Going green has gone mainstream. Perhaps nowhere is this more pronounced than in the automotive industry. J.P. Morgan estimates that, by 2030, electric vehicles (EVs) and hybrids will make up 59 percent of the global market share, up from about 1 percent in 2015. What may be the most important feature of the EV revolution is its power source: lithium-ion (Li-ion) batteries. They are not new; they have been powering cell phones and computers for years. What is new is their large-scale use to power automobiles (and, some day, trucks and buses) and significantly reduce emissions. As our colleagues Samuel L. Brown and Lauren A. Bachtel note in an article to be published in the ABA’s Natural Resource & Environment magazine, components of Li-ion batteries include metals (e.g., lithium, cobalt, nickel) that are costly to extract and process. As demand for them increases, pressure to re-use or recycle batteries will increase.
While EV Li-ion battery life depends on many factors, current batteries generally last around 10 years (based on the warranties offered by top manufacturers). The increase in the number of EVs car manufacturers will sell in the coming years combined with the relatively short timeframe their batteries may potentially comply with performance standards and the possible scarcity of battery components poses a problem: what will we do with all those used batteries?
At the outset, it is noteworthy that numerous regulatory requirements impose obligations on the importation, manufacture, transport and end-of-life management of batteries. Highlighting just a few of the legal requirements governing Li-ion batteries helps explain the potential burdens on the US EV industry’s operations. For example, the US Department of Transportation’s Hazardous Materials Regulations (HMR) specify requirements for transporting lithium-ion batteries, whether new or used. The HMR require:
- Hazardous material training for employees involved in shipping batteries;
- Testing to ensure compliance with United Nations criteria before shipment and retention of testing records;
- Packaging that prevents movement during transportation and short circuiting;
- Labeling that clearly identifies the contents of the packages in accordance with standard marking nomenclature and symbols; and
- Registration with the Pipeline and Hazardous Materials Safety Administration.
In addition, the Resource Conservation and Recovery Act (RCRA) may apply in certain circumstances to used Li-ion batteries. A used battery that is leaking or damaged may need to be managed as a RCRA hazardous waste subject to generator characterization, storage, manifest and disposal requirements. Batteries to be discarded or recycled in most cases will qualify as universal wastes that are subject to less stringent requirements. Entities within the EV industry may need to comply with at least some of these regulations. Keep in mind, however, that RCRA applies only to wastes. It does not apply to new Li-ion batteries or to used batteries not (yet) being discarded that are otherwise not leaking or damaged. For those used batteries, a critical question implicating economic, environmental and public relations concerns is how can manufacturers, dealerships and others in the EV industry handling used lithium-ion batteries that no longer meet performance standards recoup some of their costs while also benefitting the environment? One possible solution is reuse in the energy industry.
Used EV Li-ion batteries no longer capable of meeting the needs for powering a car may still have up to 70% of their capacity left. They could be used to store power that can help meet grid energy needs during peak demand periods, which can vary by time of day, season and other factors. The use of Li-ion batteries to meet demand during these periods is similar to the concept of grid energy storage at pumped storage hydropower (PSH) facilities. In a PSH facility, power available during off-peak periods is used to pump water to an elevated reservoir. During peak demand periods, the water is allowed to run through a declivity of turbines in a facility to generate power. In the US, PSH facilities account for 95% of utility-scale energy storage. Li-ion batteries have the potential to store energy in a manner similar to what reservoirs do at PSH facilities.
In addition, used EV batteries could be used to store power to provide better integration of renewable energy sources into the grid. Renewable energy sources such as wind and solar provide intermittent energy because their generating capabilities are linked to the availability of wind and sun. Used EV batteries could provide that crucial link to storing energy when Earth and the sun want to cooperate and releasing energy when they do not.
Moreover, the energy industry is moving in the direction of utility-scale battery storage. For example, AES Alamitos recently broke ground on a 400 megawatt-hour (MWh) battery-based energy storage facility that will provide energy to Southern California Edison customers as early as late 2020. Vistra Energy plans to build a 300 MW/1,200 MWh battery storage system that will be the largest in the world. Vistra expects the project to begin commercial operation by the end of 2020. Luminant recently completed a 10 MW/42 MWh lithium-ion battery storage facility in Texas. Its system captures solar energy during the day and releases it at night.
According to McKinsey & Company, the demand for utility-scale energy storage is likely to be 183 gigawatt-hours/year (GWh/y) by 2030. Compare that with the supply of used EV batteries, which could range from 112-227 GWh/y by that same year. In other words, used EV batteries could make up anywhere from 61-80% of the utility-scale energy storage demand by 2030. Given these early forecasts, the market seems ripe for collaboration between the EV and energy industries to prepare for productive re-use of what many are anticipating to be a significant supply of used, but still useful, Li-ion batteries.