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GE May Lease Vehicle Batteries for Electric Cars, Used Batteries May Get Second Life Storing Power for Grid

By Joe Romm

"GE May Lease Vehicle Batteries for Electric Cars, Used Batteries May Get Second Life Storing Power for Grid"

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General Electric Co may lease costly vehicle batteries to electric-car buyers, joining other companies looking to get more people to buy alternative-energy automobiles.

The largest U.S. conglomerate is just at the “thinking stage” of such a move, said Mark Little, head of GE’s research and development efforts, on Friday at an event at Nissan Motor Co’s (7201.T) research center near Detroit….

A battery leasing program is a venture that could allow GE to show off its range of businesses, from its industrial core which could be influential in manufacturing the batteries, to its GE Capital finance arm which could support the leasing.

This could be a crucial strategy for keeping down the first cost of electric cars.  Cost is one of the biggest barriers to entry for any alternative fuel vehicle, but especially electrics, since batteries can add considerable cost upfront and take many years to pay for themselves.

Indeed, batteries continue to come down in price, and  the slow global economy continues to keep oil prices down.  In a decade, EVs  will be considerably more cost-effective, but  the key is to jumpstart the market now so you can start getting economies of scale and heading down the learning curve

A key reason this strategy may be viable is that there is likely to be a large aftermarket for these batteries.

After putting in eight to 10 years powering a vehicle, recommissioned batteries from General Motor Co.’s electric Volt cars could be used by utilities to provide backup electric storage for the grid, the company says.

GM and electric power company ABB Group have been working together since September of last year under a joint research and development agreement targeting the reuse of vehicle batteries for stationary power use. Alongside a conference this week in Raleigh, N.C., the groups shared their progress in moving the concept from laboratory to pilot testing….

The automaker and ABB’s R&D partnership is focused on putting the used batteries to work in clusters where they can provide backup energy storage for the grid, either to hold wind or solar energy during periods of low electric demand for use later or to provide backup power in case of a grid disruption.

Valencia said a group of 50 homes could be powered through 33 used Volt batteries, with enough storage capacity to keep them all running for about four hours. In a more likely scenario based on their talks with utilities, he said, batteries would be sold or operated on behalf of utilities in configurations of five to 10 units wired together, where they would serve small groups of houses or commercial facilities with 25 to 75 kilowatt-hours of storage.

This is “an energy solution that goes beyond the road,” he said. “This is in the realm of new storage solutions that are out there.”

I have discussed this strategy with a number of leading experts inside and outside the auto industry.  Many  believe that indeed there will be a considerable aftermarket for the batteries.

This could create a viable leasing strategy,  particularly in the early years when it is most needed.  Ultimately, there may  simply be too many electric cars for this strategy, but  is difficult to see that happening until well into the 2020s.

In fact, the idea of using batteries for backup power is not a new concept, but the economics of the proposition improve significantly when gently used batteries available on a large scale are factored in.

Valencia said the batteries would be removed from vehicles, tested and recommissioned for the secondary market and would likely be warranted for 15 years of further use, reflecting utilities’ expectations as well as the electrochemical reality of the used equipment.

The batteries are well-suited to this type of reuse, he said, because their performance drops dramatically in the early part of their life cycle and then remains fairly steady and predictable for the rest of their useful life, making it relatively simple to predict their performance by the time they hit the reuse market.

Valencia said the batteries’ post-vehicle use for grid power would not rule in or out a similar use as a vehicle-to-grid electricity source while still housed in the cars.

Many stakeholders have pointed to the potential for electric vehicles to offer power back to the grid when they are plugged in during the day, as a means to smooth the demand for power generation.

Valencia said questions about power metering and connections figure largely in that concept and have yet to be worked out. Today, different utilities and locales handle such issues differently. “If we as a society see [vehicle-to-grid applications] as crucial we’ll do that,” Valencia said.

In the meantime, looking at the reuse of batteries after their vehicle stage is a way to sidestep those challenges and the questions surrounding how to warranty a battery that is cycling both in the vehicle and on the grid and work up the learning curve….

Reuse of electric vehicle batteries is not only practical from a cost and technology perspective, but it would temporarily keep them out of landfills or recycling shops, GM officials acknowledged.

Pam Fletcher, GM’s chief engineer for Volt and plug-in hybrid electric powertrains, said the company is not yet ready to talk about the environmental considerations in landfilling or recycling the Volt batteries. “This is really about doing the right societal thing,” she insisted. “Today, we’re focused on repurposing. In the future, we’ll talk about recycling.”

The engineers say the repurposing effort is still in the early stages, with a highlight being the use of factory floor components for both the batteries and for the inverters and other, related equipment coming from ABB, rather than purpose-built testing materials from a lab.

