Like most consumables in today’s world, batteries from electric and hybrid vehicles have a tipping point beyond which they are no longer viable for use. Instead of stacking these used batteries in some fenced landfill for our grandchildren to deal with, Daimler AG is adapting electric car batteries into energy storage units. The most recent installation is an Elverlingsen, South Westphalia, “live replacement parts store” for the fleet of third generation Mercedes electric smarts.

A joint venture between partners Daimler AG, its subsidiary Mercedes-Benz Energy, GETEC ENERGIE, and technology company The Mobility House has bundled a total of 1920 battery modules in a plant in Elverlingsen in South Westphalia to create an energy storage facility. The stored battery modules are sufficient for at least 600 vehicles. With installed power output of 8.96MW and energy capacity of 9.8MWh, the battery storage plant is available to the energy market, for example, for supplying primary balancing power. Its modular design enables the system to continuously and fully automatically stabilize the power grid.

What To Do With All The Used EV Batteries?

Finding ways to reuse the technology is becoming more urgent as the global stockpile of EV batteries is forecast to exceed the equivalent of about 3.4 million packs by 2025, compared with about 55,000 this year, according to calculations based on Bloomberg NEF data. “The car manufacturers have an upcoming problem, and one that we are already starting to see: this massive volume of batteries,” said Johan Stjernberg, chief executive officer of Box of Energy AB. “The market will be enormous for second-life applications with storage.”

Property owners, developers, and utilities are looking for ways to harness energy storage from these inexpensive used batteries in a “second life” to help integrate variable renewables and save electricity costs. A report from Berkeley Law Center — part of a series on how climate change will create opportunities for specific sectors of the business community and how policy-makers can facilitate those opportunities — says vehicle battery storage programs can aggregate multiple used batteries to develop a bulk, commercial-scale energy storage system and microgrid backup system, among other demonstrations. Lithium-ion car and bus batteries, according to the report, “can collect and discharge electricity for a further 7 to 10 years after being taken off the roads and stripped from chassis.” This extended life has significant consequences for global automakers, electricity providers, and raw-materials suppliers.

Second-life batteries can provide backup power for homes and businesses, and utilities can dispatch peak power from these distributed batteries to relieve expensive fossil fuel-burning power plants, which can compensate for any decreases in renewable energy supply. To be usable as a replacement, a battery needs regular cycling during the storage period –- deliberate, battery-conserving charging and discharging. This prevents exhaustive discharge, which can lead to battery problems.

Leclanché and VRB Energy, two providers in very different areas of energy storage, have struck up joint ventures (JVs) intended to assist them in scaling up and hitting new markets, while Ice Energy has netted fresh funding.

Flow battery maker VRB Energy has struck a supply deal with the ‘world’s largest producer of vanadium oxide’. Covered in the most recent edition of PV Tech Power as one of four flow battery providers at different stages of commercialisation and known in China as Pu Neng, VRB this week announced a “strategic cooperation framework agreement” with Pangang Group Vanadium and Titanium Resources Co. Ltd.

The deal was announced by Sparton Resources, which through a subsidiary owns about 18% of VRB. The remaining 82% is in the control of the I-Pulse group of companies, headed by mining industry veteran Robert Friedland. In the PV Tech Power article, VRB representative Jim Stover said the vertical integration of materials into the company’s supply chain would be vital to ongoing cost reduction efforts and scaling up.

Battery and energy storage system maker Leclanché, was announced to be working with Enel on its first storage project in Germany in February and earlier this month netted CHF75 million (US$76 million) from its main existing investor, FEFAM.

The company has now begun a joint venture (JV) with lead acid battery maker Exide Technologies, to target the Indian market for EVs and stationary energy storage by building lithium-ion batteries and complete systems for both applications. At a basic level, Leclanché will share knowledge and intellectual property on lithium batteries with Exide, while the latter offers access to an “extensive sales network and brand”, Leclanché said.

Energy storage is surging across America.  Total installed capacity passed 1,000 megawatt-hours (MWh) during a record-setting 2017, and the U.S. market is forecast to nearly double by adding more than 1,000 MWh new capacity in 2018 – adding as much capacity in one year as it did in the previous four.

However, this exponential growth has mainly been limited to vertically integrated utilities operating outside of the country’s organized power markets, which serve two-thirdsof all U.S. electricity consumers. So how can energy storage plug into these markets?

In a word, revenue.

Energy storage can collect revenue in America’s organized power markets three ways: platforms, products, and pay-days.  However, different projects will tap these potential revenue streams in different ways, and investors should seek nimble developers who can navigate a complex and evolving regulatory and market landscape.

In part two of this series, we’ll explore how storage will disrupt power markets as more and more capacity comes online, but first let’s cover the three ways it can tap the U.S. organized market opportunity.

Platforms: The Best Laid Plans…

Independent system operators (ISOs) go through a planning process where they identify opportunities for new transmission to improve reliability or market efficiency. Similarly, it’s normal to think about energy storage as a reliability asset, and it can become integrated as a lower-cost, non-transmission alternative to boost reliability.

Here’s an example: A relatively isolated area on the grid must plan for losing a transmission line or local generator during peak demand.  Rather than adding new transmission or local generation, building a storage project can carry a local grid through an emergency.  If the economics add up, the project will then be built, and paid on a cost-of-service basis financed through transmissions charges.

