EV BATTERIES’ SECOND LIFE MEANS MORE LIFE FOR NEW ENERGY

PHEV/EV Li-Ion Battery Second-Use Project
Jeremy Neubauer and Ahmad Pesaran, April 2010 (National Renewable Energy Laboratory)

THE POINT
With images of oily ruin from the Gulf of Mexico breaking our hearts and turning our stomachs and the car-driving world at the edge of an electric moment and a plug-in paradigm shift, more and more attention is on the batteries that will make or break this transportation revolution.

The lithium ion (Li-ion) battery is the state of the art. It is the safest, most energy-dense product the auto industry can find that is not so expensive as to make battery electric vehicles (BEVs) unaffordable. Yet it comes at quite a cost, perhaps $1,000 per kilowatt-hour. A potent battery pack can cost more than some economy vehicles. Carmakers would dearly love to find a way to beat that price burden.

Shai Agassi’s breathtakingly ambitious Better Place concept is surely the cleverest way around the cost of the battery so far devised. Better Place will sell cars but lease the batteries on cell phone-like usage plans. That, and the Better Place ambition to build an international chain of battery fast-switch stations, may facilitate a lot of electric vehicle sales but does not solve the battery's price problem, it just shifts it to Agassi.

There is one great hope on the horizon. It would make a Li-ion BEV battery an investment of sorts. Agassi has mentioned the idea as a possibility on which his company’s financial viability could hinge.

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Today’s Li-ion batteries are expected to last 8-to-10 years. At that point, they will no longer hold a full charge but will only be capable of about 80% of their nameplate storage capacity. As vehicle batteries, they will require replacement. But 80% storage capacity might be very, very useful to somebody - somebody who might pay for that storage capacity and, by giving the battery resale value, defray the high purchase price.

In PHEV/EV Li-Ion Battery Second-Use Project, Jeremy Neubauer and Ahmad Pesaran of the National Renewable Energy Laboratory (NREL) describe the experiment they are undertaking to see just how capable and valuable today’s lithium ion BEV batteries will be when they are done with their life in transportation and begin their second life in stationary storage.

If Neubauer and Pesaran prove the hypothesized potential to be real, it could represent not only a way to affordability for BEVs but the answer to New Energy’s hardest question: How can there be large-scale affordable storage?

In the foreseeable future, warehouses of second-hand Li-ion batteries could potentially be storage facilities into which solar arrays and power plants and wind installations drop excess and off-peak generation until grid managers need and call on it, giving second life to the batteries and much more life to the variable New Energies.

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THE DETAILS
Just in time to offer a sense of some relief from what is happening because of oil in the Gulf of Mexico, the attraction of BEVs – Plug-in hybrid electric vehicles (PHEVs) and full electric vehicles (EVs) – has never been greater. They are the answer to oil dependence, will stop the flow of U.S. money to oil regions sometimes hostile to U.S. values and can have a major impact on global climate change.

Though car manufacturers are notoriously proprietary with specifics, it is thought the large-capacity lithium ion (Li-ion) battery packs being used or designed for the coming first generation of all-electric vehicles will cost in the $20,000-to-$30,000 range and the smaller-capacity packs will cost in the $5,000-to-$15,000 range.

The current estimate of a Li-ion battery’s life of 8-to-10 years is based on a conservative estimate of 3,000 100-mile charge cycles and an average 15,000 miles per year use. At this point, it is estimated the battery would only hold a charge under 80% of its nameplate capacity.

Second applications for Li-ion batteries could defray the cost-burden of the battery by giving it resale (or trade-in) value.

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Hypothesized battery second use applications include:

(1) Holding any form of electricity generated for the grid at lower-cost, off-peak time periods for use during higher-cost peak periods. This would be especially useful for nuclear power plants which can only run at full speed.

The economic potential of this use is so great and so immediate – assuming an economic source of storage like re-used batteries – that entrepreneurs have long been actively in search of a way to do it.

(2) Holding electricity generated by the variable New Energies for use when they are not generating in the immediate vicinity. This is termed “firming” because grid operators feel the reliability of the New Energies is firmer when there is stored electricity available for emergency needs.

The reliability of the variable New Energies, especially wind and solar, is enhanced (a) when larger power generating regions are linked by the grid so that if solar is disrupted locally by a temporary cloud cover or the wind dies off at one location, another solar power plant or wind installation at another location can be accessed and (b) when forecasting is used to predict such variable events and reserves are readied to meet the anticipated need.

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(3) All sources of grid electricity are variable to a lesser or greater extent. Nuclear, coal and natural gas power plants must be taken off line periodically. Nuclear has outages. Transmission can go down. The New Energies’ variability is more familiar because sun and wind patterns are well-known. In all these cases, large and affordable sources of stored energy enhances the quality of service and reliability provided by utilities.

(4) There are many applications for off-grid use of stored power, too. At remote installations, it can serve as vital backup power for solar, wind or a combination of the two and for gas or diesel generators. At remote locations such as on offshore oil-drilling platforms and in the rural villages of under-developed nations, solar panels often generate power that is then battery-stored.

(5) Several transportation situations could make use of secondary battery pack storage charged while the vehicle was running. These include (a) overnight down-time long-haul heavy transport vehicles housing drivers or using trailer-power for heating or cooling, (b) remote location utility and recreational vehicles doing tasks that require power, and (c) public transportation systems that need to supply passengers with lighting and cooling/heating in the event of a main system shutdown or power failure.

