EV batteries offer huge energy storage potential says BNEF

A new report states that there is huge energy storage potential in repurposing used electric vehicle batteries.

Analysts from Bloomberg New Energy Finance believe that using these batteries could bring about a new form of low cost energy storage.

In the report, BNEF senior analyst Claire Curry calculates that there will be 29 GWh of used EV batteries coming out of cars by 2025 – a capacity that she says “far exceeds the size of the current stationary storage market”.

Of this 29 GWh, around 10 GWh will get a second life as stationary storage. EV batteries offer huge energy storage potential says BNEF

Curry states that today, a new stationary storage system can cost up to $1000/kWh while in contrast, repurposing used EV batteries could cost as little as $49/kWh in 2018, with an additional $400/kWh cost to convert to stationary use.

Curry highlights the fact that the auto industry is divided on the issue. “While Tesla won’t be involved in second life, BMW, Nissan and Mercedes Benz already have second-life stationary storage projects in place.”

The report states that this year there will be “very few used batteries available for second-life applications, but volumes will increase significantly beyond 2020. Whether these batteries are suitable for second-life storage applications depends on the energy remaining in them; whether the car company warranties them outside the vehicle; and the price of commodities.”

It notes that currently, the costs of repurposing a used EV battery, such as transportation, testing, cycling and repackaging, can be high ­– over $100/kWh today – but adds that this cost should halve by 2018 due to economies of scale and learning.

The report explains that lithium-ion batteries are the most expensive part of an electric vehicle and dictate important performance metrics like driving range and power.

“EVs currently in circulation are a maximum of five years old and the majority of batteries are performing well, with little loss of driving range (caused by energy loss of the battery).”

However, the report states that in the next few years more of these batteries will experience energy loss, and by the time they are up to ten years old they will have lost enough capacity to significantly affect the driving range.

“When battery performance drops below a threshold of acceptable performance, owners can replace the batteries with new ones or the whole car may be scrapped,” says BNEF. “Those original batteries could still have 70 per cent of their initial energy left and contain valuable materials. Landfilling them is not economic and most countries have regulations against this.”

Curry says that the development of the ‘second-life’ battery market “is interesting to car companies, policy makers, stationary storage companies, utilities, renewable power developers and battery manufactures. It offers the potential for large amounts of low cost batteries, with plenty of energy left in them, to become available years before newly manufactured unsubsidised batteries are cheap enough to deploy.”

For more information about the BNEF report, click here.

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