Retired EV batteries packaged into C&I-scale storage solutions will appeal to owners of medium-sized PV systems who feel storage is beyond their budgets.
For solar to really flex its muscle, the grid needs batteries. Chemical energy storage technology such as lithium-ion solutions can be wildly dynamic, capable of whip-second transactions in spot and frequency markets that allow revenue to flow to owners … for now. As more storage is added to the grid, however, it is likely that investors will be forecasting returns aligned with the value in self-consumption rather than the provision of grid services.
For owners of commercial- and industrial-scale rooftop PV systems a battery may rate as an extravagance. With payback periods about equivalent to warranty terms, why do it? (There are, of course, many C&I battery solutions that have delivered terrific value for clients.)
If only it were possible to order a battery that didn’t promise top-shelf performance and could be bought for a hefty discount. Maybe one assembled with cells from electric vehicle batteries?
In Singapore, global technology lifecycle company TES has built a 1MW containerised storage solution using second-life EV batteries to test the viability of catching the value in an ageing electric fleet.
“Second-life ESS [energy storage system] applications are well-suited for projects such as deferring transmission and distribution investments, providing reserve energy capacity to maintain a utility’s power reliability and taking advantage of arbitrage opportunities,” says TES battery energy storage systems lead Joe Johar. “Another suitable application is back-up power.”
Life left in it
When they are retired, EV batteries still have about 80% depth of discharge capacity. TES quotes data which shows about six million batteries from vehicles a year can be used to make storage assets suitable for commercial applications, with a 40-foot container capable of hosting up to 3MWh.
Clean Energy Council data for medium-scale PV systems between 100kW and 5MW shows businesses, governments and schools added more than 162MW of capacity in 2019. As the commercial PV sector keeps growing, storage will become more sought-after as a way to justify adding more capacity to existing solar systems and to increase self-consumption.
For its second-life energy storage systems TES is targeting businesses where a battery would be an attractive proposition if only one could be found for perhaps 20-30% lower cost than new kit from the market-leading brands.
Some C&I solar companies have delivered large battery solutions for clients but it is still uncommon for storage to be included in projects. Batteries assembled from second-life cells retrieved from electric buses and commercial vehicles could change all that, Johar says.
“Some industries have phenomenal loads,” he says. “There is a great opportunity in the commercial sector.”
With ample materials sourced from a growing fleet of EVs, Johar predicts it will be no trouble to manage a range of capacity sizes, complete with modules that have been tested to UL1974 accreditation at TES’s Singapore facility. Solutions can be custom delivered in containers complete with a power conversion system, battery management system and fire extinguishers. The warranty will cover a defined number of cycles.
“Ideally we want to make this like plug-and-play cabinets,” says Johar, speaking to EcoGeneration at the company’s Sydney headquarters in Villawood, where it is working on building a demonstration battery similar to but smaller than the one in Singapore.
“People might say, hang on, second-life also means less run time. Sure, but it opens up the discussion to say you can still take advantage of the system for four years,” he says.
TES is also working with EPC companies that may have installed PV systems in areas where there is no feed-in tariff and an energy storage system would provide applications such as load shifting. TES’s 1MW Singapore battery is connected to 350kW of solar.
As prices fall
Installers may hold back from selling batteries because the value proposition is not clear, Johar says, but a second-life solution makes the economic argument “a whole lot more compelling”.
About 10 years ago buyers of residential solar systems could expect their investment to pay for itself after about eight to 10 years. Today, it’s more like three to four years. Johar says home batteries will see the same steep cost falls.
“The same thing will happen on the battery side and we are trying to get in a bit earlier on the curve, not on utility scale but ideally we are looking at repurposing second-life batteries for the commercial sector,” he says, hinting that utility scale is not out of the question in the long term.
A payback for a new battery may be eight to 10 years, say, but a second-life unit could pay for itself in less than four years, he says.
There is a lot of talk about second-life batteries, Johar says, but so far in Australia no-one is putting words into action. “Considering we have this huge adoption of rooftop solar this is a strategic market for us, so we want to prove our value here so Australia can become a launch pad for other markets,” he says.
Raw materials can come from anywhere, typically busses or commercial vehicles, and a battery made up of cells from multiple sources will require a battery management system that can make them all work together.
TES’s main line of business is electronics recycling, where it either wipes all the data from gadgets before sending them out into the world again or pulls them apart to recover useful parts and valuable materials, like gold, platinum and silver. “We started embracing the circular economy concept in extending the life of a product,” says Johar.
In 2007 it entered a joint venture with French company Recupyl to recycle batteries and retrieve lithium, cobalt and nickel, and in 2018 it started recycling IT batteries. About that time it started talking with EV makers about what to do with their batteries. “From there it evolved to trying to introduce second-life solutions for EV batteries,” he says. Full recovery happens at the plant in Singapore.
When repurposed correctly, EV batteries can be used in non-critical applications such as back-up power, load shifting, peak shaving, grid stability and spinning reserve, Johar says.
For the future, the company is looking into a third-party technology that will be able to trace a battery, to see along its supply chain to ensure it hasn’t been damaged in a wreck or suffered faults. Every module set aside for re-use will be put through a testing regime, including a full charge and discharge to measure performance. A Singapore testing facility due for completion in the middle of the year is being built to satisfy UL standard 1974.
An attractive feature about the second-use solution is the battery will be taken back at the end of its life by TES through its global network. Transporting storage assets is no trivial matter, with strict international conventions that cover the transportation of hazardous materials – which includes batteries – across and within borders.