Car makers want second-life batteries used on the grid

Car makers want second-life batteries used on the grid

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Daimler unveils a 13-megawatt-hour project, while BMW batteries respond to PG&E demand response events.

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Greentech Media

rsz_daimler_second_life_batteries_xl_410_282_c1In June, German automaker Daimler AG announced the launch of a new stationary storage business, leveraging its fully owned EV battery maker subsidiary Deutsche Accumotive. The automaker sells batteries to residential and commercial customers in partnership with the German utility EnBW Energie Baden-Wuerttemberg AG.

Last week, Daimler announced an expansion of its battery business with a 13-megawatt-hour battery storage unit at a recycling plant in Lünen, Germany that uses “second-life” EV batteries — batteries that are too depleted to reliably propel a car, but still have a significant amount of remaining capacity. Daimler claims this is the largest deployment of second-life EV batteries in the world.

The project is a joint venture between Daimler AG, energy services companies Getec Energie and The Mobility House, and the environmental management company Remondis.

Daimler is working with these partners to map out the entire battery chain, including manufacturing, vehicle range and performance, stationary applications in energy markets, and recycling the batteries at the end of their usable life and feeding valuable raw materials back into the production cycle.

The 13-megawatt-hour battery system recently passed certification testing with the ISO, and is slated to begin regular operation early next year, according to Michael Mohnhaupt, president of U.S. operations for The Mobility House, a German startup founded in 2009 to support grid integration of EVs and vehicle batteries.

The Mobility House will own and operate the Daimler battery unit in the wholesale energy market. The revenues are split among all parties.

There is strong demand for high-performing batteries in Germany, where renewable energies are expected to provide 33 percent of the country’s gross electricity consumption in 2015, a large portion of which comes from intermittent renewables like solar and wind. Other countries in Europe, the U.S. and elsewhere are also looking for batteries to help stabilize their grids.

“Car companies don’t know the energy markets well and are scared because energy markets are so diversified. France is different from the U.K., which is different from Germany. Each U.S. state differs from the other,” said Mohnhaupt. “They don’t want to manage all of this on a regional level; they’re used to thinking global.”

“For automakers, the goal is to make electric vehicles cheaper, and one way to make them cheaper is to give the battery a second life,” he continued. “If the battery has a value after its life in the car, you can see additional value instead of dismantling it and paying someone for doing it.”

Automakers get to know the electric grid

Three or four years ago, car companies were concerned that EV batteries wouldn’t even last the life of their eight-year warranty, said Mohnhaupt. Now, having conducted more testing, Daimler estimates that the Lünen battery plant can operate efficiently for at least another 10 years.

Car companies are getting a lot more familiar with the electric grid. “Trust me, five years ago, no one in the auto industry knew anything about it,” said Simon Ellgas, senior advanced technology engineer at BMW of North America.

But that’s changed, said Ellgas, who spoke last month at Greenbiz’s Verge conference. Electric-vehicle manufacturers are actively exploring ways to use second-life batteries — and increasingly, new batteries — as a solution for low-cost grid energy storage.

In June, Nissan became the first EV maker to move beyond pilot-testing second-life batteries with the launch of a full-scale commercial business alongside the California-based startup Green Charge Networks. The same month, General Motors announced a new project testing used Volt batteries. And this week, Daimler announced its new battery project.

For BMW, the latest breakthrough is new data showing that its used batteries can perform reliably in demand response events. The preliminary results come from an 18-month pilot project in partnership with Pacific Gas & Electric.

BMW’s second-life batteries respond to 26 DR events

Under the program, PG&E manages 100 kilowatts of demand from BMW, made up of repurposed BMW Mini E batteries in a stationary unit and a charging program for up to 100 BMW i3 vehicles.

As in a typical demand response event, PG&E sends BMW an alert when there’s a shortage of electricity on the grid. BMW then sends a signal to each vehicle and pauses charging to reduce load. In this case, the vehicle batteries do not push any electrons onto the grid.

If the vehicles aren’t able to respond, either because they’re not plugged in or the customer declines to participate, the second-life battery system, located at BMW’s Mountain View office, kicks in to reduce load.

