When an electric vehicle (EV) comes off the road, what happens to the vehicle battery? The fate of the lithium ion batteries in electric vehicles is an important question for manufacturers, policy makers, and EV owners alike. Today, EVs are a still a small piece of the automotive market. Many of the batteries coming off the road are being used to evaluate a range of options for reuse and recycling. Before batteries are recycled to recover critical energy materials, reusing batteries in secondary applications is a promising strategy.
The economic potential for battery reuse, or second-life, could help to further decrease the upfront costs of EV batteries and increase the value of a used EV. Given the growing market for EVs, second-life batteries could also represent a market of low-cost storage for utilities and electricity consumers. But in order to enable widespread reuse of EV batteries, policy will play an important role in reducing barriers and ensuring responsible, equitable, and sustainable practices.
Today, I’ll be providing testimony to the California Lithium Battery Recycling Advisory Group regarding the reuse of EV batteries; the advisory group’s goal is to make recommendations to ensure 100% of EV batteries sold in California are reused or recycled. In this blog, I describe current industry landscape and explain the potential use cases for second-life EV batteries. This blog summarizes a brief white paper I helped developed with researchers from the University of California Davis for the group.
The market for second-life batteries
As the market for electric vehicles grows, so too will the supply of second-life batteries. Forecasts from academic studies and industry reports estimate a range of 112-275 GWh per year of second-life batteries becoming available by 2030 globally. For context, this is over 200 times total energy storage installed in the US in 2018 (~780 MWh).
California is the largest market for EVs in the US and by 2027, an estimated 45,000 EV batteries will be retired from the state. Assuming a conservative capacity for each of these batteries (25 kWh), this amounts to over 1 GWh/year of available storage in the Golden State.
Why EV batteries could be reused
After 8 to 12 years in a vehicle, the lithium batteries used in EVs are likely to retain more than two thirds of their usable energy storage. Depending on their condition, used EV batteries could deliver an additional 5-8 years of service in a secondary application.
The ability of a battery to retain and rapidly discharge electricity degrades with use and the passing of time. How many times a battery can deliver its stored energy at a specific rate is a function of degradation. Repeated utilization of the maximum storage potential of the battery, rapid charge and discharge cycles, and exposure to high temperatures are all likely to reduce battery performance. I break down battery degradation more in a previous blog post.
Given the light-duty cycles experienced by EV batteries, some battery modules with minimal degradation and absent defects or damage could likely be refurbished and reused directly as a replacement for the same model vehicle. Major automakers, including Nissan and Tesla, have offered rebuilt or refurbished battery packs for purchase or warranty replacement of original battery packs in EVs.
The value of used energy storage
The economics of second-life battery storage also depend on the cost of the repurposed system competing with new battery storage. To be used as stationary storage, used batteries must undergo several processes that are currently costly and time-intensive. Each pack must be tested to determine the remaining state of health of battery, as it will vary for each retired system depending on factors that range from climate to individual driving behavior. The batteries must then be fully discharged, reconfigured to meet the energy demands of their new application; in many cases, packs are disassembled before modules are tested, equipped with a new battery management system (BMS), and re-packaged.
Depending on the ownership model and the upfront cost of a second-life battery, estimates of the total cost of a second-life battery range from $40-160/kWh. This compares with new EV battery pack costs of $157/kWh at the end of 2019. The National Renewable Energy Laboratory (NREL) has also created a publicly available battery second-use repurposing calculator that accounts for factors such as labor costs, warranty, and initial battery size and cost. The figure below illustrates the potential cost structure of a repurposed battery in a second-life application where the buying price is the maximum value paid for the used battery. If this value could be passed through to the original owner, it could help to defray the cost of an electric vehicle.
Comparing new and repurposed EV battery pack costs
Most applications of distributed energy storage have considerable downtime where batteries are not being cycled. Therefore, second-life batteries offer the greatest economic benefit when battery systems provide multiple services at the same time. Bundling services together to improve the economics of energy storage is referred to as value stacking.
