Batteries: SECOND LIFE and ENERGY STORAGE

EV batteries require a high-power output and fast recharge capability to power heavy cars at speed and for long durations. But as a battery degrades it loses charge and maximum output, eventually becoming no longer viable for every day electric car use. This does not mean the battery is no longer useful. Used EV batteries can have a second life as storage in less demanding ‘retirement’. This can include storage at charging stations, home energy storage fed from renewable sources like solar, backup power packs as emergency power, even powering elevators and refrigerators. Even when these batteries can no longer sustain a car they can still collect and discharge power for another 7 to 10 years.

Let's take a typical 70 kW EV battery; at its peak, when brand new, this single battery would hold enough power to meet the energy demands of an average American home for more than two days. America’s electricity use for home use is the highest in the world. In the UK a 70-kilowatt battery could power a home for almost a week, while in China this battery would power an average Chinese household for almost 20 days.

EV Battery Full Lifespan

So even if this average EV battery has lost half of its capacity, it will still hold enough to power a US home for one day at least. Moreover, the demands from home electricity use are far less extreme than powering a car which draws energy fast for quick acceleration and long durations. This means during a battery’s second life degradation happens at a much slower rate. It is estimated that there could be over 3 million used electric car batteries by 2025. Combining these used batteries with renewable energy would lead to a highly sustainable and productive long lifespan for an EV battery from mine to ultimate recycling.

Given China's already strong lead in electric vehicles, it is predicted China will also become a world leader in second life usage. There has been some anti second life rhetoric from industry insiders. Their argument is that recycling a battery and reusing most of its minerals for new batteries is more efficient and ecologically friendly than hanging on to batteries for years and dealing with the problem later.

Tesla which already manufactures its Powerwall and Power Pack stationary battery packs prefers to recycle rather than reuse old batteries. One of the reasons Tesla prefers recycling is obviously to sell new power packs but also because, as of now, Tesla doesn't have many old battery packs coming back for recycling yet. It will be at least another 5 to 10 years before a significant volume of used Tesla batteries becomes available.

Either way there is a place for both recycling and re-use. With less frequent and shallower depth of discharge cycles, using EV batteries for home storage is perhaps the most applicable use case. Not all EV batteries will be reusable, it depends on the ultimate percentage of charge capable capacity remains after its life in an EV. Second life EV batteries could cost as low as 20% of the original cost of a new battery, at around $40 per kWh. Reusing EV batteries improves battery economics, sustainability and reduces the lifetime carbon footprint.

There are challenges before this becomes commonplace though, principally the challenge of falling new battery costs versus the cost of reconditioning old. Also, there is still not a universal standard battery for electric cars with many manufacturers pursuing their own configurations, making it more difficult for re-use in some cases for now.

ENERGY STORAGE

Tesla Model S Battery Pack

The advancement of lithium-ion batteries for the automotive industry has spilled over into the energy industry. With the welcome growth of electricity generation from renewables, like wind and solar, demand is accelerating to find cost effective storage solutions. The sun doesn’t always shine, the wind doesn’t always blow and when it does it can produce electricity at unwanted, low demand times. Storing excess energy from renewables for use at peak demand periods is an essential component for a sustainable energy future. Used EV batteries for stationary storge could exceed 200 gigawatt-hours by 2030. However, even before EV batteries reach end of life, they are effectively energy storage on wheels. Vehicle to Grid (V2G) solutions are evolving fast and could offer EV owners the opportunity to effectively charge for free.

Using used batteries for storage doesn't have to just be because you have solar panels, for example a customer might install so-called ‘Behind the Meter’ (BTM) storage to reduce electricity costs. BTM works by loading the battery at off peak hours. This is the same technology as smart charging, it's just that the battery is hung on a wall instead of residing in the floor of a car. You can bring down the cost to charge your car at home considerably if you can charge up a wall storage battery at off peak charge rates, then charge your car at even a faster speed than you charge the storage battery, when you want at any time.

The cost of battery storage is relatively expensive compared to other methods, but it can be less expensive than power outage consequences when used as an emergency supply. Like Tesla's installation of emergency power storage in Australia following outages in 2020/21 or the Texas winter storm, when consumers were left without power, and people even died in their homes due to freezing freak temperatures.

However, given the price per kilowatt to store energy in batteries, it is not a cost-effective solution for a long duration. As battery cost per kWh improves, especially if solid state batteries become reality, commercial large scale energy storage may become more viable and widespread.

Industrial grid and battery energy storage solutions are not just a Tesla-driven market. Big players, like GE’s energy Reservoir for example, provide industrial scale storage solutions for backup power that have been in operation for decades in data centers, server installations and vital businesses where uptime is paramount. What's different with the large-scale energy solutions that we're now seeing is that the advancement of lithium-ion batteries and the cost per kilowatt has reached such a point that they can become viable on a much wider scale.

Battery energy storage also offers more resilience to energy grids in developing countries. Global demand for battery storage is expected to reach almost 3,000 gigawatt hours per year by 2040, enough power to run all of New York City for at least nine months on batteries or about half of all renewable energy produced around the world in a day.

New Tesla Solar Roof

Some of the valuations which have been placed on Tesla are, in part, because of its energy storage lead with its battery packs and Powerwalls. With Tesla's solar division, for example with its solar roofs, and energy storage solutions combined with electric cars they can offer an all-in-one package.

For this reason, some investment pundits predict Tesla will continue to rise in value and continue to have the edge over other OEMs who just produce cars.

In many parts of the world, almost 1 billion people currently don't have access to reliable electricity. Battery storage solutions combined with renewable energy generation offer remote regions not connected to electricity grids, power.

Not only do these solutions improve access to electricity, but storage also helps reduce the growing carbon output of developing nations. Storage can provide electricity for cooking, for

example; almost 40% of the world does not have access to clean fuels. Providing access to affordable reliable and sustainable energy for all is one of the UN's key Sustainable Development Goals (SDGs), and battery storage can play a big part in the solution.

The humble battery, which for years existed in a pretty much unevolved state, has in just two decades, rocketed to create entire new industries.