Part of the Northvolt energy block could be allocated to others: Quebec minister

Even though Northvolt is experiencing financial difficulty, the Legault government is convinced that the Montérégie battery plant will go ahead, but it is opening the door to the possibility of redistributing part of the promised energy supply block to other companies.

New Quebec Economy and Energy Minister Christine Fréchette hinted at this on Tuesday evening after a meeting with Paolo Cerruti, the head of the Swedish company in North America, at a time when electric vehicle and battery manufacturers are going through turbulence.

Northvolt has had to lay off 1,600 workers in Sweden, one-fifth of its workforce, but the planned plant in Quebec will be built according to the original plans and with a revised timetable, according to the minister.

Is Northvolt at risk of bankruptcy, as Liberal MNA Marwah Rizqy suggested, citing Bloomberg?

Fréchette said in a news scrum in the parliamentary press gallery that "they are not in that scenario at all. They are redefining the timetable for Quebec."

She said that "they are just as determined to go ahead with the project."

In Sweden, there has been a "refocusing" of activities, but in Quebec, "this is not the premise"'with which Northvolt's managers are working, said the minister.

"The plan is still to build facilities where the cell and cathode-making and recycling activities will take place as planned," she continued.

The CAQ government is currently under attack from all sides, not only from the opposition parties but also from businesses, for granting a 354-megawatt block of electricity to Northvolt without a deadline in an energy shortage situation when Hydro-Québec cannot supply already established businesses that are demanding additional electricity supply for their decarbonization and expansion.

• READ MORE: Here's where Quebec is investing billions of dollars in the EV battery revolution

But on Tuesday evening, the minister opened the door to redistributing part of Northvolt's energy block to other companies until the plant is fully operational.

‘'We're not there yet,’' she added.

The company is in the process of "rescheduling" its timetable while construction work on the plant continues apace in Saint-Basile-le-Grand and McMasterville.

Fréchette's predecessor, Pierre Fitzgibbon, had already estimated that the project, scheduled for completion in 2028, was 12 to 18 months behind schedule.

$300 million

On Tuesday, the opposition parties did not share Fréchette's optimism about the outcome of the Northvolt project.

In particular, they criticized the fact that the government potentially has to contribute a further $300 million to the venture on top of the $700 million already agreed upon, giving a total of $1 billion for a total project estimated at $7 billion - of which Ottawa is also contributing $1.37 billion.

In fact, Quebec has already granted $240 million for the purchase of the land as a guarantee, in addition to the $270 million invested in the financing of the parent company in Sweden and the $200 million from the Caisse de dépôt et placement (CDPQ).

A further $300 million is to be paid in debentures, i.e. a long-term unsecured loan subject to certain conditions.

During question period, PQ MNA Pascal Paradis called for the terms of the debentures to be made public.

Legault mentioned two of the conditions that have meant that this envelope has not yet been granted.

The first was that the financing for the project had been completed, ‘'which is obviously not the case,’' he said, and the second was that the plant was under construction.

However, the site has not yet reached this stage.

Québec solidaire (QS) tabled a motion calling on the government not to invest a penny more in the project, but the government refused to give its consent for the motion to be debated.

In addition, National Assembly president Nathalie Roy rejected the request for an emergency debate on Northvolt tabled by the Parti Québécois (PQ).

In her decision, Roy argued that the request did not meet the criteria for an emergency debate.

The loss of 1,600 jobs in Sweden could not be considered an "acute and sudden emergency crisis," she explained.

This report by The Canadian Press was first published in French on Sept. 25, 2024.