Singapore Battery Consortium: 2020 Q2 Lux Newsletter

Lilum plans to continue flight testing after COVID-19 restrictions lift

admin — Sun, 12 Jul 2020 04:56:06 +0000

Lilum plans to continue flight testing after COVID-19 restrictions lift admin Sun, 07/12/2020 - 12:56

Importance Level

Interest Area

While most aviation companies have slowed activity, Lilium continues work on its first aircraft, slated for commercial flight in 2025. The flight tests are expected to show faster flight speeds and a full transition to air flight. The company recently closed a $240 million funding round and received an additional $35 million investment from Baillie Gifford, a prominent investor in Tesla. Lilium has now raised $375 million to date. The investments will allow the company to continue with business as usual when it can begin testing once again. Clients should recognize that the extra capital comes at an opportune time; further eVTOL investments will likely not be as generous in the coming year.

RECYCLING & SECOND-LIFE

admin — Fri, 03 Jul 2020 05:01:02 +0000

RECYCLING & SECOND-LIFE admin Fri, 07/03/2020 - 13:01

Importance Level

Interest Area

Stationary Storage

Exclusive Analysis & Commentary

Recycle or Reuse: The Billion-Dollar Battery Question

End-of-life management of Li-ion batteries is a complex undertaking. With Li-ion battery deployment expected to reach 2,760 GWh in deployments by 2035, major stakeholders are looking to near-term solutions to responsibly and profitably manage end-of-life Li-ion batteries. The two sustainable practices are recycling and second-life use. Partially due to lack of existing Li-ion battery recycling infrastructure, many have defaulted to second-life applications, reusing vehicle packs in stationary storage applications like frequency regulation for the grid or residential solar-plus-storage systems.

LUX TAKE

Currently battery recycling or reuse is more of an obligation than a value-add business opportunity, however after being used in its primary application, many cells still have usable life in them. While both reuse and recycling are mostly underdeveloped and lack scale, the economics of the two are beginning to reveal itself and present their own unique advantages and disadvantages.

Battery recycling and reuse will become a critical part of the Li-ion value chain as electric vehicles sales increase

Mobility remains the long-term driver of energy storage demand, with a 2035 total market share of 91% by demand at 2,760 GWh. It will also witness the highest compound annual growth rate through 2035 at 22.3%. With the first-generation of electric vehicles set to come offline in coming years, battery makers, automakers, and customers must solve a crucial question of what to do with used batteries.

However, reusing Li-ion cells is not as straightforward as plugging them into new applications. Remaining capacity and performance depend on climate conditions, driving habits, and charging habits. Furthermore, there is a high amount of variance in form factor and chemistry, making grouping old cells together for large projects complicated. The industry is now focused on the potential of recycling and second-life batteries.

Li-ion recycling technologies

The value chain of Li-ion battery recycling is intricate due to the different recycling processes available and the different recycling feedstock and end products each process synthesizes. A number of recycling processes exist to recycling used Li-ion batteries, including mechanical, hydrometallurgical, and pyrometallurgical.

The most mature recycling process is pyrometallurgical, which uses high temperatures to smelt the metal components in the Li-ion battery. Hydrometallurgical recycling aims to recover more of the battery by separating metallic and non-metallic components by selectively leaching and precipitating the metal components as metal salts. Mechanical recycling directly recovers the anode and cathode powders and subjects them to a rejuvenation process to be used again in cells.

If the aim is to make recycling a value-add process, the choice of process will depend entirely on the stakeholder and where they sit in the Li-ion battery value chain.

Mechanical processing can recover valuable cathode materials directly, without separating metals

Mechanical processing involves physically crushing or milling the batteries into fine powder, then mechanically separating those products. Powders can be separated using sieves, manipulating magnetic and electrical properties or a combination of both.

This process can recover materials in their native form – that is, it can directly recover the electrode materials, a potential product value of $124/kgCo eq, more valuable than raw metals.

In order to successfully recycling mechanically, the process must sort by battery chemistry to keep the electrode chemistries uniform. Each different battery chemistry would require its own processing line, and is further complicated by electric vehicles that use a combination of chemistries, making it difficult to keep up with changing chemistries.

Hydrometallurgical processing uses acids to dissolve the battery materials at low temperatures

This low-temperature process uses acids to dissolve battery materials into different constituents, ultimately recovering metals and salts, including lithium in the form of LiOH or Li2Co3. This process uses chemical leaching to remove these materials, followed by purification of those products, but in creating new end products the ultimate value of the materials created is potentially $55/kg_{Co eq}.

