Battery sector | Hydro in search of an ally

At a time when the battery industry for electric vehicles is developing rapidly, Hydro-Québec is looking for an ally ready to invest in helping the state-owned company market what it presents as the “next major technological breakthrough”, learned The Press.

Julien Arsenault
The Press

According to our information, “quality” suitors, in particular Asian and European companies, have come forward since the process began, a little less than a year ago. No agreement has been reached at this time.

Last year, Hydro-Québec commissioned Société Générale – one of the main French banks – to knock on various doors. A few dozen companies were contacted. A “highly confidential” 15-page presentation that The Press was able to consult highlights the center of excellence in transport electrification and energy storage of the state-owned company, located in Varennes, in the southern suburbs of Montreal.

“Hydro-Québec is looking for a partner who will take a stake in its battery activities to finalize the development and accelerate the commercial launch of solid electrolyte batteries for electric vehicles”, is it written in the document.

When questioned, the state-owned company replies that its research into a new generation of “all-solid-state batteries” has “reached a very high level of maturity” and that an agreement with a partner is “crucial” in order to hope that they will find themselves “possibly” in electric vehicles.

Hydro-Quebec claims that this is the “next major technological breakthrough” in particular because it considerably reduces the weight of the batteries. We can therefore increase the energy. These batteries would be safer, argues the state company, due to the absence of flammable liquid electrolyte in their composition.

Steps to take

Despite the progress made, there are still several steps to go through before reaching commercialization. This is where Hydro-Québec needs a helping hand. In addition, automotive giants like Nissan are aiming to produce such batteries.

“It is expensive and you need players who specialize in the industrialization of batteries, says a government source familiar with the matter, but who is not authorized to speak publicly. It is not a financial process. The goal is to put the fruits of research to the benefit of the battery industry in Quebec. »

This person says that a “total sale” of the activities of the Center of Excellence in Transportation Electrification and Energy Storage would not be on the table.

Hydro-Québec has already begun to forge partnerships in the battery niche. For just over two years, Hydro-Québec’s Institute for Electrical Research (IREQ) has been working with Mercedes-Benz to develop next-generation lithium-ion batteries. It was not possible to know if the German giant could be the partner sought.

more questions

The documents prepared by Société Générale do not advance on the size of the investment necessary to commercialize the patents and the work of the Center of Excellence. It is reasonable to believe that the sums would be substantial since we are talking about commercialization and industrialization, that is to say production on a larger scale.

A possible partnership could take the form of the one between Hydro-Québec and Dana in 2018. The American automotive supplier had become, that year, the majority shareholder of TM4, the Quebec subsidiary of the state-owned company specializing in electric motors, with the aim of accelerating its growth. The transaction allowed Hydro-Quebec to pocket 165 million.

In its call for interest, the state-owned company claims to be working on three generations of all-solid batteries, advances the presentation of Société Générale. Marketing could begin as early as 2025, according to the document.

Professor in the department of chemical engineering at Polytechnique Montréal, Gregory Patience, who specializes in the battery sector, among other things, is hardly surprised by the steps taken by Hydro-Québec. After consulting the document prepared by Société Générale, the expert is not worried about the arrival of a possible foreign partner. In his opinion, this is not bad news for the future.

“It’s a strategy,” said Mr. Patience, during a telephone interview. I would say that is desirable. Maybe even it should have been done before. They say [chez Hydro-Québec] have come up with something amazing, but maybe they don’t have the staff to make it happen. »

The Quebec battery industry, a project on which the Legault government is relying heavily, has been at the heart of major announcements in recent months. The German chemical giant BASF as well as the joint venture formed by POSCO (South Korea) and General Motors (GM) have chosen to establish themselves in the industrial park of Bécancour – the place favored by Quebec to develop this new ecosystem – in order to manufacture cathode materials there.

With the collaboration of Jean-Thomas Léveillé, The Press