In 2022, negotiations began to determine where Northvolt‘s gigafactory would be located, with Germany or the United States (US) as options.
After careful consideration, the Swedish manufacturer ultimately decided to establish itself in Heide, in the Dithmarschen district, in the north of the country.
“We are competing not only with the US but also with China in the field of electromobility,” says Dirk Schrödter, Minister and Head of State Chancellery of Schleswig-Holstein, in dialogue with Mobility Portal Europe.
The head of the steering group for the settlement of Northvolt highlights:
“With the battery factory, the conditions are being created for a competitive German and European automotive industry, thus securing its key industrial core on the continent.”
What led them to select this location?
Initially, Peter Carlsson, Chief Executive Officer (CEO) of the company, explained in an interview with a German media outlet that the main concern was the considerable increase in electricity prices in Germany.
This situation triggered a competition for subsidies, where both Germany and the US offered substantial funding to encourage the construction of the plant.
However, ultimately, Heide’s strategic location led it to be chosen.
This is because the spot where the construction is taking place is the region known for hosting Germany’s first wind farm.
According to a report from the state of Schleswig-Holstein, in 2023, 232 wind turbines with a capacity of 1.2 gigawatts (GW) were put into operation in the area, representing 33 per cent of all new wind turbines in the country.
In total, there are 3,169 with a capacity of 8.37 GW.
Even at the national level, the injection of electricity from wind energy increased by 13.8 per cent in 2023 compared to 2022.
That is, it reached a new maximum of 139.3 billion kilowatt-hours (kWh) last year, surpassing the previous maximum of 128.7 billion kWh in 2020.
With a share of 31 per cent, it consolidated itself as the most important source of energy for electricity generation in Germany.
The reasons for this significant increase were a good wind year in 2023 and a 4.3 per cent growth in production.
The surplus of CO2-neutral wind energy produced on the west coast of Schleswig-Holstein is crucial for Northvolt.
Furthermore, the company also aims to save freshwater and use greywater from the local wastewater association to cool the factory.
This aligns with the Swedish firm’s goal of manufacturing the most environmentally friendly battery cells worldwide.
Additionally, the location offers excellent possibilities for connection to transport networks and has adequate infrastructures for living and working.
In this regard, Schrödter explains:
“The North Sea is an excellent spot for surfing, for example (e.g.). And we are creating a new infrastructure for childcare, like Kindergarten and school, including international schools. This is appealing to young families who want to come to Schleswig-Holstein. Plus, we strengthen our universities and universities for applied science, e.g. directly in Heide.”
“We think big: We are not only building a single gigafactory, but a new ecosystem of electromobility in which research and development play a fundamental role. Every location, including Schleswig-Holstein, can only be competitively viable on an international level if all stakeholders –public administration, economy and research– are closely interconnected,” he states.
And he adds: “We have been working on this every day in the region for the last three years. In order to achieve this, we have set up a steering group in our State Chancellery under my leadership. We bring all fields and skills together there.“
It is worth noting that the gigafactory is expected to directly generate approximately 3,000 jobs, with a wide range of opportunities for professionals from different fields, in particular engineers, battery cell experts (such as chemists), and craftsmen.
According to Dirk Schrödter, a total of around 10,000 new jobs in the Heide region are being considered.
Initially, the Swedish company’s plan was to start construction in 2023 so that the first batteries would roll off the production line by the end of 2025.
However, doubts between the United States and Germany delayed these dates until a few days ago when the construction of the Northvolt Drei plant finally began.
The first cells will be built in early 2026 as part of an investment of 4.5 billion euros.
For the commissioning of this plant, the company receives partial support from Germany within the so-called TCTF, Temporary Crisis and Transition Framework, in the amount of 700 million euros.
This amounts to around 564 million euros from the federal government and around 136 million euros from the federal state of Schleswig-Holstein.
Furthermore, the company gets a loan by the KFW, which is backed by the federal government and the state of Schleswig-Holstein.
Once completed in 2029, it is estimated that the gigafactory will produce cells in the order of 60 gigawatt-hours (GWh) per year.
With 60 kWh per car, this would be enough for around one million electric vehicles annually.
This contributes to ensuring and strengthening the competitiveness of a crucial industrial sector in the Federal Republic, such as the automotive industry.
It also plays a key role in the transformation of the economy as a whole.
It is important to mention that Germany is home to some of the world’s leading automotive brands, including Volkswagen, BMW, and Mercedes-Benz, all of which have projects in the field of eMobility.
In this regard, Minister Schrödter states:
“This is not only significant for Schleswig-Holstein and Germany in terms of construction, but it is also extremely important for the competitiveness of the automotive industry throughout Europe. We are open to welcoming many more companies. We have the best conditions for settling here.”
