A recent study in the International Journal of Sustainable Transport analysed the cost benefits of distributed energy resources (DER) in conjunction with energy storage systems (ESS).
Lithium-ion second life batteries (SLB) emerged as the most cost-effective solution compared to new batteries and flywheels and can reduce annual costs by almost half the price when used in conjunction with solar panels. Compared to new batteries, the degraded capacity of SLBs renders them unsuitable for continued use in EVs, but they can still be serviced by the grid for stationary energy storage.
The paper used a mathematical model using input data from EV users in Michigan and found that SLBs can reduce an estimate of $40,000 to $300,000 per city in annual electricity costs. SLBs appear to be an attractive and economical choice for use in the electric grid due to their effective charging at night, discharging during peak hours, and storing of intermittent solar energy.
A study Nature Communications further found that the European Union’s need for stationary storage by 2040 could be covered by reusing just 40% of EV lithium-ion batteries. [2] As of 2021, Norway have reused 60% of their end-of-life EV batteries, and it would be beneficial for more countries to follow suit. [2]
One challenge facing wider adoption of SLBs is the simultaneous demand for battery recycling as EV batteries are a valuable resource for extracting lithium, nickel, manganese, and cobalt. This process can be economically and environmentally beneficial; however, it can also reduce the material capacity for reuse in the electric grid. Nature Communications ultimately found however that the cost benefits of battery reuse more than compensate for the delay in materials for battery recycling.
These studies have emerged alongside similar research on the potential of EV batteries to act as ‘batteries on wheels’ by exchanging energy with the grid. Transport & Environment note how this use of bi-directional charging can reduce load burdens on electricity grids, potentially providing up to 9% of Europe’s power supply.
Policymakers may want to make sure to harness the full potential of EV batteries, taking advantage of its multitude of uses across its lifespan. In anticipation of the rise in electricity demand due to the growth of the EV market, efficiently making use of DER technologies is essential. Studies like the one in International Journal of Sustainable Transport are invaluable in understanding how to best prioritize investments into DER.