Since July, PG&E has sent BMW 26 demand-response events, and the automaker delivered on all of them. Depending on the time of day, the vehicles met between 10 percent and 75 percent of the capacity needed. So in every case, the system relied on the second-life batteries.

“The system is performing very strongly, and we’re learning a lot about how we want to modify a program structure to make this a larger-scale program,” said David Almeida, principal program manager of electrification and EVs at PG&E, speaking at Verge.

Under the current setup, PG&E pays BMW for its demand-response services, and the automaker transfers the payment on to the customer. Ellgas expects participating customers to make roughly $540 over the course of the 18-month pilot. So by participating in smart charging, an EV owner could expect to recoup the premium they paid for purchasing the car over its lifetime.

“We want to offset additional costs to make EVs more affordable — that’s the overall mission,” said Ellgas.

How much does a used battery cost?

While there’s money to be made using EV batteries in energy markets, savings ultimately depend on how affordable the second-life battery packs are. Right now, that remains a big open question.

“No one has a reworked battery cost,” said Dan Bowermaster, program manager for electric transportation at EPRI, recently told GTM.

Ellgas insists that automakers have an advantage over dedicated battery manufacturers. “If the auto industry is good at anything, it’s economies of scale and squeezing cost out of a system,” he said.

Arcady Sosinov, CEO of FreeWire, told GTM this spring that his startup is buying repurposed Nissan batteries for $100 per kilowatt-hour. Automakers, however, have been reluctant to reveal pricing.

Car manufacturers are still testing how well second-life batteries perform in various grid applications. They also have to come up with new processes for removing, testing and reconfiguring the batteries before putting them in the field.

Getting it right will offer a lucrative opportunity. Tesla expects up to 90 percent of its energy storage business will be selling large Powerpack batteries for grid use, as opposed to the consumer-facing Powerwall.

“We want to get a foot in the door of this market,” said Ellgas. “We are also looking into using new battery packs for stationary storage applications.”

Source: Greentech Media. Reproduced with permission.

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6 Comments
  1. Peter Campbell 5 years ago

    Good to see recognition that pausing vehicle charging is as good for the grid as having an instant power source.

    • Matt 5 years ago

      Yeah that’s really cool. Interesting that the customers can get paid for it too.

  2. Miles Harding 5 years ago

    Controlled charging could be extended to all sorts of deferrable loads from water heaters to pool pumps to airconditioners, even street lights. Deferral already occurs manually in many government buildings.

    This may result in two arms of a demand response;
    one of reducing those deferrable loads,
    and supply from battery equipped home and business power systems.

    For the EV to be part of this, first, a sufficient number of them have to be sold, something that Australia is doing dismally at present**.

    Our experience is that EV batteries have a working life of at least 8 years, so Daimler’s sizeable battery store would have to be composed significanly of recovered batteries from the Mini-E experiment instead of end of life units.

    Eventually, I would have envisioned EV battery repurposing to be a local industry, mating an ex-car pack to an inverter-charger and a cabinet. Possibly, the pack is disassembled to cell block level and re-formed into a handy household size. The householder-motorist is likely to get better value from recycling their own battery than selling it back to the car maker.

    ** A charge rate management standard would be good to lead with so that the fleet is equipped when it becomes important.

    (edit: post rewritten)

    • Ian 5 years ago

      Don’t pooh-pooh repurposed EV batteries quite so quickly, there are plenty of EV’s in Europe, Aka, Norway, these could always be exported to Australia or to some other overseas destination. Really, any idea that helps to move along battery storage has got to be a step in the right direction.

      I don’t know why our government with its considerable financial clout doesn’t support storage options. Here’s the thing: renewables like wind and solar are intermittant, whereas coal is continuous. Once built, solar and wind cost virtually nothing to run, or to restate this, the total cost of a renewables plant is independent of the amount it produces. An idle windmill costs the same as one spinning furiously. Coal however, must run continuously to get the best value for the energy produced. Now if a renewables plant produces as much power as the coal plant for a third of a day, the cost of the coal energy rises by 50%. To keep their beloved coal plants burning economically, storage of the excess power is needed. So, for 1 MW of coal displaced for a third of a day by renewables, 8 MWH storage is required. What I’m trying to say is storage is the key to the medium term survival of coal. Of course , the corollary is this, renewables need storage to provide continuity to the electricity supply. For the FF camp and the RE camp to meet, storage has got to be the middle ground. Pumped storage and once-through hydro is already available and should be promoted, I think, to substantially take on this role.

