The agency of regional actors will enhance the accessibility to the battery industrial sites and strengthen the supply value chain, thus making investing in the region more attractive and sustainable.
The Nordic battery context
The battery industry is regarded as a new green path. The industry is emerging in the Nordic battery belt comprising the regions of Central Ostrobothnia and Ostrobothnia in Finland, Västerbotten County in Sweden, and Nordland County in Norway. Different contextual factors support its development, such as the availability of raw materials, strong institutional collaboration for knowledge co-creation, relevant skills from the existing energy technology industry and the numerous tertiary institutions. The government is actively involved in the development process by providing favourable conditions that serve as an incentive for investors, and this constitutes an integral support factor.
The Nordic battery industry is envisaged to bring numerous socio-economic and environmental benefits, albeit with many developmental challenges that are not peculiar to the Nordic region but global within the industry.
— external dependency could erode the region’s desired self-sufficiency —
The first category of these challenges is exogenous, e.g., geopolitical, in terms of external reliance on the supply of critical materials in the supply value chain. Such external dependency could erode the region’s desired self-sufficiency, especially from the Asian market. Other challenges that actors in the industry are paying closer attention to include ethical concerns, especially regarding child labour exploitation in mining critical materials.
The second challenge is endogenous, e.g. overcoming the envisaged connectivity challenges to optimise the supply value chain and improve access to the international market. The agency of regional actors is paramount for mitigating these challenges by strengthening the supply value chain via improved access to the battery industrial sites in the region.
Towards an improved understanding of agency
The emerging phase of the battery industry means that the exercise of actors’ agency will be increasingly imperative to ensure a thriving and sustainable industry. However, how actors’ agency can be enhanced remains underexplored. Recent studies have provided an overview of the Nordic battery industry, mainly focusing on how some regional actors have begun to exercise their agency towards solving the envisaged challenge to the industry’s supply value chain. By participating in new networks such as the ‘Nordic battery belt’ (also conceptualised as a space for institutional cooperation), these actors advance connectivity and access to the battery industry. They develop logistical strategies and inventory to improve transport connectivity in the region.
This article extends the focus on agency by elaborating on why the agency of regional actors is imperative towards optimising access to the location site of the Nordic battery industry. By so doing, the article advances the understanding of agency’s role in regional energy transitions. Before explicating this, it is essential to describe the nature and determinants of the location of battery industries and then provide the possible ways actors’ agency becomes pertinent towards enhancing access.
The determining factor in the location decision
The battery industry is cost-intensive, thus requiring careful consideration when selecting the site. A well-thought-out strategy could invariably lead to profitable enterprise due to improved access to raw materials and markets. Hence, external investors are critical about site selection as it could make or mar their investment. There are many factors that investors and other stakeholders consider in the location selection. These include the cost consideration for manufacturing in a particular area, the availability of skills, knowledge, and the form of the energy mix, usually clean energy, that can support the operation of the industry.
Factors that influence the location selection of the battery industry. Photo: Ejike Okonkwo
The role of actor’s agency in optimising access to the industrial sites
How viable the battery industry turns out would be largely contingent on accessibility to the industrial sites. The location of the industry remains one of the factors that will continuously shape the industry. The Nordic battery industrial areas are mainly situated near the coast and seaport in the outskirts of urban areas. Thus, improved access means a more robust and sustainable supply value chain as goods and services can seamlessly be transported from and to different locations. Therefore, actors’ agency provide a proactive solution for optimising the benefits of the industry’s location.
For instance, while private investors greatly influence the location choice for large‐scale battery manufacturing plants, regional actors exercise their agency in creating a favourable opportunity space (improved transport connectivity) for investors. Although foreign direct investors are the critical determinant of location selection, the agency of regional actors will have the balancing effect of self-guarding the interests of all the stakeholders. Regional actors create an equilibrium between investors’ interests and those of the societal stakeholders. By so doing, actors, through their policy decisions, ensure that the final location does not adversely impact the local communities.
Ultimately, a case of low involvement of actors in improving access to the industrial sites could be less attractive to potential investors —
Some consideration involves guaranteeing that the distance of the industrial area and the production process are carefully organised to mitigate the effect of noise and industrial wastes on the communities. The Giga Vaasa initiative is an example of how regional actors exercise their agency in deciding the location choice for the battery cluster, shaping the degree of accessibility to the factories. Furthermore, regional actors are unrelentingly seeking ways to continuously create alluring conditions for investors. They are involved in developing the national battery strategies, a policy document highlighting the accessibility challenges and incentivising policies for improving them.
