Value chain

US Government’s $3 billion support for battery value chain will be up for grabs in Q2 2022

The United States has energy storage system assembly sites like this one pictured in Oxnard, California, but very few facilities further upstream in the supply chain. Image: SimpliPhi Power.

The U.S. Department of Energy (DOE) has provided dates and a partial breakdown of grants totaling US$2.9 billion to boost battery production for the electric vehicle (EV) and energy storage markets, as promised by President Biden’s bipartisan infrastructure deal.

The money will be provided by the DOE’s branch, the Office of Energy Efficiency and Renewable Energy (EERE) and will go to battery material refining and production plants, cell manufacturing and recycling facilities and battery packs.

The EERE has issued two Notices of Intent (NOIs) to issue Funding Opportunity Announcements (FOAs) around April-May 2022, it says. The estimated performance period for each award will be around three to four years, he adds.

The announcement is the culmination of years of the United States wanting to become more involved in the battery supply chain. Most countries, including the United States, obtain the vast majority of their battery electric vehicle and battery energy storage system (BESS) batteries from Asia, especially China.

Funding specifics

The first FOA, the “Bipartisan Infrastructure Act – Battery Materials Processing and Battery Manufacturing Funding Opportunity Announcement”, will be the bulk of the money at US$2.8 billion. . It set minimum funding amounts for specific areas. The first three relate to the processing of battery materials:

– A minimum of US$100 million for new commercial-scale battery material processing facilities in the United States

– A minimum of US$50 million for retooling, modernization or expansion projects of one or more eligible existing battery material processing facilities located in the United States

– A minimum of US$50 million for demonstration projects in the United States for processing battery materials

The other three relate to the manufacture and recycling of battery components:

– A minimum of US$100 million for new commercial-scale advanced battery component manufacturing, advanced battery manufacturing, or recycling facilities

– A minimum of US$50 million for projects to retool, modernize or expand one or more existing facilities eligible for Advanced Battery Component Manufacturing, Advanced Battery Manufacturing and Recycling

– A minimum of US$50 million demonstration projects for advanced battery component manufacturing, advanced battery manufacturing and recycling

All installations must be in the United States.

The second, smaller FOA, the “Bipartisan Infrastructure Law (BIL) Electric Drive Vehicle Battery Recycling and Second Life Applications”, will make available US$40 million for the “processing of recycling and reintegration into the supply chain of batteries” and US$20 million for the “Second Use Large-Scale Demonstration Projects”.

The US$2.9 billion is one of the few pots of money promised by the bill, including half a billion dollars for energy storage demonstration projects through the Office of Clean Energy Demonstrations. US$20 billion and an additional US$3 billion in grid flexibility grants. Sources were uniformly positive about the announcement in November, but all pointed out that the introduction of a tax credit for energy storage investments would be a real game-changer for the sector.

The bipartisan infrastructure deal will provide a total of US$62 billion for the country’s push toward a cleaner energy sector.