By Nora Buli
OSLO (Reuters) – New York-listed Norwegian battery start-up Freyr is accelerating investment in a U.S. plant to benefit from Inflation Reduction Act (IRA) tax credits, its chief executive told Reuters this week.
The IRA incentives have made production in the United States three times as profitable as in Norway, increasing pressure from investors to build where the returns are biggest, Freyr CEO Tom Jensen said in an interview.
Of the two large battery plants Freyr is currently building, plans for Giga America, in the state of Georgia, were previously anticipated to be 10-12 months behind those of Giga Arctic, in northern Norway.
However, the two are now being developed in parallel, he said. Tax credits offered through the IRA meant that Freyr would receive $37 million per gigawatt hour (GWh) of capacity installed in the United States, he added.
“It’s important for us to be clear that we have a big ambition to complete Giga Arctic, but there are many other things we can use our capital on as well,” Jensen said.
The IRA also offers investment tax credits for energy storage projects, he said.
“We have already had many of these developers approaching us, saying they can share some of their investment tax credits with us in order to secure batteries made in the U.S.”
Giga Arctic and Giga America will be capable of producing up to 27 GWh and 34 GWh of battery capacity a year respectively.
Giga America could start up in 2025, Jensen said. A first, smaller customer qualification site in Norway will start production on March 28, but commercial operations are scheduled for 2024.
For now, investments in Norway are continuing in a “measured way”, with the Freyr CEO optimistic that both the European Union and non-EU member Norway will respond to match U.S. incentives in the near future.
(Reporting by Nora Buli; Editing by Jan Harvey)