For example, a consumer customer might install so-called behind-the-meter storage primarily to reduce electricity costs by avoiding demand charges (i.e. additional electricity costs related to high loads). The customer might also value resilience in a power outage. Both behind and in front of the meter, distributed storage can provide a range of services for electric utilities including reducing the need to build new power plants or leveling out large changes in electricity supply or demand. A key challenge for battery storage (new or used) in a commercial market is how to capture each of these value streams.
A major barrier will be developing fair compensation for the enhanced ability of batteries to perform certain services within these storage markets. On top of this, the value of the service provided by these batteries must be thoroughly quantified to reduce uncertainty.
Customer energy management
There are a variety of options ‘behind the meter’ for customers to deploy energy storage to reduce energy costs and improve system resilience.
Time of use rate (TOU) rate structures encourage customers to shift their energy use to off-peak hours by charging higher rates for usage during peak hours. Capacity bidding into demand response is another mechanism to reward commercial customers for reducing load for a short duration. The implementation of storage in these cases is to charge when electricity is cheaper, then discharge during peak hours when it is advantageous to reduce customer load (this is known as “peak shaving”).
As TOU rates trend towards evening hours, utilizing second-life batteries in behind-the-meter load shifting applications provides an environmental benefit as well, since they charge from cleaner electricity during the day then displace demand for energy that would otherwise be supplied by natural gas peaker plants.
Battery storage can also be used to directly balance the intermittency of wind and solar generation. Storage enables customers to take advantage of times when onsite generation exceeds demand; energy can be stored, then discharged to fill in the “lull” periods. On-site storage could also provide a greater value than net-metering for some types of private systems.
Utility scale services
There are a number of services that distributed energy storage an provide for electric utilities. As mentioned previously, a key barrier for second-life EV batteries and distributed energy storage more broadly is the ability to capture these different value streams. There are four general types of grid services storage can provide:
- Frequency regulation – Broadly characterizes the need for the grid to maintain the balance between generation and load (demand)
- Transmission and distribution – Upgrading this infrastructure is costly and storage could help to alleviate congestion
- Spinning Reserves – Reserve generation for an unexpected event, usually available at short notice
- Energy arbitrage – Storing excess energy generation during the day and providing resource adequacy when demand outpaces generation.
Existing behind the meter pilot projects
Several pilot projects exist for second-life LIBs used in customer energy management strategies, ranging from small to large-scale customers (Table). For example, Nissan’s European headquarters in Paris, France features a 192kWh/144kW system composed of 12 second-life Nissan Leaf batteries. The system allows the headquarters to manage demand and take advantage of TOU electricity rates.
The Robert Mondavi Institute at UC Davis is another example of a behind-the-meter system that is paired with solar PV. In a project sponsored by the California Energy Commission (CEC), a 300-kWh system comprised of 18 repurposed Nissan leaf battery packs was assembled inside a shipping container.
On the larger end of customer demand, a cooperative effort between Nissan, Eaton, BAM and The Mobility House has led to the installation of a hybrid first-life/second-life system at the Johan Cruijff Arena, in Amsterdam, Netherlands. This system, comprised of 148 Nissan Leaf batteries, has a 3 MW power capacity and a 2.8 MWh electricity storage capacity. The battery system helps to decrease energy costs and provides up to one hour of back-up power to the arena. In 2016, a 13 MWh system was commissioned in Lunen, Germany based on 1,000 BMW i3 packs, approximately 90% of which are second-life batteries.
Developing policy to enable battery reuse
Although there are no uniform global or regional policies governing the reuse and recycling of EV batteries, there has been an increase in attention paid to the issues of end of life (EOL) management in recent years.
One key challenge for EOL management is sharing of critical data like battery manufacturer, cathode material, battery condition, and usage history down the value chain to the potential secondary market or recycler. The Global Battery Alliance (GBA) was founded in 2017 as a collaboration of 70 public and private organizations with the goal of establishing a sustainable battery value chain including repurposing and recycling. The GBA ‘Battery Passport’ aims to improve the sharing of data along the value chain by standardizing labelling and creating a database of battery information. Sharing of battery data could decrease the costs of battery repurposing and increase the value proposition of battery reuse.
