What’s stopping EV second-life batteries from improving grid performance today?

Lack of standardization is one of the key barriers to use second-life batteries to improve grid reliability.

Electric vehicle (EV) batteries are typically designed for a decade of usage. Then they lose their juice to power your EV. The growth of intermittent renewable energy is increasing the importance of energy storage. So is it economical to use retired EV batteries at a mass-scale for grid balancing needs today?

Reuse

Utilities can benefit from reusing old EV batteries to:

• improve grid reliability.
• integrate renewables.
• charge EVs.

Second-life-battery supplies for stationary applications can exceed 200 gigawatt-hours by 2030.

“The cost gap between used and new batteries should remain meaningful to justify creating a second-life-batteries application at utility-scale.”

Pilot projects already exist, such as Nissan/EDF partnership to combine old Nissan Leaf batteries with EDF’s demand-side response.

Grid-scale projects to utilize second-life batteries worldwide. Source: Capgemini.

The battery has brutal life under the EV hood due to extreme functioning temperatures, hundreds of partial life cycles a year, and changing discharge rates. But the battery can feel better in second life because it’s used more gently (no rapid charging, less of complete charging, or full discharging). Professionally designed processes in the utility company adopt a careful approach to maximize battery longevity. Indeed it will be heaven after the death in the car.

Long way ahead

However, serious challenges hold utilities to bet on second-life-batteries today:

1. Batteries come in different shapes and forms. Second-life utility-scale adoption will become widespread when you have millions of EVs with the standard design, size, chemistry, and format. But in 2025, there will be 250 new EV models with batteries from more than 15 battery producers. Refurbishing complexity due to lack of standardization is a crucial barrier for utilities to jump into the second-life-batteries idea.
2. The biggest economic threat to storage is the future cost. Batteries are getting cheaper year after year. It isn’t easy to make long-term investment planning by TSOs and DSOs.

Battery storage cost evolution. Source: US Energy Information Administration.

So the cost gap between used and new batteries should remain meaningful to justify creating a second-life-batteries application at utility-scale. The current energy system was built around the idea that electricity can’t be stored economically. The issue is that the more you invest in energy storage, the more it becomes abundant. Once you have ample energy storage capacity, then you lose a business case and commercial value. I try to curb my enthusiasm before envisioning a utopian world where prices are flat, and volatility is gone, thanks to the ability to store all energy.

3. Reusing or even recycling is not happening on a mass scale because there is nothing to recycle or reuse. Because EV’s battery life is ten years and EV penetration is still low at present. We are talking about few decades of high EV penetration before there will be enough batteries to reuse and recycle at a mass scale. Today, probably no recycling center will buy dead batteries to recycle because it’s not economical.

Battery lifecycle. Source: McKinsey & Company.

Preparing for the future market

The second-life-batteries market promises to be a bonanza for the utility industry in the zero-carbon world. You can position better when the time comes by benchmarking best practices with top experts. Therefore, Prospero Events Group hosts the ‘’Utility-Scale Battery Storage’’ virtual conference on 10–11 June, 2021 with leading energy companies.

PS:

Recycling and reusing old EV batteries will become profitable with volume. It’s just too early now. Yet governments can start introducing incentives to recycling centers and utilities to build the infrastructure for battery recycling in a smaller volume.