From EVs to Energy Storage: Opportunities in Second-Life Battery Applications

General tendencies – opportunities for second-life batteries

Electric vehicle (EV) batteries, typically lithium-ion, degrade over time. Once their State of Health (SOH) drops to ~70-80% of their original capacity, they’re no longer optimal for vehicle use – but they can still be valuable in second-life applications such as stationary storage (Figure 1).

According to McKinsey, the supply of second-life batteries is expected to be at similar levels to utility-scale storage demand by 2030 (Figure 2).

Examples of projects using second-life batteries

• PIONEER: Airport Sustainability Second Life Battery Storage. 2.5 MW/10 MWh energy storage solution at FCO airport in Rome. (https://www.adr.it/web/aeroporti-di-roma-en/pioneer-project)
• Port of Alicante. Three second-life battery systems of 7 MW. (Port of Alicante to rent batteries made from used EV devices – Energy Storage)
• Porsche Leipzig project. 5MW/10 MWh system made of 4400 battery modules from Porsche Taycan. (Porsche reveals second-life BESS at its Leipzig plant – Energy Storage)

Challenges of second-life batteries

• Cell quality & standards
  • EV batteries degrade differently based on manufacturer, chemistry, usage history, temperature, charging habits, etc.
  • Lack of standards across battery formats, chemistries, and architectures.
  • Compliance with safety standards (UL, IEC, etc.).

• Higher complexity of O&M
  • Differences in capacity and internal resistance among cells/modules complicate corrective maintenance (cell balancing).
  • Second-life batteries have higher internal resistance, which might lead to a more probable event of overheating.
  • Original battery management systems (BMS) are typically designed for the EV, not for stationary storage applications. This could lead to the inadequate monitoring or control and cause safety and performance issues.

Benefits of second-life batteries

• Second-life batteries offer a strong cost advantage. Even with recent declines in lithium prices, new lithium iron phosphate (LFP) battery modules still cost between $90 and $120 per kWh, whereas retired batteries can be acquired for as little as $0 to $60 per kWh – a cost difference of 2 to 6 times. (Second-Life Batteries – The Next Big Opportunity | LinkedIn)

• Helps meet EU Circular Economy and Battery Directive goals. Improved resource efficiency. Reduced greenhouse gas emissions. Delayed recycling energy costs.

Take away

Second-life batteries represent a compelling example of the circular economy in action, offering both environmental and economic value. In addition, second-life batteries present a promising opportunity in long-duration energy storage applications. These projects, while capital-intensive, typically provide energy arbitrage and peak shaving services.

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For more information please contact Battery Energy Storage Program Manager Algirdas Dučinskas, [email protected]