UK awards £28.6 million to battery projects, from EV recycling to storage for AI data centers

The UK government has awarded £28.6 million to 27 battery sector projects, from recycling worn-out electric-vehicle batteries to a water-based battery meant to help data centers run more AI servers. The Battery Innovation Programme, which Innovate UK runs on behalf of the Department for Business, Innovation, Science and Trade, announced the second-round winners of its innovation competition, along with three skills projects, on November 12, 2026.

Innovate UK said the competition targeted the supply and processing of battery materials, recycling, UK manufacturing and less dependence on supply chains abroad. The money is split three ways. Nine concept-development projects shared £18.74 million, 15 feasibility studies lasting six to 12 months shared £6.23 million, and three regional skills initiatives received £3.6 million.

The three strands add up to £28.57 million by our arithmetic; Innovate UK gives the total as £28.6 million.

Batteries for AI data centers

Two of the feasibility studies are aimed at data centers. Superdielectrics Group and Sytronix were awarded almost £500,000 to test a water-based battery designed to take in and give out power fast, which Innovate UK says could let data centers add AI servers without putting more load on local grids. If the test succeeds, it says, operators could get more out of the grid connections they already have and grow before local supply is upgraded. The second, led by RE24 Ltd, covers a digital twin and performance optimization for stationary battery storage at data centers, according to its project title.

A science advice note from the Government Office for Science, published the same day and drawn from a February 20, 2026, roundtable chaired by the government's chief scientific adviser, says delays in getting a grid connection are a key factor in where data centers are built and risk undermining the UK's digital growth goals. The note gives the participants' views and is not government policy. The government has also set conditions for fast-tracked AI data centers, as we reported in October.

Recycling and materials

All nine of the larger concept-development projects deal with battery materials, recycling or reuse, judging by the project titles Innovate UK published. Lithium Battery Recyclers Ltd received more than £1.2 million to scale up a University of Leicester process that pulls apart battery materials such as graphite using water with a small amount of vegetable oil, instead of acid leaching or hazardous chemicals. The work will take place at a pilot plant in Widnes, Cheshire. Hyperbat, now part of Unipart Manufacturing Group, received more than £2.4 million to develop a process for assessing electric-vehicle batteries that are damaged or underperforming and deciding whether each should be repaired, reused, moved into energy storage or recycled safely. Innovate UK says the aim is to cut the number of vehicles written off.

The feasibility studies range more widely. Among them, LanthaGen Bio is working on engineered proteins to recover rare earths from the liquid left after processing spent batteries, Entropyst on graphite anodes made from industrial waste gas, and Stortera on an “AI-optimised twin” for low-cost, multi-day storage in aqueous aluminum-ion batteries, in the words of its project title.

The policy behind it

Blair McDougall, Minister for Reindustrialisation, linked the awards to the government's Modern Industrial Strategy and said the money gives Britain's battery manufacturers support “to power the industries of the future.” Valentina Gentili, the program's director, said its investment would help build capabilities that will “further strengthen UK sovereign capability.”

In April 2026, the government said it was putting £47 million into battery R&D projects through the program, alongside a £380 million grant to help Agratas build one of Europe's largest gigafactories in Somerset. One of the new skills courses, at University Centre Somerset, is linked to opportunities at that gigafactory near Bridgwater, according to Innovate UK.