Could EV batteries have a second life in stationary storage?

Image credit: Connected Energy.

By Matthew Lumsden, CEO of Connected Energy, a firm with expertise in using batteries for energy storage.

Picture this, it’s Friday night and you’re watching the ever-popular TV game show Family Fortunes. The question comes up: “What items are often discarded when still 75% full?” Stale bread, long forgotten condiments, and unloved cosmetics all come up as popular answers, but how many people would have guessed an EV battery?

The answer is likely close to zero, but the reality is that every year tens of thousands of EV batteries will be retired from vehicles when their capacity drops to around 75%. However, unlike those out-of-date condiments which are destined for the bin, many EV batteries could have a second life by being converted into stationary storage.

With over 100 million EV batteries expected to be retired in the next decade, and a fast-growing energy storage market globally, repurposing spent EV batteries into stationary storage represents an exciting, high-value sector. Indeed, the global energy storage market is set to grow by 21% annually to 2030, according to BNEF while concerns over the supply of critical minerals to manufacture new batteries persist. In addition, extending the battery’s useful life by up to 100% can alleviate the growing challenge for automotive original equipment manufacturers (OEMs), who, despite limited recycling facilities, are required by regulation to collect and dispose of EV batteries appropriately.

Repurposing EV batteries into stationary storage
Before Connected Energy repurposes a battery, it must first pass a history and health check, including a physical inspection to ensure it has not been involved in a collision, shows no signs of damage or corrosion, and meets minimum performance criteria. Most second-life battery stock considered by Connected Energy for stationary storage comes from fleet vehicles such as vans via automotive OEMs, as these typically have excellent traceability, good service history, and are available in large quantities. Most fleet vehicles also have predictable daily duty cycles and are charged steadily overnight which makes them relatively homogeneous in terms of use and degradation.

Contrary to early industry expectations, battery degradation has not been as significant as anticipated. Our test data revealed that under normal operating conditions, most second life batteries offer 80-85% efficiency, with theoretical lithium always at the high end of 90% – not dissimilar to what is experienced in a car. Similarly, the data collected on duty cycles is being used to improve prediction capabilities and ensure robust safety processes.

Using second life batteries in stationary storage
Connected Energy’s system controls battery packs in pairs within containerised systems, ranging from 24 to 100 packs depending on the required system capacity, while utility-scale systems are much larger. A control system manages each pair, allowing higher capacity packs to be called upon more frequently so that packs reach the same state of health over time. The system also provides greater levels of dynamism and flexibility, optimising how the batteries are used and monetised.

For example, Nottingham City Council installed 600kW of second life stationary storage at their EV fleet depot to help transform the site’s energy use. The system stores excess electricity from three on-site solar arrays which is then used later to charge their EV fleet and reduce electricity use during peak times. Additionally, the site aims to participate in grid services by trading stored electricity and through vehicle-to-grid services via the 40 bi-directional EV chargers.

Each system is continuously monitored remotely with data on operating temperature, charge, efficiency and exception alerts analysed to assess system health. Machine learning identifies anomalies, trends and relationships between the variables to guide real time operation and maintenance strategies. Operational data can also update models and assumptions to improve future systems, and, in some instances, is shared with OEMs to improve their understanding of battery performance in later life.

The future of second life batteries
The introduction of the Battery Passport in the EU in 2027 will enhance data availability on battery performance and durability, supporting better decision-making at the end of a battery’s first life. Equally, we can expect that the EU Battery Regulation Amendment – which has the goal of achieving sustainable battery lifecycles – to encourage more collaborative ways of working, particularly between battery OEMs and stationary storage providers.

New business models are likely to emerge, for example where OEMs retain the ownership of their batteries and receive revenue from their continued use. Finally, as a market for second life batteries develops, we are likely to see increased engagement from large fleet owners, who will be interested in maximising the value that they can get from the sale of their batteries bringing the overall lifecycle costs down.

The potential for second life batteries in stationary storage is immense. The next five years will see a significant increase in batteries that can offer a viable alternative to new batteries, and in doing so address several key energy challenges in the UK; from the need for grid storage to support greater renewables penetration and improve energy security to providing additional power capacity to support the electrification agenda. Over the past decade, Connected Energy has developed the necessary technologies to harness this opportunity and is now poised to scale up.