Ultimately, a case of low involvement of actors in improving access to the industrial sites could be less attractive to potential investors because the battery enterprise would be more expensive for the supply of materials, products, services and the mobility of personnel within the region.
While investors are not seeking a perfect contextual environment before embarking on battery development, they are looking for contexts where regional actors strive towards strengthening the accessibility to the industrial sites for an efficient and sustainable supply value chain. Indeed, the Nordic region is a good example where the agency of regional actors remains a necessity towards achieving sustainable battery production by optimising access to the production sites.
Future studies could turn the searchlight towards uncovering and deepening the understanding that transcends agency-access-related focus and navigating other agency dimensions that foster the decarbonisation process. For example, it could build on existing research that examines the role of actors in knowledge co-creation for accelerating innovation towards a battery-based technological transition within the Nordic context.
Asaba, M. C., Duffner, F., Frieden, F., Leker, J., & von Delft, S. (2022). Location choice for large‐scale battery manufacturing plants: Exploring the role of clean energy, costs, and knowledge on location decisions in Europe. Journal of Industrial Ecology, 26(4), 1514-1527. https://doi.org/10.1111/jiec.13292
Chen, L., Miller, S. A., & Ellis, B. R. (2017). Comparative human toxicity impact of electricity produced from shale gas and coal. Environmental Science & Technology, 51(21), 13018-13027.
Duffner, F., Kraetzig, O., & Leker, J. (2020). Battery plant location considering the balance between knowledge and cost: A comparative study of the EU-28 countries. Journal of Cleaner Production, 264, 121428. https://doi.org/10.1016/j.jclepro.2020.121428
Grillitsch, M., and Sotarauta, M. 2019. Trinity of change agency, regional development paths and opportunity spaces. Progress in Human Geography 44 (4): 704–23. doi:10.1177/ 0309132519853870.
Li, X., Quan, R., Stoian, M. C., & Azar, G. (2018). Do MNEs from developed and emerging economies differ in their location choice of FDI? A 36-year review. InternationalBusinessReview,27(5),1089–1103 https://doi.org/10.1016/j.ibusrev.2018.03.012
Okonkwo, E. (2023). Technological Transition to Electric Aviation in the Kvarken Region: A Review of the FAIR Reports (Finding Innovations to Accelerate the Implementation of Electric Regional Aviation). Journal of Geography, Politics and Society, 13(1), 42-54. https://doi.org/10.26881/jpgs.2023.1.05
Prehoda, E. W., & Pearce, J. M. (2017). Potential lives saved by replacing coal with solar photovoltaic electricity production in the US. Renewable and Sustainable Energy Reviews, 80, 710-715. https://doi.org/10.1016/j.rser.2017.05.119
Sovacool, B. K. (2021). When subterranean slavery supports sustainability transitions? Power, patriarchy, and child labor in artisanal Congolese cobalt mining. The Extractive Industries and Society, 8(1), 271-293.
Viegand, J. (2022). Batteries in the Nordics: Changing for Circularity. Nordic Council of Ministers.
Ejike Okonkwo
Okonkwo (MIR, MEES) is a Doctoral researcher at the University of Vaasa, Finland. His research focuses on the role of regional actors in the development process of the Nordic battery industry. Before his doctoral studies, he researched Climate Change Mitigation and the Corporate Social Responsibility of the Oil and Gas industry.
Erkkilä is the CEO of Ostrobothnia Chamber of Commerce, PhD in leadership and organisations and MSc in geography. The West Coast in Finland is going through an enormous and historical investment wave in green transition. First investments in battery cluster have already started, and more is about to come. She monitors the situation and provides information about investments and their needs to many decision-making tables.
The importance of regional team for a battery industry location
Ejike Okonkwo’s article explains why the agency of regional actors is crucial for optimizing access to the location site of the Nordic battery industry. In doing so, the article enhances the understanding of the role of regional agency in the vast network of investments and their playground.
Terminology matters
In the article, the author highlights the significance of the network of regional actors in attracting battery investments to the Nordic region. The term ’agency’ may convey a static and even authoritative image. However, in this context of agency, it is more about a multidisciplinary ‘team’ and an extensive network of actors in the surrounding environment. While it may seem like a matter of semantics, communication also plays a crucial role in shaping the image of the region. It is essential that the terminology used reflects also the language used by the actors themselves.
Role as a mediator and dialogue
In the Finnish context, it is important to also highlight and remember the crucial role and responsibility of Business Finland in the Investment in operation. This expertise and resource utilization for the benefit of regions are not adequately emphasized in the article. Regionally, this is important as we are a globally small country that cannot afford to disperse resources.
