Supply chain issues have been causing significant project delays for energy storage companies. Establishing strong supply streams of materials is necessary to develop new and existing products and meet project timelines.
Boston Consulting Group (BCG) recently released a new forecast that shows that lithium supply will fall short of demand by 4% in 2030, with the gap expected to widen to 24% in 2035 (George, 2022). Today, approximately 95% of electric vehicle (EV) batteries are not recycled after the end-of-life in the vehicle (Simmons, 2022). These retired batteries, if repurposed, could mitigate the lithium supply shortage.
McKinsey & Co. estimates the global supply of second-life batteries to be 15 GWh by 2025, and depending on several factors, it could grow to 112-227 GWh by 2030 (Zhu et al., 2021). Meanwhile, the global demand for grid-scale lithium-ion batteries is expected to grow to 183 GWh by 2030 (Zhu et al., 2021). This data indicates that the global capacity may lag global demand for grid-scale lithium-ion batteries by up to 40% by 2030.
By establishing strong relationships with companies that focus on creating a circular economy for batteries, like Nissan North America and Mercedes-Benz Energy, Moment Energy has secured a reliable supply of EV batteries for second-life energy storage.
Another bottleneck has been the development of battery technology. Lithium-ion batteries were vital to introducing commercial and industrial battery energy storage systems as they offered higher energy storage capacity and long lifespans.
The United States Advanced Battery Consortium (USABC) has introduced a battery retirement criterion that states that the battery pack has reached its end of life once its state of health (SOH) drops to 80% (Zhu et al., 2021). Although the batteries remain suitable for mobile applications, such as powering EVs, when they cannot fulfil the demanding needs of the EV, they are decommissioned with 80% SOH left.
With significant remaining battery capacity, should batteries be recycled immediately, or should they be safely repurposed for a less demanding application?
Lithium-ion batteries that start their life in an EV can be repurposed in a stationary storage application when their SOH drops to 80%. The battery energy storage system can then utilize the batteries until their SOH drops to approximately 30%, at which point they can be safely recycled. As demonstrated in this example, repurposing can significantly extend the lifespan of EV batteries.
It is sustainable to repurpose lithium-ion batteries, and it positively impacts the cost of energy storage by extending the batteries’ useful life. Lithium-ion battery prices have fallen from $1,100/kWh in 2010 to $137/kWh in 2020 and will continue to become more affordable (Henze, 2020).
George, S. (2022, August 24). 'acute' lithium shortages forecast by 2035, as battery supply chains expand. edie. Retrieved October 25, 2022, from https://www.edie.net/acute-lithium-shortages-forecast-by-2035-as-battery-supply- chains-expand/#:~:text=%EF%85%AD-,%27Acute%27%20lithium%20shortages%20forecast%20by%202035%2C %20as%20battery%20supply,Consulting%20Group%20(BCG)%20claims.
Henze, V. (2020, December 14). Battery pack prices cited below $100/kWh for the first time in 2020, while market average sits at $137/kWh. BloombergNEF. Retrieved October 25, 2022, from https://about.bnef.com/blog/battery-pack- prices-cited-below-100-kwh-for-the-first-time-in-2020-while-market-average-sits-at-137-kwh/
Simmons, M. (2022, October 25). Car story: Where will Canada's Electric Vehicle Batteries Go when they die? The Narwhal. Retrieved October 25, 2022, from https://thenarwhal.ca/electric- vehicles-canada-battery-recycling/#:~:text=%E2%80%9CCurrently%2C%20less%20than%20five%20per,batteries%2C% E2%80%9D%20the%20report%20states.
Zhu, J., Mathews, I., Ren, D., Li, W., Cogswell, D., Xing, B., Sedlatschek, T., Kantareddy, S. N. R., Yi, M., Gao, T., Xia, Y., Zhou, Q., Wierzbicki, T., & Bazant, M. Z. (2021, August 18). End-of-life or second-life options for retired electric vehicle batteries. Cell Reports Physical Science. Retrieved October 25, 2022, from https://www.sciencedirect.com/science/article/pii/S2666386421002484
Moment Energy is a cleantech startup creating clean, affordable, and reliable battery energy storage systems (BESS) by repurposing retired electric vehicle batteries. Its Flora BESS help utilities, microgrids and commercial customers improve grid reliability and replace fossil fuel consumption with renewable energy. Its Flora BESS provides flexibility and efficiency to fuel their customer's success, whether it's optimizing energy costs, powering EV charging stations, or integrating renewable sources.
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Miguel is the Marketing Manager at Moment Energy. He brings a comprehensive knowledge in advertising and marketing in a B2B setting. He has worked in several small and medium sized companies worldwide.
Miguel Resendiz
Marketing Manager, Moment Energy
miguel@momentenergy.com
