Lithium batteries are enabling the global energy transition to electricity in many industries and are experiencing explosive growth in demand across various applications and geographies. As multiple gigawatt-hour factories launched in the last few years start to deliver new batteries at scale, a second-life battery economy emerged and is dynamically growing.
The lower price of a repurposed lithium battery pack comes with high sustainability benefits of avoiding emissions from the energy required to produce new batteries, delayed recycling and diverted waste. The key challenge to repurposing batteries lies in trust – in absence of a mandatory digital battery passport, there is a lack of transparency into the first-life application of non-new batteries.
By officially approving a vendor of battery storage systems running on repurposed lithium batteries, the City of Phoenix is building trust in the second-life battery energy storage. The success of a pilot project laid the foundation for scaling of battery repurposing in electrification projects by other departments and municipalities.
Cost of new vs. used
A significant rise in the production of lithium-ion batteries for electric vehicles, power storage for renewable energy generation at utility scale, and multiple other uses formed a large and dynamically growing second-life battery market. Unlike earlier generations of batteries, lithium cells and packs have a much longer useful life and change their performance over their life cycle.
It is always a good idea to think about reusing batteries before recycling, but a good business foundation is non-negotiable. Repurposed batteries must not cost more than new ones. In fact, they need to be cheaper by at least 30% to 40%. Having an overseas partner with lower labor costs can make or break the deal in some cases.
Another important calculation in repurposing vs. recycling is the price of black mass and recovered materials, and the cost of extraction. For example, lithium ferro-phosphate (LFP) batteries provide less output of valuable metals, compared to nickel-manganese-cobalt (NMC).
In fact they have negative recycling value, which meant you have to pay to recycle them. Which drives the value of repurposing end-of-life LFP cells (with at least 60% SOH), and prolonging their useful life for as long as possible. The value of recovered materials from NMC cells recycling can in some cases be greater than resale value for new applications.
However, the greatest challenge in the second-life battery economy is the lack of transparency and standards. This new market requires seller validation and new trust mechanisms to reduce the cost of testing and re-certifying of cells and provide a seamless flow of batteries from one application to another.
Official vendor
The Office of Environmental Programs at City of Phoenix has developed a sustainable purchasing policy to promote purchasing products and services that have a reduced impact on human health and the environment when compared to competing products or services that serve the same purpose, while remaining fiscally responsible (starting with traditional factors, such as product price and performance).
Bluewater Battery Logistics was chosen as an official vendor of repurposed and recycled lithium forklift batteries. After testing and evaluation of the batteries end-of-life cells are sent for hydrometallurgical recycling. EV batteries are retired after they drop below 80% state of health (SOH) and can find a second life in new applications.
“Bluewater Battery evaluates a few variables to find the optimum way to repurpose the batteries for a second life and minimize the environmental impact,” explains Steve Feinberg, CEO at Bluewater. “We look at the condition of the cells, geographical location for minimal shipping, and our partners’ expertise to repurpose batteries.”
The batteries’ new lives in secondary applications depend on how they fare in tests of voltage, Ah capacity, and various SOH parameters.
The story of one 80V 360Ah LFP forklift battery began in a Hyster E55XN Class I sit-down lift truck, operating in a packaging facility of a fruit-producing company in the state of Washington.
Our demo battery came back with many years of life left in each cell, but with no chance to be used in a new forklift battery again.
Fortunately, Bluewater found a second-life application in the solar array battery storage, a part of the pilot project of the City of Phoenix. “Repurposed batteries are a perfect solution [for battery storage systems], cutting costs and contributing to the sustainability and our circular economy goals,” says Amanda Jordan, circular economy project manager for the City of Phoenix.
Jordan’s team successfully completed a pilot project to use remanufactured lithium batteries for solar panel energy storage to power lighting in South Mountain Park in summer of 2024.
The major concern has always been the batteries’ resistance to Arizona heat but the LFP lithium cells in energy storage for a solar array demonstrated adequate resilience and are expected to work reliably for another 10 years. “The positive outcome of this project has paved the road to the mass usage of second-life lithium cells as energy storage for the renewables (in Arizona),” Amanda commented.
Repurposed batteries help achieve one of the Circular Economy Projects’ KPIs – waste reduction. “This is a good example of a secondary stream of waste diverted from landfill, and is also a cost saving mechanism, contributing to our sustainability goals” said Phoenix Chief Sustainability officer Mark Hartman.
Proven business case
The total of 80 kWh of battery energy storage was deployed in 5 locations, including 4 solar sites and one emergency power back-up. 1.9 tons of CO2E was saved by solar generation (compared to Arizona grid average emissions), and 13.5 tons CO2E were avoided from manufacturing of replaced new batteries.
What is much more important is that the business case for second-life battery application was proven, and a verified vendor of repurposed batteries is endorsed by the City of Phoenix, based on the validity of the results and feedback from the users.
Future benefit
Energy transition, which plays a vital part in fighting climate change, is enabled in many ways by lithium battery technology. Repurposing lithium cells at the end of their useful life from their first-life application to less-demanding second-life does not just divert gigantic amounts of waste. Dynamic second-life battery market fuels the creation of new businesses and reduces the price of solar energy, further accelerating the adoption of renewables.
Max Khabur is marketing director at Bluewater Battery Logistics a U.S.-based operator in the second-life battery market. He previously led marketing at OneCharge Lithium Batteries, and was elected Chairman of the Advanced Energy Council, representing a group of companies, members of the MHI.org (Materials Handling Industry) Association.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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