Second-Life Batteries: Comparison
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The adoption of electric vehicles (EVs) is increasing due to governmental policies focused on curbing climate change. EV batteries are retired when they are no longer suitable for energy-intensive EV operations. A large number of EV batteries are expected to be retired in the next 5–10 years. These retired batteries have 70–80% average capacity left. Second-life use of these battery packs has the potential to address the increasing energy storage system (ESS) demand for the grid and also to create a circular economy for EV batteries. The needs of modern grids for frequency regulation, power smoothing, and peak shaving can be met using retired batteries.

  • second-life batteries
  • retired battery power grid applications
  • battery degradation

1. Introduction

Electric vehicles (EVs) are replacing internal combustion engine (ICE) vehicles due to the calls for CO2 emissions reduction and fighting climate change. The number of EVs around the globe is set to increase from 30 million in 2022 to 240 million in 2030 [1]. Moreover, total EV sales are expected to reach 25 million in 2025 and over 40 million in 2030 [1]. The battery packs used in the EVs are retired after the loss of 20% or 30% of capacity (Ah) because they are no longer suitable for the energy-intensive EV operation. Globally, the combined capacity of these retired batteries is expected to increase to an excess of 200 GWh by 2030 [2]. On the other hand, the demand for the battery energy storage system (BESS) for the grid is expected to grow to 183 GWh by 2030 [3]. The majority of retired EV batteries are lithium-ion (Li-ion) batteries that can be either disposed of, recycled, or repurposed. Disposing of huge quantities of battery packs is harmful to the environment and also results in the loss of chemical elements. Recycling Li-ion batteries is still a developing industry facing economic, logistical, and regulatory challenges to its economic viability [4][5]. Repurposing the battery packs for second-life applications is a viable and sustainable option.
Various terms that can be used for the secondary use of retired batteries are “second-life”, “second-use”, and “reuse” [6]. Second-life batteries (SLBs) can be used for a variety of applications. For example, the retired batteries can be used to provide charging services for an EV charging station [7][8]. However, their use as stationary battery energy storage systems (BESSs) is more common. Repurposing retired batteries for application as second-life-battery energy storage systems (SLBESSs) in the electric grid has several benefits: It creates a circular economy for EV batteries and helps integrate renewable energy sources into the electrical grid. Figure 1 shows the life cycle of a retired battery pack when used for a second life in the grid.
Figure 1. Life cycle of an EV battery pack.

2. Second-Life Battery Market

The main types of SLBs in the market are lead-acid batteries, nickel metal hydride (NMH), and lithium-ion batteries, whereas the main battery sources are two-wheelers, electric buses, and EVs. The economic viability of retired batteries is an important factor in deciding their use in the grids. The SLB market is relatively new and depends on a lot of variables. The market is immature and faces steep competition from recyclers due to the huge demand for raw materials like cobalt, nickel, and lithium by battery manufacturers who are looking to cut costs. SLBs also face competition from flow batteries, which can be the preferred choice for ESSs in the grid. The gigantic global supply of retired batteries (200 GWh) by 2030 will have significant effects on the future costs of SLBs [9]. In [10], the authors considered the SLBs from three different EVs and worked up the cost to be USD 825/kWh and an additional USD 100/kWh and USD 1000 for capturing balance-of-system (BOS) costs. The uncertainties in calculating the market price were addressed in [11], where a comprehensive framework for estimating SLB cost by calculating the battery salvage value (S) on retirement while considering the cost of fresh batteries (𝐶𝑛) discounted by a health factor (𝐾ℎ) and a used product discount factor (𝐾𝑢) and refurbishment cost (𝐶𝑟𝑝) is given by (1)
 
where salvage value (S) is the maximum of the appreciated cost at the time of the second-life application or when sending them for recycling (C𝑟𝑐). A techno-economic model for PV plus SLBESS in California using 2017 utility prices identifies two revenue streams for the system. The first is by selling the power to the utility by storing energy in SLBESSs at the time of low prices and selling at the time of increased prices, and second, by selling the capacity credits [12]. The benefit–cost ratio is calculated by (2)
 
The above study demonstrates that a system incorporating state-of-charge limits within the 65–15% range significantly extends the project’s operational life beyond 16 years. This projection is based on the assumption that a battery is considered to have reached its end of life at 60% of its original capacity. In comparison to a project utilizing a new battery with state-of-charge limits set between 85 and 20%, the economic viability of a second-life project becomes more favorable, provided the second-life battery costs are less than 80% of the cost of a new battery.

2.1. SLB Players in the USA Market

Long-duration energy storage requirements in the grid are being addressed by several startups in the USA. ‘B2U Storage Solutions’, based in California, is a provider of large-scale ESSs made of retired batteries. San-Diego-based ‘Smart’ won a $10 million grant from the Department of Energy (DoE) to develop long-duration ESSs made of SLBs [13]. Another California-based startup, ‘Rejoule’, is working to repurpose used batteries. Their product BATTSCAN is a fast, reliable, and easy-to-use diagnostic tool for retired batteries. For battery repurposing, it speeds up test time from 6+ h to 10 min.

2.2. SLB Players in the Global Market

The second-life battery market is rapidly expanding outside the United States as companies around the world are recognizing the potential of this technology to reduce waste and extend the life of valuable resources. In Europe, companies like Zenobe [14], Relion, and Second Life Batteries [15] are leading the way in developing and deploying SLB solutions for a variety of applications, including grid storage, backup power, and electric vehicles. In Asia, Hitachi is making significant progress in this area. The Asia–Pacific region, including Japan, China, and Korea, has one of the highest penetrations of EVs and a greater supply of SLBs. Companies like Fortum, ION Energy Inc., and Enel X are working on the reuse of restored batteries [16]. These companies are also taking advantage of government policies that are supportive of the development of the second-life battery industry. For example, the European Union has set ambitious targets for the recycling of lithium-ion batteries, and the Chinese government has provided subsidies for the development of second-life battery projects. These policies are helping to create a favorable environment for the growth of the second-life battery industry outside the United States, and they are likely to play a key role in driving innovation and investment in this area in the years to come.