Sorting is desirable, but not required – leaching time, acid concentration, and additives all affect recovered materials and can be optimized for specific chemistries.

Developers are also considering this process as an alternative to pyrometallurgical processing of lead-acid batteries, as it is a potentially lower-cost method due to the lack of environmental compliance requirements.

Pyrometallurgical processing is the most mature, recovering key metallic elements

Pyrometallurgical processing, or smelting, uses temperatures as high as 1,500 °C to recover metals in their elemental form. Umicore, a major chemicals company that also produces cathode materials, operates one of the largest pyrometallurgical processing plants in the world for Li-ion and NiMH batteries. By reducing the battery to its elemental form, it also results in the lowest valued product at approximately $32/kg_{Co eq}.

Lead-acid batteries commonly use this recycling process, where most costs come from environmental compliance and energy consumption. Li-ion and NiMH processing also requires full decomposition of volatile organic compounds, and capture of all fluorine products due to environmental concerns.

The cathode is the key material when making recycling a value-add process

When assuming a conventional 15-year service life for EVs, second-life battery supply will reach 73 GWh in 2035

The electrification of mobility presents the largest source of second-life batteries. Within this segment, light-duty plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV) are the larges source of demand. The tipping point for plug-in vehicles is expected to occur between 2035 and 2040, where nearly 58 million new vehicles will be sold. But leading up to that point, several PHEV and BEV will be coming offline.

When assuming a 15-year service life, second-life battery supply will reach 73 GWh by 2035. However, when assuming a 10-year service life, second-life battery supply more than triples to 248 GWh of supply. With such a significant amount of batteries, it remains key to identifying the best second-life use cases and opportunities.

Residential systems used to increase solar self-consumption are more profitable than new cells

New residential systems require a peak electricity retail price of $0.77/kWh to be profitable, while second-life systems are not profitable with electricity prices below $1.04/kWh. However, each of these values are unrealistically high for peak retail rates, and neither case makes economic sense. The peak electricity retail price will also largely depend on region.

While the total system cost of a second-life is lower than a new cell system, the lower efficiency and cycle life of the battery offset the benefits, and even in 2025 a system with new cells will be more economical.

Second-life batteries are competitive in demand response applications due to infrequent cycling

Due to infrequent cycling, lower system costs in second-life battery systems make up for shorter cycle life and poorer system efficiency. Demand response payments, which are paid in available capacity for a duration of time, are typically less than $10/kW-month.

Demand response applications are very site specific, dependent on duration, load profile, and cycles per year. More frequent cycling applications may better utilize new cells in this case.

New cells should be used for demand charge reduction in commercial and industrial applications

As is the case with residential systems, required daily cycling leads to limited economic payback in second-life battery systems. This is primarily due to the poor system efficiency and limited service life that is assumed of second-use batteries.

Based on the analysis, second-life battery systems are generally a decade behind to new cell systems in terms of potential demand charge reduction pricing to reach profitability. This highlights how poor second-life systems perform in this specific application. Demand charges on a customers electricity bill are also very dependent upon load profiles of the facility in question.

Peaker plant replacement and energy arbitrage fall short of profitability for both systems

Reaching a 15% internal rate of return requires selling electricity back to the grid at $1,340/MWh in second-life battery systems and nearly $1,000/MWh in new systems – both of which are well above typical wholesale electricity prices of $100/MWh. Peaker plants, due to a relatively low utilization rate and predictable demand, are well suited for application stacking to bring down costs.

Peaker plants face a higher profitability threshold than many other applications, in part due to a low utilization rate, where neither new or second-life battery systems can reach profitability alone.

Most applications will provide higher returns using new sells, which could lead to more battery recycling

Making dollars and sense of battery recycling and reuse

Schmidt Group and Nusaned Investment for JV to manufacture flow batteries in Saudi Arabia admin Tue, 06/09/2020 - 12:53

Importance Level

Interest Area

Energy Storage

German technology firm Schmidt and Saudi investment arm Nusaned have formed a joint venture to build a vanadium flow battery manufacturing facility in Saudi Arabia with an announced capacity of 3 GWh per year. Schmidt indicated that one possible destination for its Saudi-produced flow batteries is a new purpose-built city and living laboratory, Neom. While Lux had previously identified the suitability of flow batteries over Li-ion batteries in hot environments, clients should still take the announcement with a grain of salt; initial production will be far less than 3 GWh, as Saudi Arabia has yet to deploy significant solar energy to merit widespread buildout of energy storage.