Accelerated Electrification Transition in North East England

Sector and market opportunity

The North East hosts the UK’s biggest car plant as an anchor, with confirmed electric vehicle demand of 100,000 per year and further plans unveiled by Nissan EV36Zero to create a £1 billion EV Hub.

Investment opportunities exist for businesses who can serve the EV supply chain growth across components, power electronics, motors and drives. Further medium-term opportunities also exist across battery recycling, second life battery technology, energy storage, energy systems integration and the north-eastern lithium value chain.

Growth prospects

The global market value for EV batteries is anticipated to reach $134.6 billion by 2027 and UK EV battery production demand is expected to reach 100-130GWh per annum by 2040.

Nissan and Envision AESC’s Sunderland gigafactory, the UK’s first at scale battery gigafactory, will be operational by 2025. In addition, the Northumberland gigafactory at Cambois is considered one of Europe’s premier locations for battery manufacture, with access to deep-water ports, renewable energy and a supportive ecosystem.

Location

The location has a unique geography encompassing a comprehensive array of net zero innovation. This includes 2 gigafactory sites, energy and renewables at the Ports of Blyth and Tyne and high value industrial clusters at the International Advanced Manufacturing Park and NETPark.

The North East’s net zero credentials make it a prime location to meet national and international demand for accelerated electrification, including battery manufacturing with the UK’s first at scale battery plant, automotive and off-highway applications, and clean energy systems.

Connectivity

With 4 international airports within reach, including Newcastle International Airport, businesses can easily feed into and draw from global battery supply chains. The region benefits from excellent road and rail connections to major commercial hubs in the UK. Strong international trade routes facilitate access to markets in the EU and beyond.

The Ports of Tyne, Blyth and Sunderland facilitate seaborne exports. Port of Tyne is also a major vehicle handler, processing 600,000 vehicles per annum - the highest of any UK region.

Local talent and skills

The area is home to a highly-skilled existing workforce in the North East low carbon economy, employing 7,600 – 5% of total regional employment. It has an annual turnover of £2.7 billion and the highest turnover per employee. 3,975 advanced manufacturing enterprises employ 67,000 people, and automotive manufacturing contributes £918 million to regional gross value added (GVA).

There’s a strong talent pipeline, with 52,000 (45%) students studying STEM and nearly 6,000 studying mechanical, electrical and chemical engineering. Newcastle University National Battery Training and Skills Academy and New College Durham are located in the North East.

Research and expertise

The North East has a concentration of leading academics and an excellent R&D environment:

• Newcastle University’s Electrification Process Innovation Cluster delivers industry collaboration across battery tech and power electronics motors and drives (PEMD)
• Durham Energy Institute: green power research and development
• Northumbria University’s US/UK joint Global Centre for Sustainable Li-Ion Battery Recycling
• Sunderland University’s Sustainable Advanced Manufacturing: product and process innovation
• Centre for Process Innovation (CPI): commercialisation of new products and services across materials, formulations, sensors and optimisation
• Offshore and Renewable Energy Catapult: comprehensive, independent test and demonstration facilities

Further details

The North East Knowledge Anchor is a partnership between industry, government, higher and further education aiming to accelerate regional clean energy and green manufacturing growth.

With an emphasis on sustainability, North East-based operations can access green energy sources with direct wire and sleeved energy potential alongside microgrid technology. It has proximity to Dogger Bank windfarm operations and the North Sea Link (NSL) renewable energy interconnector – with opportunities in renewables energy storage.

Local and national government support

Innovate UK’s “Driving the Electric Revolution” challenge supports business-led innovation projects that enable UK supply chain and manufacturing capability growth in power electronics, machines and drives.

The Advanced Propulsion Centre (APC_ joint venture between government and the automotive industry has a £1 billion budget to support projects at the later stages of technology development. APC released £89 million funding in October 2023, supporting 20 UK projects.

Local incentives and support are available to complement national support, as well as a comprehensive soft-landing package.