General Motors Co. will join a power-grid company to study what happens to car batteries once they've driven their last mile.
No one knows yet, because the first wave of electric cars arrives later this year. They will need at least a few years to reach meaningful numbers, and the batteries themselves will take most of a decade before their usefulness for driving runs out.
But in one scenario, analysts say, utilities could adapt the used batteries for grid energy storage. If this "secondary market" develops, it's thought that the price of batteries -- and electric cars -- will drop.
Unlike traditional car batteries, electric car batteries aren't small or cheap. The T-shaped battery in the Chevrolet Volt, for example, costs several thousand dollars, is about 8 feet long and weighs around 440 pounds. Whether the economics for reusing them will work depends, in part, on pilot projects such as GM's.
GM and ABB Group, a Switzerland-based power-grid corporation, said yesterday they will study how to reuse lithium-ion batteries that have been used by the Chevy Volt. Some batteries will store power from renewable energy sources; others will chip in during peak electricity demand.
Other possibilities: a neighborhood that keeps many small batteries for backup power, or a factory that stores up cheap power at night to run its machines during the day.
Much will depend on how much juice the Volt battery is capable of giving. With use, lithium-ion batteries lose performance. The automotive purpose is particularly harsh compared to other uses, because the battery must repeatedly drink in and spit out large volumes of electricity.
A laptop uses a different kind of lithium-ion battery, but it can start with a four-hour battery life and lose half of it within two years. Would drivers really accept their 100-mile electric car getting only 50 miles?
Giving a jolt to recycling
"Fifty percent is probably not acceptable. People would like to maintain that energy capacity at a higher level," said Michael Kintner-Meyer, a staff scientist at Pacific Northwest National Laboratory who has researched different types of grid energy storage.
The industry benchmark isn't written in stone, he said, but it's about 80 percent. In a teleconference yesterday, a GM executive said the company expects to reuse batteries that have 50 to 70 percent of their useful lives left.
What happens next? Experts say there's a number of ways to make the resale profitable.
Utilities, in particular, offer an interesting opportunity. Many already use energy storage because there is a market for it: It handles small flutters in energy demand, and in some cases it even stores many megawatts of power.
But many such technologies, such as large stationary batteries or flywheels, are expensive to build. Kintner-Meyer said getting used car batteries could be a cheap alternative.
For example, a utility could collect tens of thousands of batteries and scatter them in a region to make its power supply more reliable, he said. Of course, the batteries have to work -- if they don't, the utility will have to send maintenance crews out to fix the batteries, which nibbles at profits.
Another possibility: roping together thousands of batteries, planting them at a substation, and storing wind or solar power. These stations could sell power to companies like Google or Amazon, which have huge server farms and will pay a premium price to keep their websites up, said Mark Duvall, who directs electric transportation and energy storage at the Electric Power Research Institute.
Business models taking shape
Citizens could also keep car batteries at home to store up power from solar arrays, but this wouldn't be as profitable as other options, Duvall said on the GM conference call.
Pilots like GM's are meant to see what works and what fails in a real-world setting, Kintner-Meyer said. Companies will build business models around what succeeds. "There's a vision of a business model that has to be substantiated. Nobody really knows what the real, true costs are," he said.
Ener1, another manufacturer that thinks batteries can lead a profitable second life, is helping pilot small batteries at convenience stores in Japan. When a solar panel on the roof tops the batteries off, the store can run without the grid, said Chief Financial Officer Jeff Seidel.
He said the company's Japanese partner also owns thousands of vending machines; they're discussing attaching batteries to these, as well. "These are the kinds of things that probably aren't entirely envisioned by the market yet, but provide a lot of different end markets" for used car batteries, he said.
Seidel said he could imagine utilities, car companies or battery companies running the business model. A utility could lease a battery to a car owner, for example, and plan to incorporate it into their portfolio when it returns. Or a battery company like Ener1 could lease a battery to a car owner, then sell it to a utility at the end of the lease.
The key variables, he said, are how much performance the battery has once it leaves the car -- and how much the market decides that's worth.
GM also announced last week that it will pilot an all-electric, 100-mile-range vehicle in Korea this fall. The Chevy Cruze will run on a battery from LG Chem, the same firm building the battery pack for the Volt. The company didn't announce an intention to test the Cruze in the U.S. market, where Nissan's 100-mile Leaf will debut later this year and is considered the Volt's rival.
Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500