Source · Select Committees · Business and Trade Committee
Recommendation 4
4
Rejected
Paragraph: 26
Facilitate offtake agreements between OEMs and battery manufacturers for gigafactory funding
Recommendation
Having secure orders from an anchor customer is critical if battery manufacturers are going to raise sufficient funds to build a gigafactory. Offtake agreements between OEMs and battery manufacturers help signal to investors that there is demand for their product. The Advanced Manufacturing Plan and UK Battery Strategy should set out ways in which the Government could help to facilitate offtake agreements between OEMs and battery manufacturers.
Government Response Summary
The government rejected the recommendation to facilitate offtake agreements between OEMs and battery manufacturers, stating that such agreements are a matter for commercial parties, while noting ongoing support for investors and general improvements to the business environment.
Paragraph Reference:
26
Government Response
Rejected
HM Government
Rejected
• Facilitate offtake agreements between OEMs and battery manufacturers to secure orders. • Designate gigafactory sites as strategically important, providing targeted support and priority for infrastructure improvements. 4 https://www.directorstalkinterviews.com/ilika-plc-partnering-with-mpac-group-and-uk-battery- industrialisation-centre-in-scale-up-video/4121129054 A) We continue to work with investors via the Automotive Transformation Fund and facilitate collaboration via our R&D programmes. However, agreements between OEMs and battery manufacturers remain a matter for the commercial parties involved to negotiate. B) The Government has consistently taken decisive steps to support the development of the battery sector and the business environment that it operates in. This includes new measures related to the planning system, the price of energy and access to grid connections announced at Autumn Statement 2023. These include: • £185 million on the Industrial Energy Transformation Fund (IETF) to support industrial sites with investment in more energy efficient and low-carbon technologies. • The publication of a Connections Action Plan jointly with Ofgem, building on industry-led work, to provide direction on further actions to reduce the average delay a project faces to connect to the transmission network. This will help to enable the majority of projects to get their requested connection date with no wait and, for viable projects, reduce overall connection delays from 5 years to no more than 6 months. • Our Transmission Acceleration Action Plan accepts the recommendations from the Electricity Networks Commissioner, Nick Winser in his report which set out a programme of reform to speed up development of new infrastructure, to support delivering up to 50GW of offshore wind power by 2030 and 24GW of new nuclear by 2050.The introduction of new premium planning services across England, with guaranteed accelerated decision dates for major applications and fee refunds wherever these are not met. • £5 million to incentivise greater use of Local Development Orders in England, helping to end delays for businesses so that key commercial projects can secure planning permission faster.