Second Life Batteries Support Sustainability and Communities Affected by Climate ChangePosted to Guidehouse
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- Oct 23, 2020 6:15 pm GMTOct 23, 2020 6:20 pm GMT
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For many, a green transition means more EVs on the road, sustainable supply chains, and proactive solutions to mitigate the effects of climate change. Even as R&D efforts step up to meet the demands for a green economy, challenges remain for these diverse markets. For one, the accelerated growth of EV sales is expected to strain battery supply chains. At the same time, sustainability advocates are demanding solutions to mitigate the waste created by used EV batteries accumulating in landfills, which will continue to grow in tandem with EV adoption (by 2030, Guidehouse Insights expects EVs will make up 21% of all light duty vehicle sales globally).
Second life batteries provide a viable solution to addressing sustainability concerns. EV batteries usually have an8-10-year warranty years. After that, these batteries are retired from EV use but can often still be suitable for other energy storage applications because they retain around 70%-80% of their original capacity. By finding a second life for used EV batteries, manufacturers can reduce waste, create new revenue streams, and avoid the costs associated with chemical and toxic waste mitigation. This capability also allows storage systems integrators to identify cost-saving solutions for new projects.
Applications for second life batteries vary depending on system requirements. Storage systems using second life batteries can range from EV fast charging battery support, which might need only one used EV battery, to a system for large-scale frequency regulation, which would likely require multiple EV battery systems. Frequency of use and cycling affects the used battery lifetime for each application.
Among these applications is residential battery storage, which is frequently co-located with a solar PV system. This energy storage system allows residents to generate and store excess power, later using the stored energy during peak energy demand times. This system is also beneficial in case of power outages, allowing residents to power their homes or EVs during these shutoffs.
Severe Climate Events Shed Light on Access to Energy
As the effects of climate change become more severe across the globe, people are scrambling to build resiliency against surging storms, heat waves, and wildfires. In California, wildfire season has brought some of the most severe climate events experienced by the state to date. Wildfires have required many to evacuate their homes, while a recent heatwave has overloaded the power grid, causing rolling blackouts and leaving many without power. Residential energy storage systems can provide backup power and overcome some of these challenges. Storage technology has made great strides—systems continue to provide higher energy densities and decrease in price. Still, energy storage options remain too expensive for the average resident, making this option inaccessible to low income communities.
The introduction of second life batteries has the potential to address this restrictive barrier, as used EV battery systems can be priced at a lower dollar per kilowatt-hour (kWh) amount compared to new battery systems. By 2025, Guidehouse Insights expects used EV batteries to reach $74/kWh, while new EV batteries are expected to remain at around $115/kWh. The residential cost for new installed lithium ion storage systems is expected to range from $336/kWh to $823/kWh in 2025.
Fewer financial obstacles to energy storage technologies can allow for more equitable access to clean energy. This accessibility is especially important because low income communities are disproportionately experiencing the negative effects of climate change, yet they lack the resources to mitigate these impacts. To build resiliency for all communities vulnerable to the effects of climate change, immediate steps need to be taken to fortify the response to severe climate events that show no signs of slowing down. Additionally, the sharp increase of EV sales year-over-year means batteries from those EVs will be retired from vehicle use and can be used for other applications. In 2030, around 136 GWh of energy capacity is expected to become available from second life batteries.
Building Resilient and Sustainable Storage Solutions
The expansion of the second life battery market presents benefits for diverse stakeholders across the value chain. For example, the California Energy Commission awarded $2.9 million in grants to companies like CleanSpark and ReJoule that research ways in which second life batteries can be used in solar microgrid applications. Added support from regulatory bodies could help to achieve production at scale, and incentives for residential end users could further close the economic gap for those needing financial aid for these projects.
It can be a challenge to identify which of the many environmental challenges should be given priority. Although several industries are making strides in advancing clean energy technology, we are still faced with the impending hurdles of how to reduce waste and our carbon footprint during production. A switch from fossil fuels to renewable energy resources is widely understood to be imperative to a sustainable world, but during seasons of wildfires and heatwaves, the consequences of limited power generation can be severe. Second life batteries still have barriers to overcome in the market, such as efficiently identifying supplier to project integrator pipelines and reaching economies of scale. However, this technology is uniquely positioned to bridge many of these issues. Accelerating the growth of these kinds of technologies encourages the market to provide equitable access to clean energy for those who need it most with solutions that have economic benefits across the value chain.