Battery developers struggle to access government support

Firms involved in the development of batteries are finding it hard to access government support, the recently-published UK Battery Strategy reveals.

The strategy – published on Sunday (26 November) – outlines the steps government is taking to “achieve a globally competitive battery supply chain by 2030, that supports economic prosperity and the net zero transition”.

It includes details of how the UK will design and develop the batteries of the future; strengthen the resilience of UK manufacturing supply chains; and enable the development of a sustainable battery industry. It also pledges an additional £50 million to support battery industrialisation centres.

The report also details barriers that are currently preventing greater investment within the sector.

In the 69-page document, the government reveals that supply chain partners are currently struggling to gain support from schemes set up to fund the development of batteries.

In particular, the report reveals that supply chain partners are struggling to qualify for support through the Energy Intensive Industries (EII) compensation scheme and EII exemption scheme.

Both schemes have been in existence for the best part of a decade and are designed to support heavy industry by reducing their energy costs.

Last year, the government announced that eligibility would be extended to the manufacture of lithium-ion batteries and accelerators.

However, stakeholder engagement published as part of the UK Battery Strategy reveals that “while industry welcomes the government’s actions to lower energy costs, the process to qualify for support from the EII and Supercharger schemes is perceived as oriented towards established industries with existing infrastructure”.

It adds: “New businesses in the battery supply chain that could be eligible, based on the sector they operate in, have found that they are not able to pass the Business Level Test.

“If firms are not able to access energy cost support, new entrants face significantly higher costs than European competitors.

“The Department for Business and Trade (DBT) is working closely with firms in the battery supply chain to ensure that they understand the eligibility requirements to submit successful applications.”

The publication of the strategy has been widely welcomed, however many within the sector have called on the government to continue to go further.

James Frith, head of Volta Energy Technologies’ European operations, said that while “the additional £50 million to support battery industrialisation centres could not come at a better time […] the government needs to continue to work with industry and investors to make sure that the sector grows and is at the forefront of technical development”.

Quentin Willson, founder at FairCharge, added that investors still need more certainty from government.

He added: “Global investors and industry need to see consistency on battery and supply chain policy. But China, the U.S. and Europe are powering ahead with battery investment, so the sums involved in the U.K. are rather small. The Conservatives know that Labour has a carefully crafted battery and EV plan so this is also very much of a defensive reaction.

“It is though good news for the EV, battery and renewables sector. This is exactly the sort of future battery strategy and EV vision that Fully Charged and FairCharge have been asking for for the last two years.”

Less optimistic about the announcement, Ben Nelmes, chief executive at New Automotive, added: “The government’s battery strategy is a good first step, but it fails to match the scale of the money being spent by international competitors or the strength of the regulation being introduced in Europe or North America.

“Ministers will have to do better if they want to secure Britain’s place as a major battery manufacturing nation.”