SMART battery maker AMTE Power has underlined the value of its Caithness production facility as it plans to develop a “MegaFactory” in Dundee.

The company said it has made good progress in recent months with the work completed at Thurso allowing it to scale up the production of battery cells for customers. It said this work ultimately underpins preparations to invest in the planned Dundee production plant.

AMTE develops lithium-ion and sodium-ion batteries for use in energy storage facilities and electric vehicles. The company expects that the drive to electrify industries such as transportation, to help reduce fossil fuel use, will support strong demand for its products.

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Chief executive Alan Hollis said yesterday: “AMTE Power has a differentiated product range targeting identified underserved market segments in a structurally growing sector where demand for battery cells is incredibly strong.”

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He added: “Our pipeline of opportunities and strong technology base combined with our clear path to scale up leave us well placed for the future.”

In August last year AMTE announced that it had chosen Dundee as the preferred location for its planned MegaFactory, which it then expected to have ready within three years. The company forecast the facility would be capable of producing millions of batteries annually and generating an annual revenue stream of £200 million plus at full production.

It said then: “Due to the high value nature of AMTE Power’s products, a factory can be profitable at a smaller scale than the size of factories at multiple GWh size, benefiting from quicker commissioning time, more flexibility in location, less investment and a faster path to profitability.”

Hopes of the UK becoming a major force in the large scale battery manufacturing business dimmed when Britishvolt fell into administration recently. Britishvolt planned to build a £3.8billion plant in Blythe in north-east England.

AMTE Power employs around 40 people in Thurso. It listed on the Aim stock market in March 2021.

The company developed out of a lithium-ion battery operation formed by AEA Technology and two Japanese groups in the late 1990s. AEA Technology was spun out of the Atomic Energy Authority, which operated the Dounreay nuclear power plant in Caithness.