AMTE Power's New Dundee Battery Plant – Right Place Right Time?

"AMTE has been developing its technology since 2014," says Dave Pell, AMTE Power's Commercial Director. 

"We've got to a point where we're scaling that technology up and the next logical step for us was to move from a small manufacturing site to a larger site."

In July, the company revealed that the site – due to be the first of many – would be in Dundee. The Scottish city, located on the Tay river estuary, has a long industrial history and, with AMTE laying down roots, that tradition seems set to continue.

But the world surrounding AMTE, Dundee, and the UK generally, seems uncertain. Interest rates are rising, car sales are declining, and energy is becoming inexorably more expensive. However, for Pell and AMTE, the global disruption may prove to be an opportunity, rather than a challenge. 

Timing is Everything 

"We chose the megafactory route – so sub-one gigawatt hour of production – for a number of reasons," says Pell.

"First of all, it's quicker to get our technology to market. It provides a platform and option to build a series of smaller production facilities, more megafactories, if we want to. And we still have the possibility of building a gigafactory, too. This gives us a first-mover advantage because we can put a megactory into certain existing sites within the UK."

What's more, rather than narrowly focusing on the automotive market, AMTE is maintaining a level of flexibility that should allow it to adapt to any changes in demand across the market. 

"At the moment, the demand for both high-power cells and in energy storage is significant," explains Pell. 

"I think in energy storage applications, there is going to be some further significant growth there. And, if you look at the plans for the site it provides us with a modular approach, as well as the option to put a gigafactory in play in the UK – it allows us to build out behind customer demand."

That modular approach to factory construction also allows AMTE to swap its production efforts on the fly. 

"If we see that demand is stronger in automotive, then we've got that option. If we see it stronger in energy storage, we've got the option to move to energy storage," says Pell.

"Our view is that the high-power cell and its variants will have a significant market. We've got a similar option for sodium-ion. We think that the growth in both areas and the legislative drive to net zero mean that the industry has got to make that change and we happen to be in the right place, we believe, at the right time."

The right place, in this instance, is Dundee. 

"There are a number of pluses to going to Dundee," says Pell.

"First of all, it's a pre-built site. The second thing, which is really important to us, is that it has a renewable energy supply with combined heat and power and wind energy. We may add solar to that, too. The third reason is we've had a collaborative approach with MSIP [Michelin Scotland Innovation Parc, where the megafactory is located] for some time."

However, according to Pell, Dundee's attraction runs deeper still.

"There's also the history of manufacturing in Dundee, so we've got a skilled workforce. All that supports our sustainability drive and ambition."

Disruption and Demand

Demand for AMTE's battery packs has never been higher but, at the same time, disruption and disquiet around the world mean that economies are more highly strung and vulnerable than ever. 

Disrupted supply chains are having to manage unprecedented demand for lithium and other minerals essential for batteries. Similarly, rising energy prices are forcing governments to look at alternative methods of generation and storage but inflation and rising prices are dampening the mood for investment.

Squaring those circles is unlikely to be easy. 

"It's tough," says Pell. 

"The scaling of supply chain demand for lithium-ion cells is putting a lot of stress on the market, that is for sure." 

Fortunately, Pell says that AMTE is in "a good position" on its supply. 

"It's something we've got our eyes turned to and it is something that we will continue to work at so that we can secure the supply chain we need for seven, 10, and 15 years out."

The demand for batteries, however, is only set to grow – even in relatively small automotive markets such as the UK.

"It's interesting, we've got real expertise in high-power automotive applications here in the UK," says Pell. 

"You may think of some of the high-power car brands as being overseas based and that's true. But we've also got the heart of Formula One and the heart of performance vehicles is here in the UK. So, we see very strong demand here in the UK. Obviously, part of setting up our megafactory is to sustain UK jobs in the automotive industry and that's really what we were looking to achieve. There are options for us to export yes, but that's our strategic drive."

Perhaps the most recent development in the battery space has been the increased demand for energy storage solutions. With the war in Ukraine causing major disruption to European gas supplies, the rising price of energy is forcing governments and businesses to look at alternative methods of powering their countries. 

"What's happened to energy prices recently has really sharpened everyone's focus on a domestic and individual level," says Pell.

"You are very aware of the changes and what it means for you. Certainly home energy storage and off-grid energy solutions, perhaps for housing associations and new developments, will provide an opportunity that hasn't been possible before and battery supply is a key element of that. You have got to store energy the energy when you're producing it if you are not using it."

While the energy price madness that Europe, and the UK in particular, is experiencing is far from good, the accelerated need to seek out alternative energy generation and storage methods will have long-term benefits for the economy and the environment. 

"There's a growing sense that something has to be done," continues Pell.

"Part of that solution will involve deploying batteries and energy storage systems, as a result, more widely. I think politically, there's a keen sense of urgency and awareness behind it joining it together is always the challenge. But I think we're seeing across the patch a desire, whether it's from construction companies, systems providers, or indeed government to want to really tackle that and join this together in a way that helps accelerate this into the market and relieve some of that pressure that we're feeling in the UK and elsewhere in Europe."

Perhaps the final point of potential disruption comes from within. The UK is in the midst of political chaos, Prime Minister Boris Johnson is due to step down soon and either Rishi Sunak or, more likely, Liz Truss will replace him should either win the hearts and minds of 180,000 Conservative party members. North of the border in Scotland, a renewed bid for independence might be on the cards – despite Sunak and Truss' tough talking.

"At the moment, there is no date set and there is no formal process for that happening. So, we think it still remains a great site for us and we will continue our build-out and acceleration there," says Pell on the Dundee site.

"That's a political situation that will be there for a long while, I suspect."

Regardless of the political and economic situation in the UK or around the world, Pell and AMTE seem confident in the location of the company's first megafactory.

The timing, meanwhile, seems to be almost perfect. One suspects that demand for AMTE's products – particularly within the UK automotive and housing markets is only set to increase rapidly. Watch this space.