Sustainable Energy Transition: Batteries, EVs, and Global Markets
The European battery value chain is at a crossroads. With the collapse of major players like Northvolt and Britishvolt, the industry has been forced to reevaluate its strategies and priorities. At RBC’s Global Energy Transition Conference in London, a panel of industry leaders shared their insights on how Europe can navigate these challenges and capitalize on emerging opportunities in the energy transition.
The panel, moderated by Paul Betts, Co-Head of European M&A at RBC Capital Markets, featured Matti Hietanen, CEO of Finnish Minerals Group; Michael Wrotniak, Investment Manager at Orion Resource Partners; Ian Johnston, CEO of Osprey Charging; and Javier Espelta, H2 Director and CTO at Grenergy. Their discussion highlighted the importance of sustainable practices, investment in infrastructure, and the need for a diversified approach to energy storage and production.
The Collapse of Battery Manufacturers
The demise of Northvolt and Britishvolt underscores the volatility of the battery manufacturing sector. Northvolt, once a beacon of hope for the European battery industry, failed to meet production targets, leading to the cancellation of significant contracts and eventual bankruptcy. Britishvolt faced similar struggles, unable to secure the necessary off-take agreements to sustain operations.
"Localizing production is key to mitigating geopolitical risks and ensuring sustainability."
Matti Hietanen, Chief Executive Officer, Finnish Minerals Group
These failures have prompted the industry to pivot towards more sustainable and diversified strategies. As Paul Betts noted, “The battery value chain is the most capital-intensive sector in the energy transition, and the challenges are immense.”
Shifting Focus to Energy Storage
One of the key takeaways from the panel was the growing importance of energy storage. Javier Espelta of Grenergy emphasized the advantages of stationary storage over mobility-focused batteries. “In stationary storage, we have more diversity of off-takers and consolidated markets to extract revenue, such as capacity markets, balancing markets, and ancillary services,” he explained.
"Commodity price is king, but the success of investments often hinges on the people behind the projects."
Michael Wrotniak, Investment Manager, Orion Resource Partners
Grenergy’s flagship project in Chile, the Oasis of Atacama, exemplifies this shift. With a capacity of 12 gigawatt-hours, it is poised to be one of the largest energy storage projects in the Americas. Grenergy is also leveraging its experience in Chile to develop hybrid solar and storage projects in Europe, further diversifying its portfolio.
Localizing Production to Mitigate Risks
Matti Hietanen of Finnish Minerals Group highlighted the importance of localizing production to reduce geopolitical risks. “Chinese companies dominate the precursor and cathode material markets, but European players are hesitant to invest,” he noted. By encouraging Chinese investments in Europe, the industry can leverage advanced technologies while maintaining production within European borders. This approach also provides a buffer against potential geopolitical crises.
Investment and Infrastructure
Michael Wrotniak of Orion Resource Partners stressed the critical role of investment in competent management teams and infrastructure. “Commodity price is king, but the success of our investments often hinges on the people behind the projects,” he said. Orion’s focus on niche commodities like lithium and vanadium reflects its commitment to supporting the upstream segment of the value chain.
Ian Johnston of Osprey Charging shared insights into the rapid expansion of EV charging infrastructure in the UK. “We’ve grown from six charge points in 2018 to 1,400 today, with plans to reach 2,000 by next December,” he said. Johnston emphasized the importance of making EV charging effortless for consumers, noting that the focus is shifting from reliability to ease of use.
"We’ve built a reliable EV charging network, but the focus now is on making it effortless for consumers."
Ian Johnston, Chief Executive Officer, Osprey Charging
The Role of Government and Regulation
Government funding and regulation play a crucial role in shaping the future of the battery value chain. As Wrotniak pointed out, “The geopolitical interface and government funding are more important than ever.” Espelta echoed this sentiment, highlighting the need for streamlined regulatory processes to bring projects to market more quickly.
The Road Ahead
The energy transition is a complex and gradual process. While the challenges are significant, the opportunities are equally compelling. By focusing on sustainable practices, diversifying revenue streams, and investing in advanced technologies and infrastructure, the European battery value chain can position itself for long-term success.
"Energy storage offers more diversity of off-takers and consolidated markets, making it a strategic asset for the future."
Javier Espelta, H2 Director, Chief Technology Officer, Grenergy
As the panelists concluded, collaboration across the value chain, from upstream mining to downstream infrastructure, will be essential. The energy transition is not a switch to be flipped but a journey that requires resilience, innovation, and strategic investment.
