- Mercedes-Benz among companies to sign recent second-life battery deals
- But serious concerns about use of such batteries for domestic storage
- Urgent need for widely accepted testing standards
Used electric vehicle batteries – or second-life batteries as they’re often known – have long been touted as having the potential to be used in stationary energy storage systems once they no longer meet the standards required for electric vehicles.
Recycling batteries, in many ways, makes sense from both an environmental and economic perspective. If used batteries are taken to landfill, there is a risk that substances such as mercury and lead can leak into the environment and cause soil contamination or water pollution. Meanwhile, re-using batteries can also be financially profitable – recycling batteries, breaking them down into their constituent components (such as copper and aluminium, for example), and then selling them on can generate significant financial returns.
In addition, recycling batteries can be a cost-effective way of sourcing materials such as nickel and cobalt – supplies of both elements are getting squeezed, and consequently prices are rising. If we take the example of Nickel, it’s currently trading at around $28,000 per tonne, more than twice the price it was sold for five years ago. Cobalt prices have been prone to more fluctuation in recent times, though between April 2020 and April 2022, the price soared from just under $30,000 per tonne to more than $81,000 per tonne.
Second life batteries attractive proposition
Unsurprisingly, second-life batteries have become an attractive business proposition. Last month, it was announced that Mercedes-Benz Energy and Lohum – which describes itself as “India’s largest producer of sustainable Li-ion battery raw materials through recycling, repurposing, and low-carbon refining” – had entered into a “multi-year” supply contract agreement for second-life batteries. The batteries will be used for stationary applications ranging from small 6KWh batteries to larger 1MWh storage.
Other recent second-life battery-related developments included storage system provider Connected Energy – whose systems incorporate former electric vehicle batteries – completing a £15 million investment round. Investors in the round included Caterpillar Venture Capital, the Hinduja Group, Mercuria, OurCrowd and Volvo Energy. They were joined by existing investors Engie New Ventures, Macquarie, and the Low Carbon Innovation Fund. Connected Energy CEO Matthew Lumsden said the investment would “maximise the volume of batteries that are redeployed in second life applications”.
Elsewhere, back in 2021, it was revealed that a partnership between Enel X and ADR (Aeroporti di Roma, Airports of Rome) would be piloting the integration of second-life batteries from electric vehicles into a 30MW solar park being built at Rome Fiumicino Airport, which is scheduled to be completed by 2024.
Fears about using second-life batteries in domestic storage
Now the storage industry is taking steps to assess the market for the use of second life batteries in domestic battery energy storage systems. The domestic battery energy storage market is expected to grow rapidly in the coming years – projections from Solar Power Europe show that cumulative residential storage capacity installed across Europe will double from 6.1 GWh in 2022 to 12.8 GWh in 2025.
Yet there are serious doubts about whether second-life batteries are safe enough for domestic battery energy storage systems. A study published last month by the UK Department for Business, Energy & Industrial Strategy’s Office for Product Safety & Standards (OPSS) concluded that some storage industry stakeholders hold the view that the safety of second-life lithium-ion batteries can never be guaranteed and “should not be employed under any circumstances” in domestic storage systems.
It's a conclusion that will come as a devastating blow to a number of companies that have been working on the development of second-life batteries with the domestic storage market in mind. However, the OPSS study revealed that other members of the storage community are more optimistic about the potential for using second-life batteries in domestic storage.
No consensus on testing standards
Some storage industry stakeholders are confident that it is possible to put a safety framework in place that will facilitate the use of second-life lithium-ion batteries. But there is a caveat – such a framework will only work if the full history of the batteries in their first life applications is known and they can be tested effectively.
The problem is that there appears to be little consensus on exactly how to evaluate the safety of second-life batteries.
This was highlighted by the OPSS study, which concluded that there is “currently no widely accepted test methodology for assessing the safety of second-life lithium-ion batteries” (outside of the UK and Europe, the US and Canada has the ANSI/CAN UL 1974 Standard for Evaluation for Repurposing Batteries).
As electric vehicle-use increases significantly, the amount of potential second-life batteries also grows. In 2021, electric vehicle sales in China tripled to 3.3 million, while sales in Europe stood at 2.3 million, up from 1.4 million the previous year, according to the International Energy Agency. Meanwhile, in the US, electric vehicles doubled their market share to 4.5 per cent in 2021, with sales totalling 630,000. The pile of batteries that could be given a second-life is only going to mount up.
The key will be eradicating any safety concerns surrounding second-life batteries. While such worries persist, the development of the second-life battery market will be severely constrained. And that’s a shame because the potential is significant. The lack of consensus on standards for assessing the safety of second-life lithium-ion batteries should be a major concern, not least for electric vehicle manufacturers. If concerns about the safety of such batteries increase, it will sow seeds of doubt in the mind of the electric vehicle industry’s potential customers.