with different specifications to those found on the mass automotive market. These application areas have low volume, high value potential for the UK battery industry. There are 134 organisations within the landscape map with activities within this space.

  1. Summary

t)        Whilst each of these individual sectors may not produce the volume of demand that mass automotive will, there are significant benefits to establish and support a UK battery industry capable of supplying these different sectors. As such viewing the sector through the automotive lens alone is challenging, the development of battery materials, battery production and the manufacture of products which flow into different applications in each of these sectors will add significant value to the UK economy and should be supported. The Faraday Institution expects UK battery demand for private cars, commercial vehicles, HGVs, buses, micro mobility and grid storage to reach over 100 GWh per annum by 2030[6].

  1. Question 6: Does the UK have a sufficient supply of critical materials to support vehicle battery production?

u)      Whilst within the UK there is the potential to mine lithium (in Cornwall), most raw materials (nickel, cobalt, graphite etc) will be imported. However, there is a significant chemical industry within the UK which includes experience in refining nickel, lithium, Platinum Group Metals, aluminium and graphite. This extensive knowledge can support the development and expansion of refining for key materials within the UK - processes which add significant value. In addition, the secondary processing (recycling) of materials provides the opportunity for the UK to secure supply of critical minerals.  This 2018 report[7] details the Chemical Supply Chain opportunity, the report focuses on automotive batteries, however, the study is applicable across all the sectors mentioned above. Thus, we would like to highlight that with a strong UK Chemical industry, regardless of the origin of the raw materials, high value processing can still be done in the UK. 

  1. Question 7: How ready are UK vehicle producers for the EU-UK Trade and Cooperation Agreement (TCA) rules of origin (ROO) phasing in from 2024?

v)      No comment

  1. Question 8: What can the UK learn from investment in other countries in the establishment of gigafactories?

w)    Access to low cost, low carbon energy will be critical to support the establishment of gigafactories within the UK, this was noted recently by vehicle manufacturer Nissan[8]. This is exemplified across Europe but predominantly in Scandinavia. Other countries have well developed regional incentive packages which provide low cost, low carbon energy, alongside access to a skilled workforce and lower barriers to capital project development.

x)      There is an international perception that the UK labour force is expensive when compared to other countries, individual companies within the Cross Sector Battery Systems Innovation Network Advisory Board have completed research to show that this is not the case and the UK is aligned to peer countries. This indicates that the way the UK markets itself is not necessarily representative.

y)      The Scottish government through Zero Waste Scotland published report[9] in July 2021 which details the battery use and expected waste in Scotland.

  1. Question 9: Do we have the skills in the workforce required for the production of batteries? If not, what needs to be done?

z)      There is investment into skills through the Faraday Institution to develop knowledge and academic skills in battery materials, management, manufacturing, recycling and other areas. The requirements for manufacturing skills are also being developed through Faraday Institution and the Faraday Battery Challenge has also done recent work exploring this topic and further funding to establish regional training centres is anticipated in the coming months.

aa) In addition to this, there has been battery manufacturing and therefore the associated skills in the UK for many years. The UK is also home to an extensive chemical and food industry, both of which have skills which could be transferred and applied to the emerging battery manufacturing sector.

bb) Much of the sector-specific manufacturing experience is concentrated in Asia - the ease with which skilled workers can be employed in the UK is critical for the transfer of knowledge and expertise. Other regions are investing in programmes and initiatives to increase the local skilled workforce (e.g. European Battery Academy launched in 2022), highlighting that this is an area which needs investment and attention and is a global issue.

  1. Question 10: Will the cost of UK batteries be competitive compared with batteries produced elsewhere?

cc)  Reducing the cost of battery production for the mass automotive market in the UK will be dependent on multiple factors for example volumes, energy cost, availability of local materials etc. However, the UK has an opportunity to produce batteries for applications in other sectors (as detailed in question 5). These more specialist products for lower volume markets tend to be of higher value which therefore can make them cost competitive.

dd) There is a market failure for these non-automotive and niche automotive applications in the current high volume battery manufacturing market, for example organisations looking for specialist products cannot source the volumes they require at the required cost. This offers a significant opportunity for the UK not just to provide battery production for these applications but to utilise this route to market and manufacture to establish large scale battery production within the UK with worldwide export opportunities. 

  1. Question 11: What impact will the European Union’s proposed Carbon Border Adjustment Mechanism have on UK production?

ee) No comment

 

 

 

The Cross-Sector Battery Systems Innovation Network Advisory Board:

 

AMTE Power

Aerospace Technology Institute (ATI)

Delta Cosworth

Defence Science and Technology Laboratory (DSTL)

Faraday Institution

Innovate UK

Nyobolt

Railway Industry Association

 

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[1] https://www.ukbatteriesnetwork.org

[2] https://www.ukbatteriesnetwork.org/battery-systems-landscape-map

[3] https://www.ship-technology.com/projects/norled-zerocat-electric-powered-ferry/

[4] https://edition.cnn.com/2021/08/25/world/yara-birkeland-norway-crewless-container-ship-spc-intl/index.html

[5] https://www.solarpowerportal.co.uk/blogs/record_800mwh_of_utility_scale_storage_added_in_2022_according_to_solar_med

[6] https://www.faraday.ac.uk/wp-content/uploads/2022/06/2040-Gigafactory-Report_2022_Final_spreads.pdf

[7] https://iuk.ktn-uk.org/wp-content/uploads/2020/08/Automotive-Batteries-Report-Summary-April-2019.pdf

[8] https://www.bbc.co.uk/news/business-64533672

[9] https://www.zerowastescotland.org.uk/sites/default/files/ZWS1700%20PRE%20Mapping%20and%20Forecasting%20Battery%20use%20in%20Scotland%20SUMMARY%20DOC%20V2.pdf