by Tali Trigg

Japan’s Sumitomo Corporation buys used EV batteries for use in large-scale energy storage

The value proposition of electric vehicles (EVs) goes beyond switching an engine block for a battery. Part of this value lies in their ability to not only fit within, but also support society’s transition to higher use of variable renewable energy resources.

In a clean energy transition, a critical question is how can we store the energy when we do not need it, so that we can use it when we do?

One answer might be in using the batteries in EVs for energy storage. Broadly speaking, you can divide up EV battery storage in three ways:

  • First, you could use them as part of a vehicle-to-home (V2H) system, in which your home, EV, and solar panels (for example) are all interlinked using a power controller unit, largely bypassing the electricity grid itself. Nissan has already sold more than 2,000 LEAF-to-home kits in Japan, partly because of its utility as emergency backup in a post-Fukushima world.
  • Second, one could imagine a vehicle-to-building (V2B) system, akin to the example above, but in office complexes, harnessing large fleet numbers. Taken to a macro level, this could become part of a dynamic bi-directional grid with real-time pricing (a so-called vehicle-to-grid (V2G) system design) but we are arguably a ways off before this dream is widely realized.
  • Third, there is perhaps the most obvious utilization: you take used EV batteries, stack them together, and give them a second life as energy storage solutions.

This third option is pretty nifty. After all, if a Nissan LEAF gets 120 to 135 kilometers at a 100% charge, then once the battery gets old and drops to say, 70-80% after 10 years of average use, the 84-104 kilometers reduced range will likely warrant a battery replacement. So finding an after-market for these expensive batteries is almost a necessity. And now we are one big step closer.

On February 7th, 2014, Sumitomo Corporation of Japan built the “world’s first large-scale power storage system utilizing used batteries collected from electric vehicles.” The system (600kW/400kWh) includes 16 used lithium-ion EV batteries and aims to provide energy fluctuations from a nearby solar farm. Sumitomo launched the system through a joint venture “4R Energy Corporation” with Nissan Motor Co. founded back in September, 2010 to find new business models for used lithium-ion EV batteries.

12 days after Sumitomo’s announcement, Tesla Motors detailed its ambitions to build the world’s largest battery manufacturing facility costing $2 billion. Besides aiming to bring down costs for Tesla’s large batteries (85 kWh), the value proposition ties in nicely with its sister company, SolarCity, who is already using Tesla’s energy storage systems to store solar energy for both residential and commercial purposes.

Yet, other energy storage alternatives exist; even within the world of batteries. For example, sodium sulfur batteries currently act as back-up energy storage for certain facilities with critical needs, including hospitals. While not suitable for cars, they might also be able to serve as storage for variable renewable energy. While there are a slew of battery configurations out there, what makes EV batteries an interesting value proposition, is that they might start existing in ever-increasing quantities. The choice is either to recycle the battery (back into another EV, or broken down into its component materials), or to find another business opportunity, such as stationary energy storage. What companies will ultimately choose is still up in the air, but for now the technology is being tested to demonstrate its viability.

According to Kristian Handberg, author of a white paper on EVs as Grid Support, the key hurdle to creating a market in the secondary use of EV batteries is an accepted standard for testing and reporting battery condition, “If there’s no agreed way of saying how many miles a battery has on or remaining on its clock, buying and selling batteries for second-life applications will be difficult in comparison to reprocessing for material recovery.

Once this problem has been solved, Handberg notes that the broader issues relating to energy storage should be considered, “Electricity market rules must enable and incentivize the participation of energy storage. As these rules are complex and slow-to-change, it’s likely that the early second-life battery applications will be for in homes or commercial buildings for interactions that take place completely behind the electricity meter.”

Thinking out loud for a moment - given that, right now, there are approximately 350,000 EVs in the world and assuming that an average battery pack can store 17 kWh (weighted towards the lower end to account for PHEVs being part of the 350,000 EVs out there), then total battery storage capacity out there in EVs today is: 6 gigawatt hours.

That is the equivalent of powering 17,000 new refrigerator units in OECD countries. Even if we take this capacity down to 75% (due to battery degradation), that is still 12,750 refrigerators.

In other words, there is already capacity in the world today to make V2G a reality, even if the infrastructure is not quite there (yet). For large-scale energy storage for used EV batteries, there is certainly technological feasibility and potential, but the business case needs to first prove itself, especially versus automakers finding it cheaper to simply recycle the high-end batteries rather than sell them for applications like the Sumitomo project.

About the author:

Tali Trigg is an international energy and transport analyst whose expertise is in transportation issues and technologies, with an emphasis on smart growth policies, bus rapid transit (BRT), and electric vehicles (EVs). Mr. Trigg can be found on twitter @talitrigg. He was invited to contribute this guest post by Plugged In’s Melissa C. Lott.


Photo Credit: Photo of Nissan Leaf battery pack at the 2009 Tokyo Motor Show by Tennen-Gas and found using Creative Commons.