Another key challenge for battery reuse is logistics. Used batteries, once removed from a vehicle, are considered hazardous waste and are therefore governed by restrictions on the transportation of hazardous wastes. The costs and challenges in transporting and aggregating used batteries are also a barrier to widespread reuse.
The waste hierarchy is a useful framework for considering the fate of used EV batteries: reduce first, followed by reuse, recycling, energy recovery, and finally treatment and disposal. EVs already deliver significant environmental benefits compared to conventional gasoline vehicles; encouraging battery reuse and ensuring proper recycling are important strategies for further increasing the sustainability of EVs.
Existing second-life pilot projects
|United Technologies Research Centre Ireland, Ltd.||Paris, France||2017-||88 kWh (Kangoo packs number unspecified)|
|Gateshead College, United Technologies Research Centre Ireland, Ltd.||Sunderland, United Kingdom||2017-||48 kWh (3 Leaf packs, 50 kW PV capacity)|
|Nissan||Paris, France||2017-||192 kWh (12 Leaf packs)|
|RWTH Aachen University||Aachen, Germany||2017-||96 kWh (6 Kangoo packs)|
|City of Kempten, the Allgäuer Überlandwerk GmbH||Kempten, Germany||2017-||95 kWh ( 6 Kangoo packs, 37.1 kW PV capacity)|
|City of Terni, ASM Terni||Terni, Italy||2017-||66 kWh (Kangoo packs number unspecifed, 200 kW PV capacity)|
|Daimler, Getec Energie, The Mobility House, Remondis||Lunen, Germany||2016-||12 MW, 13 MWh (1000 i3 packs, 90% 2nd life)|
|Nissan, Eaton, BAM, The Mobility House||Amsterdam, Netherlands||2019-||3 MW, 2.8 MWh (148 Leaf packs, 42% 2nd life)|
|Daimler, The Mobility House, GETEC ENERGIE, Mercedes-Benz Energy||Elverlingsen, Germany||by 2020||20 MW, 21 MWh (1878 packs, 40% 2nd life)|
|Mobility House, Audi||Berlin, Germany||2019-||1.25 MW, 1.9 MWh (20 e-tron packs, 100 % 2nd life)|
|UPC SEAT, Endesa||Malaga, Spain||2016-||37.2 kWh (4 PHEV packs, 8 kW PV)|
|BMW, Vattenfall, Bosch||Hamburg, Germany||2016-||2 MW, 2.8 MWh (2600 i3 modules)|
|Renault, Connected Energy Ltd||Belgium||2020-||720 kWh, 1200 kW (Kangoo packs number unspecified)|
|Nissan, WMG: University of Warwick, Ametek, Element Energy||United Kingdom||2020-||1 MWh (50 Leaf packs)|
|UC Davis, California Energy Commision, Nissan||Davis, CA, USA||2016-||260 kWh (864 Leaf modules, 100 kW PV)|
|BMW, EVgo||Los Angeles, CA, USA||2018-||30 kW, 44 kWh (2 i3 packs)|
|UC San Diego, BMW, EVgo||San Diego, CA, USA||2014-2017||108 kW, 180 kWh (unspecificed number of mini E packs)|
|General Motors, ABB||San Francisco, CA, USA||2012||25 kW, 50 kWh (5 Volt packs, 74 kW PV, 2 kW wind turbines)|
|Toyota||Yellowstone National Park, USA||2014-||85 kWh (208 Camry modules)|
|Nuvve, University of Delaware, BMW||Newark, USA||2019-||200 kW (unspecificed number of mini E packs, integrated with V2G in addition)|
|Nissan Sumitoto (4R Energy), Green charge network||Osaka, Japan||2014-||600 kW, 400 kWh (16 Leaf packs)|
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