If storage in this example plays the same role as transmission for so-called “reliability transmission expansion”, it should also enjoy an analog to “economic transmission” – transmission built to move surplus energy to constrained areas to create benefits for market buyers and sellers.  But to date, only one such project exists within the U.S. independent system operators (ISOs), located near Baltimore on the PJM grid.

The German industrial giant Siemens is investigating the use of ammonia as a way to store and transport hydrogen in energy systems with high penetration of renewables.

The company this month opened a £1.5 million ($2 million) proof-of-concept plant in Harwell, Oxfordshire, U.K. to test the efficiency of converting electricity to hydrogen, and then to ammonia, and then back.

The plant, funded one-third by Siemens and two-thirds by government agency Innovate U.K., is thought to be the first of its kind in the world.

The U.K. Science and Technology Facilities Council, University of Oxford and Cardiff University are also attached to the project, which includes a wind turbine, a nitrogen generator, a water electrolysis system, a Haber-Bosch reactor and a 30-kilowatt electric genset.

Ian Wilkinson, program manager for the project within Siemens, told GTM that the research into ammonia was complementary to Siemens’ work on other energy storage technologies, such as batteries.

But batteries are primarily useful for electricity, which in the U.K. only accounts for around a quarter of all energy use, he said. “Chemical fuels have a [use case], including energy storage of electricity but also beyond it,” he said.

“It’s pretty apparent that we will need a range of energy storage solutions to decarbonize our electricity generation,” Wilkinson added. “I think a lot of different storage technologies will be required.”

Hyundai is the latest automaker to explore uses for so-called “second-life” electric-car batteries. It’s teaming up with Finnish energy-technology company Wärtsilä to use these batteries for stationary energy storage.

Even after they have degraded too much for continued automotive use, electric-car batteries still have plenty of usable storage capacity. Energy storage is an attractive second use for these batteries because it can boost the adoption of renewable energy. The more renewable-energy sources used to generate electricity, the greener electric cars become. It’s all connected.

While renewable-energy sources like wind and solar help reduce carbon emissions, the wind isn’t always blowing and the sun isn’t always shining. Energy storage helps adjust for the intermittent nature of these power sources by charging up with energy when it’s available, and discharging at a later time. Much of that energy would go to waste without storage batteries, since wind turbines and solar panels often harvest more than is needed at any given time.

Hyundai has already constructed a one-megawatt-hour test array using Ioniq Electric and Kia Soul EV batteries. Going forward, it plans to provide batteries to Wärtsilä, which will then market them to electric utilities and other companies as part of complete energy-storage systems.

Hyundai expects 29 gigawatt-hours of used electric-car batteries to be available by 2025, compared to the 10 GWh of batteries currently available for the energy-storage market. The prediction is based on an assumption of vastly expanded electric-car sales. Tesla has already pioneered the model of selling both electric cars and batteries for energy storage. BMW, Daimler, and Nissan have also discussed selling energy-storage battery packs, but not on the same scale as Tesla.

Other automakers have also experimented with alternative uses for electric-car batteries. Nissan plans to use Leaf batteries to power streetlights in a Japanese town devastated by the earthquake and tsunami that struck the country in 2011. Nissan partner Renault is using second-life batteries as part of its “Smart Island” project off the coast of Portugal. General Motors and Toyota have used batteries from the Chevrolet Volt and Camry Hybrid, respectively, in small-scale projects.

Jardelund, Germany, is now host to what is currently Europe’s largest battery energy storage system, a 50MWh project completed and announced just a few days ago by NEC Energy Solutions.

The customer, EnspireME, is a joint venture (JV) involving Dutch renewables company Eneco and Japan’s industrial conglomerate Mitsubishi Corporation. Power stored in the batteries can either be sold in Germany’s weekly primary reserve control markets to grid operators who would then use it to provide the balancing power, or the system’s operators and owners could directly use it to provide primary control reserve, where it can be used in direct competition with coal and gas.

While original plans for the installation involved surplus wind energy being stored in the batteries, the latest update from NEC ES said only that Eneco and Mitsubishi are set to investigate connecting the Jardelund battery system to the output of local windfarms. Electricity would be stored in periods of curtailment, where wind energy is ‘throttled down’ from entering the grid due to temporary oversupply.

The whole 48MW / 50MWh project apparently took NEC ES around eight months to complete, according to Eneco director for Generation and Storage, Hugo Buis, who said he was “very impressed” with the integrator’s efforts. Energy-Storage.news first reported on the project in April last year.

“This investment in energy storage will generate revenue for Eneco and Mitsubishi Corporation in the primary reserve market and also demonstrate the economic benefits of pairing energy storage with renewables, first proven with solar and now with the abundant wind generators in the Jardelund region,” NEC ES CEO Steve Fludder said.

NEC ES provided full EPC (engineering, procurement and construction) services including delivery of its adaptable Grid Storage Solution (GSS) and energy storage system controls software, AEROS. The installation uses around 10,000 lithium-ion battery modules.

The news comes shortly after NEC ES was announced as supplier to a 20MW battery storage project in the UK for Danish company Ørsted.

Earlier this year, in an interview with NEC ES’ Steve Fludder, the CEO said that in his estimation, a successful future for the energy industry would be centred around the creation of ‘enterprise platforms’ enabling asset owners and system owners to capture value across the whole marketplace.