Tech billionaires back north-east England as green electric hub
Californian developer backed by Bill Gates and Jeff Bezos funds transport innovation in former industrial region
When a California-based developer of sustainable technology, backed by billionaires Bill Gates and Jeff Bezos, searched the world for companies to turn its electric motors into a product that could power the green revolution, it found them a few miles apart in north-east England.
The £100m invested by Turntide Technologies into three businesses near Newcastle offers the prospect of thousands of new, skilled jobs in a region still struggling to recover from the demise of sectors such as coal mining, steel and shipbuilding, with their links to the industrial revolution powered by fossil fuels.
For Matt Boyle, a local entrepreneur who brokered the three deals, including the acquisition of BorgWarner Gateshead, which he used to run, the arrival of the US tech company represents a chance to cement the region’s place as a UK hub of green electrical innovation.
BorgWarner Gateshead, formerly Sevcon, makes control systems for electric drivetrains that began in the 1960s with milk floats. Boyle, now managing director of newly created Turntide Transport, said the UK subsidiary will bring together the three acquisitions and plans to target the “long tail of electrification” in areas of transport facing big technological challenges to going green.
The goal is to build a global business to supply Turntide’s efficient electric motor technology, already used to power heating and air-conditioning units in buildings, to the aerospace, shipping, rail and industrial vehicle sectors.
“All these need to be electrified or policymakers are never going to meet their goals,” said Boyle. “The market is going to be worth trillions.”
The region already has a head start on the rest of the UK in green electrical technology. In 2013, Nissan started building its Leaf, the first mass market electric car, at its factory in nearby Sunderland.
Then in July, the Japanese company announced plans to build a new electric model there along with the UK’s first large-scale battery factory in a deal with Envision, which already supplies the Leaf battery from a smaller site in Sunderland. The £1bn investment will create in total about 6,000 jobs to add to the 46,000 already supported by the car plant.
In December 2020, start-up Britishvolt unveiled plans for a third plant in the region: a £2.6bn factory in Blyth, 13 miles north of Newcastle, employing 3,000 workers.
“We have the controls, the batteries, the machines, the drive systems and the cars all in the region. No one else has got that within a few miles of each other,” said Professor Colin Herron of Newcastle University, a former Nissan executive who heads the Zero Carbon Futures consultancy.
One of the main reasons for battery manufacturers to choose north-east England is the plentiful supply of green power, according to Herron. Blyth is the landing point of a 1,400MW cable providing hydroelectric power from Norway. Battery production is energy intensive and companies need low carbon energy sources to comply with increasingly strict emissions standards.
Brexit has also played a role, he said. Rules of origin under the trade deal with the EU effectively means the battery and powertrain of any British electric vehicle sold to the trade bloc must be built in the UK.
With the UK banning petrol and diesel vehicle sales from 2030, the car industry is moving fast to electrify and other engineering sectors are following.
The government has so far backed the expansion of the Nissan plant in Sunderland with £100m of support but Boyle argued ministers should provide incentives to suppliers to ensure the technology developed in the UK is also manufactured here.
The US tech company has raised $400m to date from backers, including Gates’ Breakthrough Energy Ventures, Bezos’ Amazon, BMW and the Canadian Pension Plan Investment Board.
“There is not enough government support . . . The UK has the opportunity to manufacture what it develops,” Boyle said.
The government pointed to its support for the new Envision battery factory and said it had recently announced a £500m commitment to building an electric vehicle supply chain. “We are backing Britain’s automotive sector through a major investment programme to electrify our supply chain, create jobs and secure a competitive future for the sector,” it added.
Turntide’s focus so far has been its Smart Motor System, an electric motor that could ultimate cut energy consumed by existing rival designs by almost two-thirds. It also avoids the use of expensive rare earth minerals used in most electric drivetrains.
Its three acquisitions in north-east England are designed to expand its expertise in the transport sector. Sunderland-based Hyperdrive uses the same power cells fitted in the Leaf but assembles them into bigger battery-packs to power heavy lift machinery, running its proprietary software.
Chris Pennison, Hyperdrive’s chief executive, said Turntide’s ownership would further boost the business after turnover had doubled during the pandemic to hit £30m this year. “I have 20 engineers here, we now have 100 across the group I can call on.”
AVID Technology, Turntide’s most recent purchase in June, designs and manufactures electric powertrain systems for trucks, buses and high-performance vehicles. It is based in Cramlington, between Newcastle and Blyth.
The three companies supply a range of customers, including Hitachi Rail, Aston Martin and Volkswagen’s MAN trucks division.
Success will in part depend on whether the region can transition from its heavy industrial past to the green technologies of the future. Helen Golightly, chief executive of the North East Local Enterprise Partnership, the regional economic development body, said it was gearing up to provide a trained workforce.
“There is a great skills base. We need to ensure that the offshore oil worker can retrain to work in low carbon industries. And we are working with colleges to ensure they are providing the right courses for young people.”