Cleantech Market Intelligence
Batteries Get a Second Chance at Life
Advanced battery manufacturers, both legacy vendors and start-ups alike, have placed nearly all of their attention on emerging cleantech applications, targeting new markets for electrified transportation and renewables integration as the future of their businesses. However, in 2012 we’ve seen these markets developing slower than anticipated. The cost of batteries is a primary factor, and advanced batteries are currently struggling under a classic chicken-and-egg dilemma: which comes first? Sales or cost decreases?
It’s possible that General Motors (GM) and ABB have partially solved this dilemma with a new project being deployed in California using second-life lithium ion batteries from GM’s Volt to provide residential uninterruptible power supply (UPS). Volt batteries are retired after roughly 30% of their capacity has been diminished, per the vehicle requirements set by auto manufacturers, but the remaining capacity in multiple Volt batteries can be combined to provide quality power supply to the distribution grid or other ancillary services. GM and ABB are trying to capitalize on that remaining battery capacity to resell battery units and drive the capital cost down, to the benefit of both vehicles and the grid.
While GM and ABB are among the first players to deploy these second-life batteries into a real world, stationary application, the idea of using second-life batteries to lower the total cost of ownership (TCO) has been the subject of research and pilot projects for some time. How much this approach will reduce the cost of batteries for electric vehicles remains to be seen. While Volt sales remain low, battery replacements will be necessary in the first generation of vehicles for the next several years. It’s safe to say, though, that any cost reduction is welcome in the struggling advanced battery industry.