      The concept of flow batteries is just perfect for edge of grid or remote applications. These things are insensitive to the quality of power supply for charging and can have huge capacities for the power outputted. Australia has not been backward in developing these. I think our government will, in the future, be judged if they let the likes of Redflow, slip out of our hands and take their manufacturing business elsewhere. Remember who started the Chinese solar panel ball rolling! Some Ozzy-trained Chinese dude.

      We have so many home grown storage options ,why fuss with foreign made batteries? The wish is that the nincompoop networks recognise large scale hydro-type storage and medium scale flow battery storage and adjust their tariffs to suit. Here is a proposal for such a tariff structure. An add on meter which can act as a ‘virtual storage’ . The customer could hire or buy as much or as little storage as they want. Excess solar or other power could be loaded into ‘storage’ and then drawn out at any time for free. The network would provide a ‘virtual battery ‘ service. They could still charge like wounded Bulls for power drawn from the network beyond the ‘ virtual battery ‘ capacity and pay peanuts for any power transmitted to the network that is not ‘ stored’. The cost of the virtual battery could be kept competitive with real home-installed batteries. The revenue from selling or renting virtual storage space could be used to develop hydro or other large scale storage options.

      This is a hyperthetical example of a tariff with virtual storage: 22c per KWH imported 5c/KWH exported, $1.20 per day for 10 KWH Virtual storage. A house might consume 30 KWH a day. It could have a 5KW solar array producing, on average, 25 KWH a day. With a bit of load adjusting they could consume15 KWH in the daylight hours and ‘store’ 10KWH for the night. The shortfall they would import at the 22c/KWH rate. This would closely match a real behind the meter battery array but be considerably cheaper to the customer. The network for its part will retain customers.

      Brisbane has a pumped storage facility at lake Wivenhoe that is rated at 500MW and 5000MWH of storage. In the Virtual storage scenario above the value of this storage would be $1.2 x 5000 000 KWH/ 10 KWH = $ 600 000 a day or $220 million a year. Paying this as 5% interest could buy an investment of $4.4 billion. The estimated cost of pumped hydro is less that $200/KWH and these things will last as long as the pyramids. So, our $ 4.4 billion can buy 22 000 MWH of pumped hydro. Wivenhoe pumped storage used in this way could pay for 4 more Wivenhoe sized pumped storage schemes. What say you renew economy denizen’s, do we have a winner. All you need is two tariffs one with the standard fixed fee for those Balooka’s who want to install an American made battery and one for ‘virtual storage’ using our home grown large scale storage; and a little electronic black box that behaves like a battery.

      To simplify matters the networks needn’t even bother with a ‘ virtual storage’ black box they could charge $40 a month for a payment of 22c/ KWH for net power exported up to a value of 300 KWH a month after that the payment would drop to the usual 5c/KWH. This could be counted as the virtual storage tariff option.

      • Ian 5 years ago

        This idea is diabolical, I think I’ll send it to Malcolm Turnbull’s office and to Grant King of Origin. Penalise those that have solar and are considering behind the meter storage with fixed tariffs as they are already doing, and offer those with solar a ‘ grid based storage option at very competitive rates to off grid solar and storage.

      • Miles Harding 5 years ago

        Rewrote my original post.

        I am already using a repurposed EV battery to run my house, part of an EV conversion project that morphed into an i-Miev.

        There is no question that this will work, but we have (almost) no EVs in Australia and a slow uptake in prospect.

        I think you are correct in that the networks and retailers need a new plan, one that makes the customer part of the solution instead of simply an electricity meter. Real-time metering for all with demand response from behind the meter would revolutionise the way the operators run their networks, likely eliminating most of the “upgrades” currently being planned.

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