Navigant Research Blog

The Growing Importance of Recycling Spent Advanced Battery Materials

— April 27, 2017

Advanced batteries across all applications are proliferating the market in unfathomable numbers. Navigant Research expects advanced batteries to reach a cumulative 24.2 GW in new capacity globally by 2020—for stationary energy storage alone. As these assets have lifespans ranging from 4 to 20 years depending on the technology, the issue of what to do with these batteries when they reach the end of their usable lives is an important question that technology manufacturers, system owners, and customers must be able to answer. Second-use options are viable in some sectors, but recycling spent batteries will be a major market in the coming years. Manufacturers and governments around the world are recognizing the importance of recycling and how it translates to long-term sustainability goals.

Benefits of Recycling Batteries

Lead-acid batteries have been utilized in the market for several decades, but advances in more sophisticated technologies like lithium ion (Li-ion) and flow batteries have encroached on lead-acid market share. The spent lead-acid assets are retired and recycled in large amounts on a daily basis. An example of this is China’s announcement of doubling its lead recycling target to 2.5 million tons by 2020. China arrived at this target because the average lead-acid battery life is 4 years; batteries made in and around 2015-2016 will be available for recycling by 2020. Lead-acid battery recycling efforts are also ramping up in the United States. California lead battery manufacturers and consumers have to pay a $1 fee for each battery they make or buy following the implementation of the Lead-Acid Battery Recycling Act (AB2513). Among other recommendations, several California government officials requested adding an additional $15-$20 to each lead battery sold to help process it after its usable life.

Li-ion batteries are a bit trickier to recycle. Available in items ranging from consumer electronics to EVs, extracting the most valuable materials inside—namely, lithium and cobalt—are important to consider when reprocessing these batteries. Compounded with forward-looking lithium availability and supply chain issues, securing lithium access will be important for the industry in the future. Li-ion battery recycling is in its early stages, and there are only a handful of these plants in existence today. With few Li-ion battery chemistries available, the lack of standardization plays a role in limiting the emergence of more recycling facilities and best recycling practices for these batteries. Today, recycled lithium can be up to 5 times the cost of newly mined resources; the cost differences have limited demand for lithium recycling to date, but future price increases and new regulations can change this.

Raw material prices for advanced batteries have sporadically changed this past decade and lithium prices alone have nearly tripled. Other factors like demand in competing sectors (e.g., pharmaceuticals, construction, etc.), geopolitical relationships, and environmental concerns will also play a role in the future of battery material supply chains. Recycling advanced batteries is likely to be one of the principal methods to combat against volatile raw material prices and resource availability.

New Revenue Streams

Battery OEMs should look to partner with raw material suppliers, users, and governments to gain a strong position in their respective supply chains and increase collaboration across different sectors. Considering alternatives (e.g., second life usage), the battery recycling industry has the potential to generate significant returns. Companies that position themselves to take advantage of retiring assets will be able to access new revenue streams on top of existing businesses.


Overcoming Hurdles to Monetizing Value Streams from Energy Storage Systems

— August 19, 2016

GeneratorFederal Energy Regulatory Commission (FERC) Order 755 requiring regional transmission organizations (RTOs) and independent system operators (ISOs) to implement a pay-for-performance structure for frequency regulation service has been instrumental in demonstrating the benefits that fast-responding resources like battery energy storage systems (BESSs) can provide to the grid. For example, since Order 755’s implementation, PJM experienced a 30% reduction in overall regulation reserve requirements as more fast-responding resources have cleared the market. However, despite the early regulation successes in PJM, storage directly connected to a distribution system (known as front-of-meter, or FTM) continues to faces uncertainty and barriers in the United States associated with rate treatment.

On another front, energy storage stakeholders now recognize that BESSs connected to the distribution system from behind the meter at a residential and/or commercial & industrial customer’s property can deliver benefits to the host, RTOs/ISOs, and utility distribution system operators. This evolution is driving the development of software and hardware platforms that can analyze, control, and optimize not only a single BESS, but also aggregated BESSs. These advances are now giving rise to energy storage assets that can recognize multiple value streams by stacking grid benefits in virtual power plants (VPPs).

Regulations and Requirements

However, regulatory eligibility and performance requirements for aggregated behind-the-meter battery energy storage assets have not caught up with these technological advances. To date, there has been limited participation by energy storage in demand response markets, and several instances demonstrate how wholesale market rules are missing opportunities for these assets to provide multiple grid benefits. For example, the CAISO Proxy Demand Resource (PDR) prohibits a VPP from providing frequency regulation, even though the systems would be technically capable of doing so. And in ISO-NE and NYISO, Northeast Power Coordinating Council rules prohibit behind-the-meter energy storage from providing spinning/synchronized reserves.

At the Energy Storage North America (ESNA) expo in October, a panel discussion will feature case studies from across the country on the challenges, feasibility, and economics of how single BESSs and VPPs can stack energy storage value streams. Don’t miss out on the conversation—register for ESNA today.