However, Okonkwo brings up an important perspective that regional actors are involved in developing the national battery strategies, a policy document highlighting accessibility challenges and incentivizing policies for their improvement. At this point, regional and national collaboration and dialogue are appropriately emphasized.
Another crucial aspect is the relationship and role of the regional team with the local community. Open and regular dialogue can also prevent the formation of unnecessary prejudices, which may sometimes lead to futile complaint processes. In this regard, the regional team plays a special intermediary role in deepening the dialogue between potential investments and local communities.
Location, location, location
When making investment decisions, investors often begin with a comprehensive set of criteria, selecting potential candidates to the long list. Through subsequent stages of evaluation, this long list is refined into a short list, and finally to the stage where a location decision is being done.
These factors encompass the cost considerations for manufacturing in a specific area, the availability of skills and knowledge, logistical facilities and connections as well as the nature of the energy mix—typically favouring clean energy—that can sustain industry operations. Consequently, it can be affirmed that the importance of location – often expressed as ’location, location, location’ – cannot be underscored sufficiently.
Specific characteristics of battery value chain?
The author could have further explored the specific features or considerations involved in building agency within a sustainable battery value chain. Does trust, for instance, play a different role compared to traditional industrial investments? Is there a distinctive role for communication with local communities, investors, or the public in this context?
The agency of regional actors will enhance the accessibility to the battery industrial sites and strengthen the supply value chain, thus making investing in the region more attractive and sustainable.
The Nordic battery context
The battery industry is regarded as a new green path. The industry is emerging in the Nordic battery belt comprising the regions of Central Ostrobothnia and Ostrobothnia in Finland, Västerbotten County in Sweden, and Nordland County in Norway. Different contextual factors support its development, such as the availability of raw materials, strong institutional collaboration for knowledge co-creation, relevant skills from the existing energy technology industry and the numerous tertiary institutions. The government is actively involved in the development process by providing favourable conditions that serve as an incentive for investors, and this constitutes an integral support factor.
The Nordic battery industry is envisaged to bring numerous socio-economic and environmental benefits, albeit with many developmental challenges that are not peculiar to the Nordic region but global within the industry.
The first category of these challenges is exogenous, e.g., geopolitical, in terms of external reliance on the supply of critical materials in the supply value chain. Such external dependency could erode the region’s desired self-sufficiency, especially from the Asian market. Other challenges that actors in the industry are paying closer attention to include ethical concerns, especially regarding child labour exploitation in mining critical materials.
The second challenge is endogenous, e.g. overcoming the envisaged connectivity challenges to optimise the supply value chain and improve access to the international market. The agency of regional actors is paramount for mitigating these challenges by strengthening the supply value chain via improved access to the battery industrial sites in the region.
Towards an improved understanding of agency
The emerging phase of the battery industry means that the exercise of actors’ agency will be increasingly imperative to ensure a thriving and sustainable industry. However, how actors’ agency can be enhanced remains underexplored. Recent studies have provided an overview of the Nordic battery industry, mainly focusing on how some regional actors have begun to exercise their agency towards solving the envisaged challenge to the industry’s supply value chain. By participating in new networks such as the ‘Nordic battery belt’ (also conceptualised as a space for institutional cooperation), these actors advance connectivity and access to the battery industry. They develop logistical strategies and inventory to improve transport connectivity in the region.
This article extends the focus on agency by elaborating on why the agency of regional actors is imperative towards optimising access to the location site of the Nordic battery industry. By so doing, the article advances the understanding of agency’s role in regional energy transitions. Before explicating this, it is essential to describe the nature and determinants of the location of battery industries and then provide the possible ways actors’ agency becomes pertinent towards enhancing access.
The determining factor in the location decision
The battery industry is cost-intensive, thus requiring careful consideration when selecting the site. A well-thought-out strategy could invariably lead to profitable enterprise due to improved access to raw materials and markets. Hence, external investors are critical about site selection as it could make or mar their investment. There are many factors that investors and other stakeholders consider in the location selection. These include the cost consideration for manufacturing in a particular area, the availability of skills, knowledge, and the form of the energy mix, usually clean energy, that can support the operation of the industry.
The role of actor’s agency in optimising access to the industrial sites
How viable the battery industry turns out would be largely contingent on accessibility to the industrial sites. The location of the industry remains one of the factors that will continuously shape the industry. The Nordic battery industrial areas are mainly situated near the coast and seaport in the outskirts of urban areas. Thus, improved access means a more robust and sustainable supply value chain as goods and services can seamlessly be transported from and to different locations. Therefore, actors’ agency provide a proactive solution for optimising the benefits of the industry’s location.
