The world’s largest facility for giving EV batteries a second life is being built in Lünen, Germany. Scheduled to be completed at the end of this year, it will repurpose 1,000 Li-ion batteries originally used in Daimler Smart EVs, to store up to 13 MWh of power.
Daimler-Benz, GETEC, REMONDIS, and The Mobility House, are behind the project. “Because the lifecycle of a plug-in or electric vehicle battery does not end after the vehicle’s operating life,” their press release says. “If used in stationary power storage, the systems are fully operational even after the service life guaranteed by the manufacturer — with slight capacity losses only of secondary importance.”
A few months ago former US vice-president Al Gore took the podium at the TED 2016 event to announce the good news that renewable energy is already a good business for everyone. “This is the biggest new business opportunity in the history of the world, and two-thirds of it is in the private sector,” he said. “We are seeing an explosion of new investment. Starting in 2010, investments globally in renewable electricity generation surpassed fossils.”
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The price of solar panels has fallen every year since the 1990s, making solar energy increasingly affordable. Economies of scale — solar panel production has jumped exponentially in the past 10 years — fierce competition and new, cheaper, technologies have reduced the cost of manufacturing and boosted the power of new cells. New photovoltaic panels are smaller, cheaper, and easier to install.
While solar panel technology has reached the point where producing renewable energy is significantly less expensive than traditional methods of burning fossil fuel, there can’t be a sustainable market for 100% renewables without a cheap, clean, storage solution for the energy produced.
Electricity is not easily stored. Li-ion batteries, like all other battery types, store energy electrochemically. Until recently, Li-ion batteries were not cost effective for storing electricity at the levels necessary for grid backup. The price to store 1 KWh was around $400 just five years ago, making it a break-even point for electric vehicles, but too expensive to be used on a large scale to store electricity from renewable sources.
Since the popularity of affordable electric vehicles such as the Nissan Leaf and Chevy Volt is growing, the price of batteries is coming down, basically for the same reasons as solar panels. Unfortunately, not at the same rate, since the physical factors of battery chemistry have less room for innovation than the electronics on photovoltaic cells. The price of Li-ion batteries for electric vehicles, however, has already fallen below the $200/KWh mark, a 50% reduction in five years.
The big opportunity for grid electricity storage could come from the same batteries now being used in all those electric vehicles. Once the Li-ion batteries of EVs start to lose some of their capacity to store energy many EV owners will want to change them for new ones to keep their vehicles’ full range. EV manufacturers usually “lease” the battery to customers, offering a replacement after several years or a given mileage. The replaced batteries are expensive to discard and recycle, and they still have most of their capacity. The same batteries that powered an electric vehicle for 3–5 years could be used for another 5–10 years as renewable electricity storage.
Storage could become a significant business for electric vehicle manufacturers. It will provide additional revenue from the batteries they need to replace or recycle, and will also solve the waste disposal of the used batteries. Assuming the batteries are used an average of four years in an EV and another 10 years as electricity grid storage, the lifetime of each battery could be close to 15 years.
From an accounting perspective those used batteries are effectively cost free, since they have already been amortized during the lease of the electric vehicle.
As electric vehicles production continues to grow, and most manufacturers are announcing more models for the near future, the market for second-use EV batteries will also grow exponentially. To reuse those batteries for energy storage is not only a good business decision, but also one that can reduce waste, and ensure that those batteries can be recycled properly and efficiently at the end of their useful lifespan.
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