Beyond Li-Ion, Next-Generation Battery Chemistries Will Face Hurdles

— June 7, 2016

Batteries 2There is much hope that the e-mobility and grid-tied stationary energy sectors will soon be transformed by new advanced battery chemistries that are not yet commercialized. The reality, however, is that new battery chemistries in these sectors face significant hurdles on their path to commercialization. Navigant Research’s upcoming Next-Generation Advanced Batteries report will examine these issues and more for pre-commercial advanced battery technologies like lithium sulfur, lithium solid state electrolyte, and next-generation flow batteries.

Commitment to Li-Ion

At the top of this list of hurdles for pre-commercial battery technologies will be the long-term commitment to improved commercially available lithium ion (Li-ion) batteries by well-funded and stable battery manufacturers like Samsung SDI, LG Chem, Johnson Controls, Panasonic, and BYD. In addition, as highlighted in a recent Forbes article, one should never underestimate the added value of a proven, commercialized technology like Li-ion that is capitalizing on the benefits of a learning curve during a rapid growth period.

As highlighted in the Forbes article, the Argonne National Laboratory-led Joint Center for Energy Storage Research (JCESR) is one of the key organizations leading the charge to identify next-generation batteries beyond advanced Li-ion chemistries that can lead to a transformational commercial battery. JCSER defines a transformational battery as one with 5 times the energy density at one-fifth the cost for the vehicle electrification and grid-tied energy storage sectors. As part of its efforts, the JCSER team developed Argonne’s open-source Battery Performance and Cost Model (BatPaC), which is useful tool for the evaluation supply chain, raw material, and manufacturing costs of commercial Li-ion and next-generation batteries. Late last year, leading into the fourth year of its 5-year effort, JCSER narrowed its beyond-Li-ion focus to four chemistry scenarios.

Navigant Research is watching the JCSER efforts closely given its unique focus and expertise. We continue to believe that manufacturing scale and expertise along with maturing supply chains for Li-ion will produce improved battery performance and lower costs over the next several years. There is great promise and potential advantage in several next-generation beyond Li-ion advanced battery technologies. However, these technologies will face strong challenges from incumbent Li-ion manufacturers. Navigant Research recommends that battery sector stakeholders watch closely for the emergence of strategic partnerships between pre-commercial battery chemistries and Li-ion incumbents as a key indicator of likelihood of success.


Advantages Abound for Lockheed Martin’s New Energy Storage Effort

— May 13, 2016

Lithium BatteriesNavigant Research recently attended the Energy Storage Association’s 26th Annual Conference in Charlotte, North Carolina. The conference has grown between 2010 and 2016 from approximately 300 attendees to over 1,600. This increase highlights not only the ramping interest in energy storage, but also the growth of the sector and supply chains as a whole.

One new exhibitor this year was Lockheed Martin’s new energy line of business. Lockheed Martin has consolidated energy-related technologies, products, and services from separate business lines into a new, integrated offering, which includes an energy storage segment. The company’s energy storage segment includes a turnkey lithium ion (Li-ion) battery energy storage system (BESS) module as well as a pre-commercial flow battery.

Targeting Commercialization

Lockheed Martin’s BESS uses Li-ion cells from unnamed leading battery manufacturers that have been integrated into a flexible and scalable integrated module along with power conversion technology, thermal management, and software and controls. The company’s pre-commercial flow battery technology is based on technology acquired from Sun Catalytix in 2014. Lockheed Martin is currently targeting a 2018 commercialization date for its flow battery technology.

Lockheed Martin is currently targeting both larger utility-scale applications and the commercial and industrial behind-the-customer meter segment. Having a short-duration, power-focused solution and a long-duration, energy-focused BESS solution will be key for the company. Navigant Research has focused on the landscape for these two sectors in detail in two recently published reports: Market Data: Commercial & Industrial Energy Storage and Market Data: Advanced Batteries for Utility-Scale Energy Storage. Lockheed’s new flow battery (along with other flow batteries and beyond Li-ion pre-commercial battery chemistries like lithium sulfur and lithium solid state) will be the focus of Navigant Research’s Next-Generation Advanced Batteries report scheduled for release later in 2016.

Key Advantages

Navigant Research sees the following criteria as key go-to-market advantages for companies focused on both the behind-the-meter and utility-scale energy storage sectors:

  • Access to an existing global customer base across the commercial, industrial, utility, and government sectors
  • Strong experience in commercializing new technology into new markets
  • A history of integrating new technology offerings into existing product lines and sales channels
  • Strong systems engineering expertise with complex technologies and products
  • Both short-term, power-focused and long-term, energy-focused BESS solutions

Many of the pre-commercial battery technologies currently under development look to well-funded strategic partners for additional investment and future product go-to-market capabilities. For Lockheed Martin, with the acquisition of the Sun Catalytix technology, the company is in essence its own strategic partner. Navigant Research will be watching Lockheed Martin’s energy storage strategies closely, as the company appears well-positioned to join others like GE Current, Johnson Controls, AES Energy Storage, RES Americas, and NEC Energy Solutions in the energy storage space.


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