For years, electric-vehicle makers have been talking about the potential for “second-life” EV batteries -- those too depleted to keep reliably pushing a car down the road, but with plenty of punch left in them for less power-intensive tasks -- to radically decrease the cost of grid energy storage.
On Monday, Nissan Motor Co. became the first EV maker to move beyond experiments and pilot projects on this front, with the launch of a full-scale commercial business with startup Green Charge Networks. The batteries are coming from Nissan's Leaf electric vehicles, and are being made available to Green Charge for its behind-the-meter storage systems.
Other EV makers have launched their own stationary energy storage businesses, most notably Tesla, and more recently Daimler AG. But these are using new batteries, not repurposed ones. And while EV makers including Nissan, General Motors, Tesla and others have announced partnerships and tests of used EV batteries, we haven’t yet seen an announcement of a full-scale commercial product line based on them.
But unlike Nissan’s previous test deployments with 4R Energy, its second-life battery joint-venture formed with Sumitomo Corp. in 2010, “this is not another demo [or] another prototype,” Brad Smith, director of Nissan’s U.S. 4R Energy business in the U.S., said in an interview. The partners have worked for about a year on engineering and testing the new systems, and the first unit will be installed in a Nissan facility this summer, he said.
By late 2015, Green Charge plans to have systems using ex-Leaf batteries commercially available in U.S. and international markets, Vic Shao, CEO of the Santa Clara, Calif.-based startup, said in an interview. They will be sold under the same no-money-down, revenue-sharing financing model, called a power-efficiency agreement, which Green Charge has used for its existing behind-the-meter deployments, he said.
The big question, of course, is just how much cheaper used Leaf batteries will be, compared to the prices being cited for new lithium-ion batteries from the likes of Panasonic and Tesla, or LG Chem. On that front, neither Smith nor Shao would provide any specifics, although Shao said that they should cost “substantially less” than new lithium-ion batteries.
Those costs have been dropping fast, largely driven by continuous improvements and the growing supply chain of batteries for the automotive market. Tesla’s new energy storage business is offering its 100-kilowatt Powerpack systems, built with batteries from No. 1 lithium-ion battery maker Panasonic, at a cost of $250 per kilowatt-hour. That’s roughly half the cost of the cheapest lithium-ion batteries available for stationary storage applications only a few years ago.
In April, Greentech Media’s Eric Wesoff cited Arcady Sosinov, CEO of FreeWire, as saying that the startup was buying repurposed Nissan batteries for mobile EV charging carts and other uses for $100 per kilowatt-hour. Smith declined to comment on FreeWire’s price quote for Nissan’s batteries, or to say whether it was higher or lower than the costs of repurposed batteries being made available for Green Charge’s new offering.
What he did say was that Nissan’s second-life batteries “give us access to a market or service that just cannot be offered today. A used battery and new battery perform very similarly on many performance metrics,” particularly for the demand-charge mitigation uses that make up most of Green Charge’s deployments in buildings today.
But with Nissan’s second-life batteries, Shao said, “with the price going down substantially, it allows us to go after new markets that don’t have rebates.” Specifically, the vast majority of behind-the-meter systems from Green Charge, Stem, Coda Energy, Tesla and SolarCity have been deployed in California, which has a lucrative Self-Generation Incentive Program incentive that can pay for up to half the cost of a typical system, and New York, which has a newer incentive program and other state mandates.
“We are going to continue what we do today, which is demand management,” he said, but will be able to target markets that lack incentives, or which have less stark demand charges than do California and New York.
Beyond that, “we’re going to be able to go after some new applications,” he said. “One thing this new offering unlocks right away is PV firming,” or backing upsolar-equipped buildings, he said. Green Charge hasn’t yet announced a formal partnership on the solar-storage front, as rivals like Stem have, but it has deployed solar-backed EV-charging stations, and “we have a lot of data, and a lot of engineering know-how, to work with solar firming and EV charging.”
While second-life EV batteries retain about 70 percent of their initial capacity, they tend to be pulled from vehicles because they’ve lost some of their ability to deliver quick bursts of power, or quickly recharge -- characteristics that aren’t as important for behind-the-meter applications.
Even so, “it took a lot of effort to make sure the safety and performance of this configuration was locked down tight,” he said. But apparently the partners feel confident in their long-term performance -- “Nissan has given Green Charge a 10-year warranty on the usability of these second-life packs,” he said. “That allows us to commercialize...[and] get financing for our systems.”
As for quantity of supply of used batteries, about 178,000 Nissan Leafs have been sold since the car's 2010 launch, and “that represents multiple gigawatt-hours of energy storage capacity,” he said. “Four and a half years later, Nissan is starting to get used battery packs back on its shelves. We believe we have the timing for a Q4 2015 commercial release just about right.”
Smith noted that Nissan tends to recover used Leaf batteries at different periods of the vehicle’s life, “depending on how the vehicle is used over the years. It may be a vehicle that runs 100,000 miles before that battery is available for consideration, or it may be a battery that’s available sooner than that, perhaps because a driver wants to refresh [his or her] driving range.”
“Nissan will be working through the leasing programs, and also through battery replacement programs, that over the years will free up these batteries for these types of applications,” he said. “Because they’re second-life, we have to start with what we have access to.”
“But over the years, as EV populations and sales increase -- we’re at 80,000 in the U.S. alone right now -- there will be a fluid secondary battery market for us,” he said. The same logic will no doubt be pushing more EV makers to follow in Nissan’s footsteps -- the Detroit Free Press reports that GM is set to reveal its plans for reusing batteries from the Chevy Volt sometime this week. Both GM and Nissan have been working with Swiss grid giant ABB on second-life battery applications.