Retired Bus Batteries to Power Buildings: Emerging Second-Life Battery Market

In December 2018, Volvo Buses, in conjunction with Göteborg Energi, Riksbyggen, and Johanneberg Science Park, launched a new second-life battery research project. It is in Viva housing cooperative, an apartment complex that aims to be Sweden’s most innovative and sustainable. Touted as Europe’s first ever energy warehouse using electric bus batteries, this system will store energy generated by solar PV panels located on the roofs of the apartment buildings in batteries that previously powered electric buses. The battery warehouse consists of 14 used lithium ion (Li-ion) electric bus batteries that are linked together to create a 200 kWh storage pack. This energy warehouse allows a larger proportion of Viva’s solar-generated electricity to be used for the housing cooperative’s power needs, curtails the property’s peak power consumption, and allows for the buying and selling of electricity from the national grid.

While still a nascent industry, several companies have commercialized second-life batteries. One instance is FreeWire Technologies, a California-based company that uses second-life batteries from Nissan Leafs to build the mobile EV charging system called Mobi Charger. The company’s second-generation product, called Mobi Gen, provides mobile power for events including disaster relief and construction, replacing the need for traditional diesel generators. According to FreeWire, using second-life batteries reduces their system costs by up to 6 times compared to new batteries.

Second-Life Battery Systems: More Cost-Effective than an Efficient Battery Recycling Industry?

The battery industry is continuously evolving and as a result, there is no straightforward answer. Nevertheless, there are several trends emerging in the second-life battery ecosystem that provide insight into the factors that will be most influential. Currently, there is very little regulation, thus employing second-life batteries is an economical decision. Batteries are the most expensive component of an EV. Upon reaching the end of their service life, retired batteries could still retain 70%-80% of their original capacity. While recycling is inevitable, finding stationary storage applications for retired yet still capable batteries can improve material efficiency and has the potential to deliver value to an array of stakeholders across the automotive and energy industries, in addition to society and the environment.

The question of whether second-life battery systems will be more cost-effective than recycling largely depends on the cost of repurposing second-life batteries, emerging regulatory standards, and the simultaneous development of the Li-ion battery recycling industry. According to BYD, the testing, grading, and repackaging of second-life batteries make up the largest share of cost. As technician labor is the main cost component of such an endeavor, repurposing facilities are likely to repurpose battery modules—not cells—to minimize total costs. Use of vehicle diagnostics data to confirm the state of health and absence of faulty cells in modules prior to their purchase is therefore of great value to repurposers. When such data is available, repurposing costs can be as low as $20/kWh.

Novel Recycling Strategies Expand the Value Proposition of Advanced Batteries

While second-life use is a viable option for some in the battery industry, the economical and environmentally friendly recycling of advanced battery systems also has the potential to benefit all stakeholders. Guidehouse Insights’ report, Novel Recycling Strategies Expand the Value Proposition of Advanced Batteries, examines key recycling methods and strategies for major advanced battery technologies that are commercially available for transportation and grid storage and outlines the primary battery system components for advanced batteries and how they should be considered when recycling. The study also explores competing end-of-life strategies and provides recommendations on incorporating recycling procedures in the supply chain for governments, manufacturers, and business owners.