For instance, while private investors greatly influence the location choice for large‐scale battery manufacturing plants, regional actors exercise their agency in creating a favourable opportunity space (improved transport connectivity) for investors. Although foreign direct investors are the critical determinant of location selection, the agency of regional actors will have the balancing effect of self-guarding the interests of all the stakeholders. Regional actors create an equilibrium between investors’ interests and those of the societal stakeholders. By so doing, actors, through their policy decisions, ensure that the final location does not adversely impact the local communities.
Some consideration involves guaranteeing that the distance of the industrial area and the production process are carefully organised to mitigate the effect of noise and industrial wastes on the communities. The Giga Vaasa initiative is an example of how regional actors exercise their agency in deciding the location choice for the battery cluster, shaping the degree of accessibility to the factories. Furthermore, regional actors are unrelentingly seeking ways to continuously create alluring conditions for investors. They are involved in developing the national battery strategies, a policy document highlighting the accessibility challenges and incentivising policies for improving them.
Ultimately, a case of low involvement of actors in improving access to the industrial sites could be less attractive to potential investors because the battery enterprise would be more expensive for the supply of materials, products, services and the mobility of personnel within the region.
Thinking ahead – what does the future hold?
While investors are not seeking a perfect contextual environment before embarking on battery development, they are looking for contexts where regional actors strive towards strengthening the accessibility to the industrial sites for an efficient and sustainable supply value chain. Indeed, the Nordic region is a good example where the agency of regional actors remains a necessity towards achieving sustainable battery production by optimising access to the production sites.
Future studies could turn the searchlight towards uncovering and deepening the understanding that transcends agency-access-related focus and navigating other agency dimensions that foster the decarbonisation process. For example, it could build on existing research that examines the role of actors in knowledge co-creation for accelerating innovation towards a battery-based technological transition within the Nordic context.
EJIKE OKONKWO
Header photo: Pixabay
This Research Debate is based on the research article in Fennia: Okonkwo, E. 2022: An overview of the Nordic Battery Belt: an emerging network for cooperation within the Nordic battery cluster. Fennia – International Journal of Geography, 200(1), 52–67.
My appreciation to the Foundation for Economic Education (Liikesivistysrahasto).
References
Adolfsson-Tallqvist, J., Ek, S., Forstén, E., Heino, M., Holm, E., Jonsson, H., … & Roschier, S. (2019). Batteries from Finland. https://www.businessfinland.fi/globalassets/finnish-customers/02-build-your-network/bioeconomy–cleantech/batteries-from-finland/batteries-from-finland-report_final_62019.pdf
Asaba, M. C., Duffner, F., Frieden, F., Leker, J., & von Delft, S. (2022). Location choice for large‐scale battery manufacturing plants: Exploring the role of clean energy, costs, and knowledge on location decisions in Europe. Journal of Industrial Ecology, 26(4), 1514-1527. https://doi.org/10.1111/jiec.13292
Battery Norway (2023) Report on the Nordic Battery Value Chain. https://batterynorway.no/report-on-the-nordic-battery-chain. 19.05. 2023.
Chen, L., Miller, S. A., & Ellis, B. R. (2017). Comparative human toxicity impact of electricity produced from shale gas and coal. Environmental Science & Technology, 51(21), 13018-13027.
Duffner, F., Kraetzig, O., & Leker, J. (2020). Battery plant location considering the balance between knowledge and cost: A comparative study of the EU-28 countries. Journal of Cleaner Production, 264, 121428. https://doi.org/10.1016/j.jclepro.2020.121428
GigaVaasa (2022). The giga-size industrial zone is ready. https://www.gigavaasa.fi/giga-area 01.09.2023
Grillitsch, M., and Sotarauta, M. 2019. Trinity of change agency, regional development paths and opportunity spaces. Progress in Human Geography 44 (4): 704–23. doi:10.1177/ 0309132519853870.
IRENA (2023), Geopolitics of the energy transition: Critical materials, International Renewable Energy Agency, Abu Dhabi. https://www.irena.org/Publications/2023/Jul/Geopolitics-of-the-Energy-Transition-Critical-Materials.
Jain, N.K., Kothari, T.,&Kumar, V.(2016). Location choice research: Proposing new agenda. Management International Review,56(3),303–324 https://link.springer.com/article/10.1007/s11575-015-0271-6
Li, X., Quan, R., Stoian, M. C., & Azar, G. (2018). Do MNEs from developed and emerging economies differ in their location choice of FDI? A 36-year review. InternationalBusinessReview,27(5),1089–1103 https://doi.org/10.1016/j.ibusrev.2018.03.012
Löfmarck, A., Lepola, A., Martinsen, K. G., Utriainen, M., Ilomäki, R. & Rintamäki, S. (2022) Nordic Battery Belt logistics local and regional supply chains and logistics solutions. https://www.kvarken.org/wp-content/uploads/2022/09/New_Report_Nordic_-Battery_-Belt_Logistics_MASTER_31-5-2022.pdf. 23.08. 2023.