Finalizing configurations and gathering reliability data will require years more development and testing to satisfy potential customers, they say. But that could work well with the timeline inherent in the idea — the first Volt batteries are likely to start retiring several years from now, and Valencia said the groups’ work could hit prime time around 2020.

Murray Jones, vice president of global e-mobility at ABB, said state, local and federal governments have so far been supportive of electric vehicle charging infrastructure and of the types of reuse envisioned here. The companies welcome policy frameworks that can incentivize the adoption of battery reuse, he said, and strategies like these to address “the chicken-egg questions that always come up with new technology.”

This could be a key strategy for jumpstarting the electric vehicle market.

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8 Responses to GE May Lease Vehicle Batteries for Electric Cars, Used Batteries May Get Second Life Storing Power for Grid

  1. Alter Man says:

    Finally there are smartening up. Alternative energy users have been doing this for decades, my preferred sequence for lead acid batteries are electric buggies to solar power and finally wind power, since wind is the most brutal on the batteries, at that point they are little more than ballast. Then they get recycles and the sequence repeats itself.

  2. squidboy6 says:

    Yeah, I lived off the grid for years and we used lead-calcium batteries from surplus which had been used to fire missiles like the Minuteman missile. They had problems like dead cells and they were huge but the energy after investment was free.

    The new batteries are much, much better. Storing wind or solar energy isn’t as big a stumbling block as many say it is, but you need to learn about them by working with them, plus metering and basic concepts like resistance and electromotive force need to be studied.

    This technology is many decades old, or young depending on how you look at it. The wind-powered generator was made in Australia in the 70s and it worked for several decades without trouble. The site had reliable wind and every night the power picked up as the wind really howled. Amazing we have never been focused enough to do something like this, solar panels on top of buildings or along roadways should have been started three decades ago.

  3. Jacob says:

    Good steps to be taking, we need a great deal more of these developments from them and other parties throughout America. Best way to fix our current and future problems while rebuilding the nation.

    The idea of the batteries going into landfills years from now, though, does not fill me with glee. Like it or not, this planet is smaller than it used to be, and wherever we dump our waste will not be all that far away from us.

    I think we can figure out a way to recycle it cleanly, but if we prove incable of doing so. There is only one way to make sure we can get rid of it rather than poison oursleves with it.

    A radical idea, perhaps, which involves sending the waste towards the sun and to incinerate it out in space, far away from our planet. At least the waste we can’t recycle, or waste which is good for the Earth. I can’t believe it’s a new idea, even if it is fraught with many difficulties and dangers, but it’s also the only way–barring technological innovation–to put an end to poisoning ourselves and the Earth.

    • Antoni Jaume says:

      Sending stuff to space is very expensive, it is much more efficient to recycle, both in terms of money and energy.

  4. David B. Benson says:

    I strongly fear that the economics are against using automobile batteries for grid use while still in the automobile. Afterwards, yes, this may well prove to be economic.

    The materials in batteries are expen$ive enough that recycling to sure to occur.

  5. MightyDrunken says:

    For electric cars to take off their cost has to reduce. Leasing of the battery over the life of the vehicle is the most likely way to mitigate this cost.
    If may also have the added benefit that people will be more favourable to the idea of swapping batteries out at “filling stations” so electric vehicles could be recharged in minutes.
    The secondary market for these used batteries is just icing on the cake.

  6. The cost problem most people struggle with for electric cars is that you have to pay most of the money up-front. Yes you save big on fuel costs for the next decade or two, but you need to be able to afford the car to start with.

    The battery lease idea is a great way around that economic hurdle. As it solves a critical problem of adoption, I’d guess the auto companies will make it happen.

    For many gasoline cars the cost of gas can be as great, or greater, than the cost of the car itself. This is especially true of used cars, or any just about any car when you are buying gas at European prices.

    As far as waste is concerned, a two tonne SUV will burn 30 tonnes of gasoline creating climate pollution litter weighing 100 tonnes. Over 90% of the weight of all cars in North America is recycled. So an SUV itself creates a waste stream of a few hundred pounds of plastic for landfill while creating 100 tonnes of CO2 waste that is 0% recycled.

  7. prokaryotes says:

    Imagine

    Huhne also struck a conciliatory tone when asked about the environmental impact of Transport Secretary Philip Hammond’s plans to raise the speed limit to 80mph, noting that there are several countries in Europe with a green reputation that have a higher speed limit than the UK.

    In a surprising move, he suggested that in an effort to limit the environmental impact of any change the new 80mph limit could be variable and only applied to electric vehicles.

    A spokesman for the Department of Energy and Climate Change refused to be drawn on whether ministers would push for the new higher speed limit to only apply to green cars http://www.guardian.co.uk/environment/2011/oct/10/chris-huhne-carbon-budgets?newsfeed=true