Second-life batteries: technical achievements and commercial challenges
Our grids are increasingly powered from variable, renewable sources while more and more electric vehicles occupy our roads. Powervault is well positioned to provide the grid flexibility these changes require, while minimising the risk of ecological damage from used batteries by offering them a second life.
Electric vehicles are soon to become the status quo. Mandates have passed to outlaw sale of traditional fossil fuel vehicles from 2030 for many countries, and from 2035 across the wider EU. Since 2019, 90% of global automotive markets have included incentives for electric vehicles. In 2021, battery electric vehicles (BEV) constituted 9.8% of automotive sales in the EU, alongside plug-in hybrid electric vehicles (PHEV) occupying 9.1% of the market. We are yet to witness the most transformative stage of this transition. Demand for electric vehicles is growing rapidly; in the third quarter of 2021, demand for BEVs rose 56.7%. In their January 2022 report, influential energy consultancy firm ElementEnergy made, for the first time, the bold claim that ‘the transition to electric mobility is now inevitable.’ In all EU nations and across all consumer groups surveyed, respondents’ first choice powertrain was either a BEV or a PHEV: 0% selected an ICE vehicle. This changing attitude is a necessary and an important step toward overarching climate goals, but there are embedded issues. Simply, this demand for electric vehicles will create a greater demand for Li-ion batteries, and also a greater volume of used Li-ion batteries. Depending on decisions taken now, this vast increase will either present a profound and expensive ecological risk or, if properly prepared for, this will provide a reserve for second-life products and further safe recycling.
Largely driven by an increasing number of passenger EVs, annual global demand for Li-ion batteries is predicted to increase fivefold by the end of the decade:
Where will this lithium come from? Globally, only 5% of used Li-ion batteries are currently recycled. Technologies and facilities for recycling end-of-life EV batteries are currently lagging far behind the sharp rise in EV production and deployment. On our current trajectory, the additional lithium needed will be sourced from mines with various knock-on impacts. The South American ‘Lithium Triangle,’ a region spanning Chile, Bolivia and Argentina, is estimated to contain 57% of global lithium reserves. This region is a salt flat, containing scarce water. The mining process is water intensive, diverting water away from nearby ecology and agriculture. In addition, the expansion of mining operations has aggravated tensions between local communities and mining corporations. Li-ion batteries for EVs also typically use various other metals such as cobalt, the mining for which poses environmental risks, and can be carried out in dangerous and unregulated conditions. Over two-thirds of global cobalt production occurs in the DRC, where around 20% of mines have documented cases of misconduct. To cater for the growing demand for Li-ion batteries for EVs, the EU will need five times as much cobalt by 2030. If we continue to expand mining in-line with the growth in EV demand, these issues will only worsen, unless mitigated.
Also, Li-ion waste, while less hazardous than previous lead acid battery compositions, still presents an environmental issue. In the UK, EV batteries are classified as industrial batteries, and under Waste Batteries and Accumulators Regulations 2009 it has been illegal to landfill or incinerate waste them since 1st January 2010. The 2006 EU Batteries directive characterises and legislates used EV batteries similarly. This has been mandated as the responsibility of OEMs, who must take back waste EV batteries, free of charge. In the absence of sufficient recycling facilities, many OEMs have responded to the upswing in used EV batteries by simply stockpiling the waste. This is a waste of resources, and clearly can’t continue indefinitely.
Thankfully, there is significant scope for recycling and re-using this waste to effectively mitigate these risks. Within the hierarchy of waste management, re-use is considered preferable to recycling, as it maximises economic value while minimising environmental impact. We ought to maximise the re-use of used batteries before they are eventually recycled at the end-of-life. If we can achieve such a closed-loop system, we greatly reduce the need for mining, while also benefiting from minimizing the potential for ecological damage from used batteries. This aim is neither radical nor unachievable. Lead-acid batteries are widely recycled: in the US 99% of lead-acid batteries are currently recycled. As an additional benefit, creating a robust European circular economy for Li-ion batteries minimises dependence on external supply chains. The reasons to establish a circular economy for Li-ion batteries are clear and numerous. As such, innovation is required. We must develop techniques to refurbish used EV batteries for a second life.
This is technically feasible: we have achieved it at Powervault. Our Powervault ECO product, the first of its kind, was developed in collaboration with Renault-Nissan back in 2017, with the first units delivered to customers’ homes in 2019. The Powervault is a smart battery energy storage system (BESS), with a modular design catering for a range of required capacities. BESS enable owners to save money on their energy bills by capturing excess solar generated by their solar PV panels, as well as arbitraging time-of-use tariff differentials. Also, this enables owners to import from the grid when the energy mix is most green, as grid carbon-intensity (gCO2/kWh) strongly correlates with price. At the system level, the flexibility provided by domestic storage helps reduce the economic and environmental cost of reinforcing grid infrastructure. By providing flexibility services, BESS owners can support the grid while generating further value for themselves.
