Saudi petrochemical giant Sabic has established a joint venture company – Advance Energy Storage System Investment Company -- to build one of the world’s biggest utility-scale battery factories.

Formed between Sabic unit Nusaned Investment and Schmid Group, the JV will focus on manufacturing and technology development of vanadium redox flow batteries (VRFB).

During the next two to three months, The Riwaq Industrial Development Company will also join the JV as `additional investors and shareholders’, Sabic said in a statement.

The proposed manufacturing facility and R&D centre will be developed in Dammam 3rd Industrial City and will have an annual production capacity of 3 GWh — making it among the biggest Flow Battery production facilities worldwide.

The facility will be built under a Build-to-Suit lease agreement with MODON. The project site has been identified and construction is expected to start in the first half of 2020 and it is expected to be in production in 2021, the statement said.

The JV aims to become a global technology leader and champion in the fast-growing utility-scale energy storage segment, supporting the Kingdom’s Vision 2030 economic diversification objectives. With R&D facilities in Germany and Saudi Arabia, the JV plans to set-up a GW scale manufacturing facility in the kingdom, expected to be in production in 2021. The JV’s strategy for developing value chain integrated production will allow it to achieve global cost leadership, it said.

Fuad Mosa, CEO of Nusaned Investment said: “The closing marks a milestone for Saudi Arabia in its quest to localise manufacturing for technologies in emerging industries”.

Christian Schmid, CEO of the Schmid Group said: “The new JV will aim to establish a leadership position in the rapidly developing energy storage market and both companies are fully committed to realising our joint vision for the project.”

According to Sabic, the new company will produce energy storage systems for use alongside utility-scale renewables projects, telecom towers, mining sites, remote cities and off-grid locations. The systems will be utilised for renewables capacity grid integration, establishment of mini grids at remote locations, optimisation of diesel generator capacity, and power back-up. The JV’s products will be offered under the Everflow brand.

The JV will directly contribute to the kingdom’s renewable ambitions. As per the new energy mix announced this year, Saudi Arabia aims to install 57.5 GW of renewable capacity by 2030. Utility-scale stationary energy storage systems will be critical to ensure that the new renewable capacity is stabilised and connected reliably to the grid. The kingdom could also leverage this technology in the upcoming mega-projects in the country.

Nusaned Investment is an investment company based in Riyadh with a mandate to increase local content in the kingdom. It invests alongside the investors in localising mature technologies and pioneering emerging technologies in the Kingdom. Nusaned Investment prioritizes economic development and strategic benefit for KSA, in addition to supporting and enabling the execution of KSA’s National Industrial Strategy (NIS).

Schmid Group is a technology group based in Freudenstadt, Germany. Founded in 1864, the group of companies employs more than 900 staff members worldwide and has technology centres and manufacturing sites in Germany, China, Turkey and the US in addition to several sales and service locations worldwide. The group focuses on developing customized equipment and process solutions for multiple industries including Electronics, Renewables and Energy Storage.

The Riwaq industrial development company is a developer and investor in industrial projects focusing on advance technologies in the sector of renewable energy , recycling , chemical & metal processing and mining projects.