3. Applications of Second-Life Batteries in Electrical Grids

The complexity of the modern power grid has increased manyfold on the consumption side as well as the generation side. On the consumption end, the demand response and intelligent load management make the load a lot more dynamic than before [17]. With the increase in intermittent renewable power sources such as wind and solar in the generation mix, there is more uncertainty in the system. There is a need for backup power sources in cases where the supply does not meet the demand. Moreover, there is a need for a storage solution when the supply of power is in excess of the load. The provision of conventional power sources, such as thermal generation, as a backup is costly as well as contrary to global carbon reduction goals. The use of energy storage systems (ESSs) for the electrical grid, therefore, has increased lately for the integration of renewable energy storage. Large-scale battery storage is expected to reach 12,000 MW in the USA, with California Independent System Operator (CAISO) leading among the utilities, followed by the Electric Reliability Council of Texas (ERCOT) [18]. Fitzgerald et al. identified 13 different application areas and three different stakeholders for the energy storage system in an electrical grid. The three stakeholders are transmission system operators (TSOs), utility companies, and consumers [19]. Many works have reviewed the applications of fresh BESSs [20][21] and other types of ESSs [22][23][24] in the power grid. The SLB packs for stationary ESSs in the grid are a relatively new concept that is not only cheap but can also generate profit while promoting the circular economy of EV batteries. Various power grid services for SLBs are discussed below.

3.1. Power Smoothing

Renewable energy sources like wind and solar are highly intermittent in nature. They can cause a lot of uncertainty on the power generation side and need to be supported by backup generation, which can be costly. For integrating the intermittent sources in the grid, SLBESSs can provide power smoothing services. The sizing of SLBs is performed in [25] for power smoothing or variability smoothing. A mixed least-squares estimator ramp-rate-compliant (MLSERRC) algorithm smooths the plant power output, followed by an optimization algorithm that provides a charging and discharging profile for SLBs.

3.2. Peak Shaving

The electrical load of any utility or microgrid varies greatly over the time of the day and also throughout the seasons of the year. The highest amount of load is called load peak. The utility must be able to supply power to the load at all times, which means that the generation will vary throughout the day. Also, the designed capacity of generation needs to be according to the peak load, which increases cost since the generating plants are not running at their capacity throughout the day. SLBESSs can provide peak shaving service by providing the power at the peak hours and hence reducing the amount of peak load capacity. In [26], SLB packs from different EVs are tested for various grid services that include peak shaving. Standard hardware tests are performed along with a few analytical methods on various battery packs, including the 2019 Tesla Model 3 SR+, 2018 Chevrolet Bolt, 2015 BMW i3, 2012 Nissan Leaf, and 2012 Lishen EV-LVP. The study concluded that SLBs of various makes differ greatly under grid operation. Moreover, one SLB pack can be very different from another even if they both are made from the same chemistry. This is because the first-life use of two different batteries has a lot of bearing on their second-life use.

3.3. Energy Arbitrage

Exchanging power from the utility based on the electricity tariff to maximize revenue is called energy arbitrage. SLBESSs can be used to maximize revenue by using energy arbitrage. In [27], a PyBaMm (python battery mathematical modeling)-based degradation and optimization of SLB cells is performed against Michigan’s DTE utility tariff. The peak shaving against the summer’s time of use (ToU) tariff is classified as the best use case for the particular region and geography. In [12], the authors developed a techno-economic framework for a PV and SLBESS system and calculated that an SLBESS can be cheaper than a fresh ESS if the SOC window is maintained between 80 and 20%.

3.4. Frequency Containment Reserve (FCR) Service

The frequency in the power system is a sensitive parameter that must always be maintained at a particular value. There is a minimum and maximum threshold that is allowed by various system operators depending on the country or the geography. The ancillary service to maintain the frequency within this threshold is called frequency control, frequency containment reserve, or frequency regulation. SLBs are tested for FCR for a Czech Republic case, and its technical and economic feasibility framework is evaluated [28]. The return on investment (ROI) varies between 8% and 21%. Six different EV batteries of varied chemistries were experimentally tested in [27] for frequency regulation (FR) service. The authors found that energy efficiency in batteries takes precedence over energy density for frequency regulation services.
Apart from utilities, the SLBESS for local energy communities is also a viable option. A local energy community is one in which a community’s energy needs are met locally without dependence on the utility. A techno-economic framework for SLBESSs for a local energy community is discussed in [29]. Table 1 lists the summary of research papers for SLBESS operation in the electrical grid.
Table 1. Summary of works on SLB applications in power grids.
Grid Service Type Method/Algorithm Hardware/Software-Based Study Results
Power smoothing SLB sizing using MLSERRC algorithm Software based One-year current profile of SLB cell [25]
Peak shaving Comparative assessment of battery performance using analytical techniques Hardware-based testing Performance ranking of 5 different battery packs [26]
Frequency regulation Cycling of battery in experimental setup Hardware based Thermal response and ranking of EV batteries [27]
Frequency containment reserve Techno-economic framework Software based Economic parameters and results [28]
Energy arbitrage and peak shaving PyBaMm-based degradation and optimization in Pyomo Software based Cell degradation and optimized revenue [30]
Revenue generation by arbitrage and selling capacity credits Technoeconomic framework Software based Cost–benefit calculation [12]

References

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