The Future Promise And Challenge Of Applying Used EV Batteries As A Grid Storage Resource

The Future Promise And Challenge Of Applying Used EV Batteries As A Grid Storage Resource

A recent report out of the UCLA and UC Berkeley suggests that the potential for used electric vehicle (EV) batteries could be quite significant and that such batteries could be a critical and inexpensive part of the solution in meeting the challenge to decarbonize our future power grid.

The UCLA School of Laws Emmit Institute on Climate Change  and the Environment and the UC Berkeley School of Laws Center for Law, Energy, and the Environment convened a meeting in April to look into this issue. Experts, including representatives from the automobile, utilities, and electric storage industries, as well as business leaders and public officials, were charged with developing a vision for second life batteries. They were also asked to look at barriers and potential solutions for addressing these hurdles.

We have a few years yet before this vision becomes reality and used batteries become available in meaningful quantities the EV life expectancy is around ten years but by that time, the potential becomes significant. This is especially the case in California, which will be characterized by two distinct features:

1)   high penetration rates of intermittent renewable energy sources (including a very significant level of solar power: for example San Diego Gas and Electric indicates it currently has 39,000 rooftop solar installations as of July 2014, with 270 megawatts of nameplate capacity almost 6% of total capacity with this number projected to double by the end of 2105);

2)   high penetration rates of electric vehicles. California currently boasts 40% of overall U.S. sales and now has over 100,000 EVs on its roads.

According to the report, researchers from the California Center for Sustainable Energy estimate that if half of the battery packs active in California today were to be re-purposed, they could provide up to 850 megawatt-hours of electric storage capability, and approximately 425 megawatts of capacity.  That would be the equivalent of about one-third of the capacity being called for from the utilities by 2020 under Californias recent mandate. To put this in another perspective, an 85 kWh Tesla battery can store the equivalent of almost three days of power for the average U.S. household (which uses an average of 30 kWh per day).

Companies are not unaware of this potential, and some have already begun to explore these issues in detail. Sumitomo has a 600 kilowatt, 400 kilowatt-hour array of used batteries working in tandem with a solar installation in Japan. Meanwhile, BMW is working to partner with Swedish utility Vattenfall on a second life battery demonstration program. Among other things, it will enable solar panels to combine with energy storage for EV charging. BWM is also testing batteries in a 100 kW peak shaving and load-shifting system in its Mountain View, California headquarters.

The potential for addressing the intermittent nature of renewables could be significant.  Take, for example, the infamous California ducks back slide, showing the potential impact of expected future solar penetration on Californias grid. By 2020, the mid-day peak gets squashed as a consequence of solar electrons flooding the system. But the end of the day looks ugly. From 4 PM to 8 PM the ascent up the ducks back involves dispatch of up to 14,000 MW of resources, more than doubling the amount of power needed at the base.  Used EV batteries could help make a dent in that. This impact will be less in early years than in later years, when the amount of batteries entering the market begins to climb steeply.

The future need and economic value are likely to be there. However, in order for this resource to gain traction in the marketplace and become a commercial reality, a few critical barriers must first be overcome. The UCLA/UC Berkeley report identifies a number of these, and they include:

1)   Economics and uncertainty about future battery value. Knowing the value of used batteries were known in advance could substantially enhance the value proposition of the vehicle (especially if a formal program were in place to purchase the used batteries from car owners). However, a number of factors contribute to uncertainty. Observers of the utility sector know that storage value changes depending upon the specific application in the energy market. For example, bulk storage is an entirely different value proposition from fast reacting frequency regulation. In addition, costs of repurposing batteries are unknown, and involve issues relating to liability for repurposing or recycling. This could limit the applications cost-effectiveness and reduce opportunities for financing in the secondary market.

The report suggests that demonstration projects and regulatory support could greatly help in addressing these issues. Such support would include clear assignation of liability as well as tax credits and rebates.

2)   Second life batteries are likely to enter into a regulatory miasma related to hazardous wastes, much of this at the local level.  Then there are the potential siting issues (related to fire danger, among others), and the utility regulatory environment.

The report suggests that the remedy here is to begin mapping out and addressing these issues now in a comprehensive manner to pave the way for future applications. Furthermore, regulators could set targets to include used batteries as part of the long-term storage solution.

3)   Liability issues may hamper adoption if not addressed. Existing standards and regulations governing secondary uses (which are significantly different from initial applications) are vague and could reduce the willingness of auto manufacturers to promote secondary uses.

The UCLA/UC Berkeley team recommends an initiative to clarify these issues, in a manner similar to that by which used auto parts are reused or re-manufactured. Auto manufacturers could also develop safety and performance standards. The insurance providers could also be enlisted in this effort.

4)   Lack of data in the current early stages also impedes market development. Specifically, there is insufficient information concerning current battery performance in the EV applications to build sound business models.

This issue can be mitigated with an aggressive effort among automotive leaders to share battery data.  Coupled with more available grid data from utilities, the report suggests that significant progress could be made.

The successful application of second-life batteries as a storage resource in the power grid will clearly require regulatory, industry, and utility coordination.  However, there is so much potential value to be gained in improving the economics of EVs, extending the life of a product which would otherwise be scrapped or recycled, and in providing a potentially valuable storage resource to a power grid that will increasingly need it that it seems truly worth the effort to figure this one out.

With the large number of EVs, a need for storage, and a proactive energy policy, California would seem the best place to start.  As the report concludes The state could ultimately blaze a trail that other states and countries can follow, providing innovative and economically beneficial uses for second-life electric vehicle batteries.  

Source: Forbes

SMART GRID Bulletin March 2017

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