Work begins on $300M battery plant in Colleton County

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A “flagship” project that was announced in December has begun its construction phase.

Pomega Energy Storage Technologies, a subsidiary of Kontrolmatik Technologies, has begun work on its first U.S. lithium-ion battery manufacturing plant in South Carolina.

As construction of its lithium-ion battery factory in Ankara nears completion, Kontrolmatik Technologies announced in December its plan to build a 500,000-square-foot facility in Colleton County that is expected to begin production in mid-2024, create about 575 new jobs and have an initial production capacity of 3 gigawatt-hours (GWh), a Pomega news release stated.

The company plans to later increase capacity to 6 GWh and has secured land to expand operations. The company will invest $300 million in upfront capital expenditures in the new facility, according to the release.

Pomega will manufacture lithium iron phosphate cells designed exclusively for North American grid-scale energy storage applications, the release stated. In addition to manufacturing the battery cells at the South Carolina plant, Pomega will also manufacture and assemble turnkey battery energy storage systems (BESS), including modules, cabinets and final containerized energy storage solutions.

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When production begins at the company's South Carolina plant, Pomega will be one of the first and only U.S. manufacturers of lithium-ion batteries dedicated exclusively to the domestic utility-scale energy storage market, as opposed to the electric vehicle market where the vast majority of new investments are currently focused, the release stated.

This will place Pomega at the forefront of the energy storage revolution, allowing it not only to vertically integrate its own supply chain for BESS, but also to supply other domestic BESS integrators with these crucial lithium-ion batteries, the released stated. To this end, the company has already begun signing offtake agreements for its future capacity.

Gov. Henry McMaster was the guest of honor at a recent groundbreaking ceremony.

JLL, a professional services firm specializing in real estate and investment management, led the nationwide site selection process, the release stated. The JLL team analyzed more than 200 sites to identify locations that could be suitable for the plant.

As for the expected production tax credits (PTC) expected to be collected as per IRA, the calculation is based on an annual PTC of $35/KWh for battery cells and $45/KWh for modules, the release stated. Taking into account the company's projected product mix for a total of 3 GWh of PTC for 2024-2029, phasing out at 25% per year between 2030-32, the total estimated amount is $916 million.

"South Carolina was very clear in expressing their commitment to attracting top global technology and manufacturing companies to their state, and we are convinced that we will accomplish great things with the state’s support," Bahadir Yetki, CEO of Kontrolmatik Technologies and Pomega Energy Storage Technologies, said in the December announcement.