Battery second life has been hypothesized since at least the 1990s revival of the concept of electric personal transport. Batteries have always been the limiting cost factor for BEVs and second use has always been a prevailing theory to offset the cost.

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Few significant tests have been done but all theories and tests point to a similar set of barriers: (1) The degradation of second use batteries is uncertain; (2) Refurbishment and integration of batteries is potentially expensive; (3) Other storage solutions, such as pumped hydro, may be more cost effective; (4) There is no market mechanism or regulatory mechanism for handling large scale battery storage; and (5) Perceptions of used batteries could discourage use.

The renewed and mounting enthusiasm for BEVs is driving a renewed interest in battery second life but there are almost no BEVs presently in use and even fewer used up Li-ion batteries and no second use programs have been implemented.

There is also a higher value than ever before in storage for the variable New Energies to (1) meet Renewable Electricity Standards (RESs), (2) meet peak demand loads, (3) stabilize electricity supply and increase delivery reliability on grids managing ever more diverse mixes of sources and ever more complex efficiency programs.

With the new investment in battery technology innovation and battery manufacturing for the many BEVs coming to showrooms later this year and next year, economies of scale and advances in performance will likely negate many of the long-standing barriers to the battery second life concept.

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Academic institutions such as UC Berkeley, UC Davis and the Rochester Institute of Technology have ongoing projects to prove Li-ion battery second life capabilities. It is also being developed in the private sector by Nissan/Sumitomo, Enerdel/Itochu and Better Place/Renault-Nissan.

Seeking to cut PHEV/EV battery cost, DOE-NREL hit on the second life concept and is now launching its Second Use Project. The objective: “Identify, assess, and verify profitable applications for the second use of PHEV/EV Li-ion traction batteries to reduce the cost and accelerate adoption of PHEV/EVs…”

Phase 1: It will begin by assessing the merit of second life applications and strategies, specifying those that are of highest value and impact and obtaining accurate profiles and economic data for them.

Questions for each application: (1) How does a battery retired from automotive service perform when subjected to the second use profile? (2) What are the projected revenues and costs? (3) What are the safety concerns and liabilities? (4) How do the performance, life, and cost of a second use battery compare with those of competing technologies? (5) What are the regulatory issues or other barriers specific to this application? (6) Is the scale of this application well suited to the expected availability of retired PHEV/EV batteries?

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Following assessment, tools will be developed. Multiple automotive scenarios will be considered, performance will be modeled, and net present value for each scenario will be calculated in a $/mile valuation. It will account for future revenue and anticipated costs.

Sample considerations: (1) It is a cost to the car’s owner when the battery is replaced, (2) batteries may not degrade linearly, and (3) new batteries may be a better economic proposition than used ones.

The tools will be used to calculate a battery cost discount for its second life value.

Questions to be answered: (1) What is the total lifetime value of the battery, in both its automotive and second use applications? (2) What is the sensitivity of total lifetime value to use history and other parameters? (3) What is the uncertainty in the complete analysis?

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Phase 2: Verifying performance in practical trials. DOE-NREL will acquire aged Li-ion batteries, preferably from field-tested pre-production PHEV/EVs. Accelerated aging in labs is acceptable but provide less accurate data. The study will focus exclusively on mass-produced cell and pack designs.

Long-term testing will follow. It will subject the aged batteries to the expected use and conditions to verify performance and degradation valuations. Lab tests will control for variables. Field tests will conclude the process.

Phase 3: Implementation will begin with the dissemination of findings to industry and markets. NREL will then develop design and manufacturing standards and identify needed regulatory changes.

NREL is currently seeking partners and proposals for the project.

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QUOTES
- Cready, et al., Technical and Economic Feasibility of Applying Used EV Batteries in Stationary Applications, 2003: “Overall, the concept of EV battery reuse appears to be a viable one. The study team did not come across any insurmountable technical barriers to the implementation of a second use scheme…While there are no technical .show stoppers,. there are some issues that will have to be dealt with before an EV battery second use scheme can be implemented…In spite of the costs involved in the refurbishing process, EV battery reuse looks like it could be an economically viable concept…”

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- Electric Power Research Institute (EPRI), Advanced Batteries for Electric Drive Vehicles, 2004: “…EPRI has estimated the battery salvage value as the projected new module cost at time of salvage multiplied times the percent of life remaining in the battery times the original kWh of the battery…”

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- Plug-In Hybrid Electric Vehicle Research Center/University of California, Davis, Request For Proposals/Second Life Applications and Value of “Traction” Lithium Batteries, March 30, 2010: “In order to decrease the cost and risk that auto manufacturer’s take on to produce a PHEV or EV, and to promote the growth of the battery market, one potential source of value is to identify and evaluate potential reuse strategies for the battery. The idea behind secondary battery use or the “second life” of the battery is that the battery will be removed and resold or repurposed for a second life application after its first life in the vehicle, either at the end of the vehicle life, or more likely at some prescribed optimal economic and technical life stage. For example, automotive batteries have much greater power and energy demands than other applications; automotive batteries may have to be retired when they still have 70-80% of their capacity. Such a battery has an excellent chance of having valuable second lives in other applications when it is removed from the vehicle…”