Economic potential of second-life applications of car batteries for solar storage in Brazil to secure energy supply

Type de publication:

Conference Paper

Source:

Gerpisa colloquium, Brussels (2023)

Mots-clés:

Decarbonization, Global South, Lithium-ion batteries, Second life, sustainability

Résumé:

Purpose

In many parts of the Global South, there is an energy shortage, especially in remote communities with very low incomes and high investment needs. For example, in the Brazilian Amazon basin (Trindade et al., 2022), according to the Brazilian Federal Government (Governo do Brasil, 2020), about 82,000 fami-lies (about 350,000 people) are still without electricity today. Other sources (e.g. Cunha, 2018) even speak of 3.5% of the total Brazilian population, i.e. 990,000 "electrically excluded people".
One way to improve energy supply in remote areas without electricity connections could be "solar-powered storage systems based on second-life batteries" from the automotive sector, replacing decen-tralized diesel generators (Diel, 2022). Such systems are built on solar photovoltaics (PV) with the use of batteries and could be the most cost-effective solution in off-grid systems (in individual remote villages) and in mini-grid systems (through linking of neighbouring villages), while grid expansion is being pursued in urban areas (IEA, 2018). The cumulative capacity of stationary storage powered by the used batteries of electric vehicles could reach 185 GWh/year by 2025 (Haram, 2021).

This possibility is currently being explored in the Amazon region in an interdisciplinary feasibility study by German and Brazilian researchers (Diel, 2022), funded by the German Academic Exchange Service (DAAD). The Amazonas region is especially suitable, because Manaus has developed into an industrial core since the 1980s in a Manaus free trade zone with today over 500 companies (with about 100,000 employees, SUFRAMA, 2022).
The investigation of the technical feasibility includes e.g. the cyclical and calendar ageing of cells avail-able for second-life use in the high temperatures and humidities of the Amazon region, design pro-posals for housing and cooling system considering water condensation, swelling and thermal beha-viour, mathematical models to predict the lifetime and solutions to maximize lifetime through a battery management system. This study is carried out with support of two players in stationary batteries in Brazil, BYD (https:// www.byd.com.br/) and Unicoba (https://unicoba.com.br/), as well as a player in 2-wheel electric vehicles, Volz (https://volzmotors.com/), which uses many deep-cycle (traction) batter-ies.

In addition, the sustainability of such systems must be examined, because the Global South is not only affected by the ecological impacts of global warming, but also shows particularly strong social and economic impacts (Pongeluppe, 2022). Social and ecological benefits of solar-powered storage systems based on second-life batteries can be assumed. A social improvement results because previously disad-vantaged people in the Global South are connected to the energy supply, which also improves the dis-ease status of the residents and the local labor market (Bichel and Telles, 2021; Inoue et al., 2013). In addition, the dependence of the inhabitants of the Amazon region on both diesel prices and the com-panies that provide and operate the generators decreases (Terry et al., 1986; Yoshizaki et al., 1996). Ecological advantages are to result from the substitution of emission-rich diesel generators in the Ama-zon region (Julio et al., 2022; Montoya et al., 2021; Da Guimarães Silva et al., 2018; Almeida et al., 2017). Much more, however, they can result from the extension of the use of car batteries (which al-lows it to distribute the emissions generated during production over a longer life cycle, Kallitsis et al., 2022; Philippot et al., 2021; Karadag and Poppo, 2021) and the resulting acceleration of the ramp-up of electromobility (that is necessary to achieve the Paris Agreement’s decarbonisation goals, United Na-tions, 2015). This benefits the Global South in particular, where the effects of climate change are par-ticularly strong (Huster et al., 2022; Ribeiro et al., 2022; Maia et al., 2019; Jacobides et al., 2012).

In contrast, the economic potential has yet to be assessed in the feasibility study. From an economic point of view, the costs compared to the use of diesel generators (procurement, transport and repur-posing of the car battery, installation of the solar panels, disposal of batteries no longer used, and, if necessary, the costs of a smaller diesel generator for safety) must be estimated and compared to pos-sible revenues (e.g. an annual rent, e.g. from the seller of the diesel, possibly supported by government subsidies). For an even broader consideration, additional costs through the provision of other batteries for the remaining electric cars, but also revenues from the sale of the car battery for the car manufac-turer, must also be taken into account.

The aim of the paper is to estimate this economic potential of second-life applications of car batteries for solar storage in Brazil to secure energy supply.

Design

We first characterize repurposing for a second life as a promising end-of-life strategy (e.g. Jiao and Evans, 2016; Hansen and Revellio, 2020: 1264 following Toffel, 2003). Then we conduct an economic potential assessment by estimating the costs, revenues and likely subsidy needs, similar to Jeppe et al. (2023), who estimate the economic potentials of ecologically attractive multi-life products using the example of lithium-ion batteries. Finally, implications for research and the use of second-life applica-tions of car batteries for solar storage in Brazil to secure energy supply are derived.

Findings

Our preliminary research shows an outline of an economic assessment for the application of second life batteries to secure energy supply in the Global South. It turns out that start-up financing or subsidies are needed for this innovative idea and that additional economic potential still needs to be developed - which seems to make sense in view of the social and ecological improvements. We will validate our assessment of the economic potential and possible solutions to improve it during a project trip to Brazil in May in discussions with the relevant stakeholders and can present the results at the 31st International Colloquium of Gerpisa.

Practical and theoretical implications

Our results help to create a deeper understanding of the link between the shift to electric mobility and implementing global decarbonization (Garofalo et al., 2022; Julio et al., 2022; Sigahi and Sznelwar, 2023). We show that through new technology products and new value chains not only progress in Eu-rope but also decarbonization in the Global South is possible (Sigahi and Sznelwar, 2023) and estimate the economic potential.

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