Below is the daily summary of one of our ECO units over summer 2021.
The owner imported energy to charge their unit at midnight, shown in purple on the top graph, making use of their cheaper overnight tariff. They then used this energy to power their home in the morning, shown in blue also on the top graph. As the sun rose and their PV began generating energy, this was used to recharge their battery, shown in blue on the bottom graph. This stored energy was used to power their home in the evening, again shown in blue on the top graph. Overall, using excess solar energy and time-of-use tariffs, the battery enabled the owner to minimise their use of peak-price electricity over both the morning and evening periods.
The Powervault ECO has all the same functionality as the regular product, differing only in that its battery packs have been constructed from refurbished used EV cells, rather than new ones. At the end of its first life in a vehicle, a cells’ capacity may have degraded to around 70%. Cells with such degraded capacity have a substantially lower energy-density, and so in the mobile setting of an EV this greatly affects functionality. However, the reduced energy-density is unproblematic in a static environment, such as our ECO product. Powervault has been running ECO products in the field since their launch in 2019. To the best of our knowledge, we are the only company with operational second-life units in the UK.
For development of the Powervault ECO, we received a selection of variedly degraded 7.5 V, 66 Ah cells from end-of-life Nissan Leaf’s and Renault Zoe’s. Cells typically degrade at different rates depending on their location. We used proprietary hardware and techniques to sort and grade the cells’ State of Health (SoH). From the graded cells, we could create safe, functional Powervault systems that performed reliably. Our approach has always been battery agnostic, and our battery energy storage system has been designed to accommodate a range of different chemistries. Over the last five years, we have accumulated a large dataset from measuring the second-life cells’ performance in the field. This has equipped us with a robust empirical basis to predict remaining usable life and identify weak cells. While we successfully demonstrated that this innovative approach is technically feasible, inroads must still be made for it to become commercially viable at scale.
Powervault has worked hard for many years to establish an efficient and scalable methodology in order for the end-product to sit at a competitive price-point. However, having to disassemble, grade and then reassemble the cells as described made the process time and cost intensive. We have continued to address these issues through our collaboration with Loughborough University, which has been focused on accelerating second-life cell SoH testing and grading. While full technical details of this ongoing analysis are proprietary, promising developments are underway.
Another key factor affecting the price point, and so viability, of second-life systems is the terms on which second-life batteries are available from OEMs to companies repurposing used EV batteries. Each automotive OEM sets different commercial terms on which second-life batteries are available, each having a different perspective. Taken together with the cost of reprocessing cells, if OEMs levy a significant price on second-life batteries, this also disincentivises the purchasing of second-life products by consumers, since they are unwilling to pay a premium for a product with a shorter life, even if it uses recycled materials. Having offered first and second-life products for many years, we have come to understand that, despite the environmental inclinations our customers, many understandably select first-life products that offer a longer warranty, compared to second-life products with a shorter warranty. The cost reduction achieved by incorporating used batteries doesn’t compensate the customer for the reduced battery capacity and lifespan. Having brought second-life batteries to the market for the first time, we are very keen to seek a way forward to promote wider commercialisation. Several possible avenues could help with this. First, if OEM’s purpose-built EV batteries for easier disassembly, then perhaps commercially it would be viable to charge companies to repurpose the batteries. Second, Governments could provide a lower rate VAT regime for re-used products – the current system incentivises making new products. Lastly, OEM’s could provide an incentive for companies such as Powervault to process waste EV batteries to repurpose them for a second life in a static application.
Powervault CEO Joe Warren states “It is now clear that Electric vehicles are going to become the most prevalent powertrain. If this growth is not carefully managed there could consequences both in terms of resource usage and increased electricity demand on the grid. We must continue to collaborate and innovate to make sure that this radical transition occurs as responsibly and efficiently as possible. To ensure that the growth of the EV market occurs in a genuinely sustainable way, it is vital that a proper circular economy for EV batteries is established whereby, after the initial use in the EV in which only 30% of their capacity is degraded, they have a second useful life in a static application before they are recycled at the end of their useful life. Furthermore, reused EV batteries can play a part in strengthening the grid to further enable the deployment of EVs. At Powervault we have shown that it is technically feasible; we now just need willing partners to make it commercially feasible.”
Jonny Cottrell-Mason, Commercial Analyst Powervault