Reutilizing EV Batteries might disrupt the competition for long-term energy storage solutions

In a groundbreaking move, JB Straubel, the former Chief Technology Officer of Tesla, unveiled a new project at Redwood Materials, a lithium-ion recycling company, in June. This project, if taken mainstream, could potentially revolutionize the arms race for long-duration storage and significantly improve the chances of running the economy on a largely renewable grid.

Redwood Materials is currently quoting a lowest price of approximately $120 per kilowatt-hour for a 24- to 48-hour energy storage solution using repurposed lithium-ion batteries. This is a significant breakthrough, as only a handful of companies, such as B2U Storage Solutions and Element Energy, had previously built large-scale second-life storage plants.

The used battery storage project by Redwood holds 63 megawatt-hours of energy storage, making it bigger than any novel battery installation in the U.S. This assemblage can store enough clean power to run a small on-site data center, rain or shine, night or day.

However, the discount offered by used batteries may prove tenuous as new lithium-ion packs get ever cheaper. The sector of second-life battery development has a lot of work to do to convince customers and financiers that the gently used battery packs can be trusted to hold up over years of service.

ESS, a company that developed an iron-based flow battery in 2011, previously sold Energy Warehouses with a bit over six hours duration. However, recently, the company announced a strategic shift to the 10+ hour product. ESS's board members had to inject more capital last month to sustain the company through this shift, and agreed to forgo personal compensation for the year.

The new project at Redwood involves arranging old electric vehicle battery packs across a desert and hooking them up to an adjacent solar field for energy storage. This innovative approach could provide a viable solution for long-duration energy storage, a challenge that has been plaguing the renewable energy sector.

Redwood's used battery storage solution is claimed to be the lowest-cost storage solution compared to other long-duration energy storage technologies, including thermal storage, pumped-hydro storage, and flow batteries. However, technologies like pumped-hydro and compressed-air energy storage, which work for longer durations, are huge, billion-dollar infrastructure projects that are not commonly built in the U.S.

On the other hand, flow batteries, which store energy in tanks of liquid electrolytes, have been struggling to gain traction in the U.S. compared to China, where they benefit from government favor. A VC-funded company, Form Energy, aims to sell iron-air batteries below $20 per kilowatt-hour when its factory reaches full production scale.

Evelina Stoikou, head of battery technology and supply chain research at BloombergNEF, states that lithium-ion storage systems with longer durations require more battery cells, making them less economically competitive compared to emerging long-duration storage alternatives.

This development in second-life battery storage could be a game-changer in the renewable energy sector, providing a cost-effective solution for long-duration energy storage. As the project progresses, it will be interesting to see how it impacts the market and the transition towards a largely renewable grid.

Reutilizing EV Batteries might disrupt the competition for long-term energy storage solutions