Ministry of Economic Affairs and Employment of Finland (2021) National Battery Strategy 2025 – Executive Summary. https://julkaisut.valtioneuvosto.fi/handle/10024/162685. 20.08.2023.
Okonkwo, E. (2023). Technological Transition to Electric Aviation in the Kvarken Region: A Review of the FAIR Reports (Finding Innovations to Accelerate the Implementation of Electric Regional Aviation). Journal of Geography, Politics and Society, 13(1), 42-54. https://doi.org/10.26881/jpgs.2023.1.05
Prehoda, E. W., & Pearce, J. M. (2017). Potential lives saved by replacing coal with solar photovoltaic electricity production in the US. Renewable and Sustainable Energy Reviews, 80, 710-715. https://doi.org/10.1016/j.rser.2017.05.119
Sovacool, B. K. (2021). When subterranean slavery supports sustainability transitions? Power, patriarchy, and child labor in artisanal Congolese cobalt mining. The Extractive Industries and Society, 8(1), 271-293.
Viegand, J. (2022). Batteries in the Nordics: Changing for Circularity. Nordic Council of Ministers.
Ejike Okonkwo
Okonkwo (MIR, MEES) is a Doctoral researcher at the University of Vaasa, Finland. His research focuses on the role of regional actors in the development process of the Nordic battery industry. Before his doctoral studies, he researched Climate Change Mitigation and the Corporate Social Responsibility of the Oil and Gas industry.
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Paula Erkkilä
Erkkilä is the CEO of Ostrobothnia Chamber of Commerce, PhD in leadership and organisations and MSc in geography. The West Coast in Finland is going through an enormous and historical investment wave in green transition. First investments in battery cluster have already started, and more is about to come. She monitors the situation and provides information about investments and their needs to many decision-making tables.
The importance of regional team for a battery industry location
Ejike Okonkwo’s article explains why the agency of regional actors is crucial for optimizing access to the location site of the Nordic battery industry. In doing so, the article enhances the understanding of the role of regional agency in the vast network of investments and their playground.
Terminology matters
In the article, the author highlights the significance of the network of regional actors in attracting battery investments to the Nordic region. The term ’agency’ may convey a static and even authoritative image. However, in this context of agency, it is more about a multidisciplinary ‘team’ and an extensive network of actors in the surrounding environment. While it may seem like a matter of semantics, communication also plays a crucial role in shaping the image of the region. It is essential that the terminology used reflects also the language used by the actors themselves.
Role as a mediator and dialogue
In the Finnish context, it is important to also highlight and remember the crucial role and responsibility of Business Finland in the Investment in operation. This expertise and resource utilization for the benefit of regions are not adequately emphasized in the article. Regionally, this is important as we are a globally small country that cannot afford to disperse resources.
However, Okonkwo brings up an important perspective that regional actors are involved in developing the national battery strategies, a policy document highlighting accessibility challenges and incentivizing policies for their improvement. At this point, regional and national collaboration and dialogue are appropriately emphasized.
Another crucial aspect is the relationship and role of the regional team with the local community. Open and regular dialogue can also prevent the formation of unnecessary prejudices, which may sometimes lead to futile complaint processes. In this regard, the regional team plays a special intermediary role in deepening the dialogue between potential investments and local communities.
Location, location, location
When making investment decisions, investors often begin with a comprehensive set of criteria, selecting potential candidates to the long list. Through subsequent stages of evaluation, this long list is refined into a short list, and finally to the stage where a location decision is being done.
These factors encompass the cost considerations for manufacturing in a specific area, the availability of skills and knowledge, logistical facilities and connections as well as the nature of the energy mix—typically favouring clean energy—that can sustain industry operations. Consequently, it can be affirmed that the importance of location – often expressed as ’location, location, location’ – cannot be underscored sufficiently.
Specific characteristics of battery value chain?
The author could have further explored the specific features or considerations involved in building agency within a sustainable battery value chain. Does trust, for instance, play a different role compared to traditional industrial investments? Is there a distinctive role for communication with local communities, investors, or the public in this context?
PAULA ERKKILÄ
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Regional actors’ agency for optimising access to the Nordic battery industrial sites
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