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Towards A Business Model For Second-Life Batteries-Barriers, Opportunities, Uncertainties, and Technologies
Towards A Business Model For Second-Life Batteries-Barriers, Opportunities, Uncertainties, and Technologies
Review
a r t i c l e i n f o a b s t r a c t
Article history: Electric vehicles (EVs) and the recent pandemic outbreak give cities a new trend to primarily private and
Received 29 September 2022 shared mobility with low noise and less air pollution. Crucial factors for the widespread of EVs are the
Revised 25 November 2022 electrical charging infrastructure, driving range, and the reduction of the cost of battery packets. For this
Accepted 7 December 2022
reason, there is a massive effort from manufacturers, governments, and the scientific community to
Available online 2 January 2023
reduce battery costs and boost sustainable electrical production and distribution. Battery reuse is an
alternative to reduce batteries’ costs and environmental impacts. Second-life batteries can be used in a
Keywords:
wide variety of secondary applications. Second-life batteries can be connected with off-grid or on-grid
Business models
Batteries
photovoltaic and wind systems, vehicle charging stations, forklifts, and frequency control. The present
Sustainability work aims to analyze the main challenges imposed on the reuse of batteries, the leading technologies
Electric vehicles for their reuse, and the different types of batteries in terms of their feasibility for second-life use. The
Challenges main novelty of this work is the discussion about the barriers, opportunities, uncertainties, and technolo-
Opportunities gies for the second life market. Here we summarize the present state of the art in reusing lithium-ion bat-
Lithium-ion batteries teries discussing technical and economic feasibility, environmental impacts, and perspectives. The results
Reuse show five business models that have been proposed in the literature, three types of markets for trading
second-life batteries, and the main opportunities and barriers for each actor in the battery supply chain.
Ó 2022 Science Press and Dalian Institute of Chemical Physics, Chinese Academy of Sciences. Published
by ELSEVIER B.V. and Science Press. All rights reserved.
Contents
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
2. Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509
3. Business models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509
3.1. Concepts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509
3.2. Market types for trading second-life batteries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510
3.3. Opportunities for key players in the second-life battery supply chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
3.4. Main typologies of business models proposed in the literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
3.5. Key uncertainties and barriers in the second-life battery market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
3.6. Projects and success stories focusing on second-life batteries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
3.7. Key players . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516
3.8. Costs involved in reusing batteries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516
4. Second-life application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518
4.1. Off-grid applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518
4.2. Energy arbitrage (on-grid application). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 519
⇑ Corresponding author.
E-mail address: [email protected] (H. Zanin).
https://doi.org/10.1016/j.jechem.2022.12.019
2095-4956/Ó 2022 Science Press and Dalian Institute of Chemical Physics, Chinese Academy of Sciences. Published by ELSEVIER B.V. and Science Press. All rights reserved.
Carlos Antônio Rufino Júnior, E. Riva Sanseverino, P. Gallo et al. Journal of Energy Chemistry 78 (2023) 507–525
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Carlos Antônio Rufino Júnior, E. Riva Sanseverino, P. Gallo et al. Journal of Energy Chemistry 78 (2023) 507–525
energy density. Less demanding applications provide and store The research questions were defined and a protocol was devel-
energy quickly, such as fast-charging stations for EVs and grid oped to identify the most relevant studies in the literature. The sys-
applications like frequency regulation and peak shaving. All these tematic search in the databases was performed by executing
applications have fewer constraints in terms of weight and volume. strings and combining the following keywords: ‘‘Business Models
In general, stationary systems can use second-life batteries [20]. In & ‘‘Second-Life Batteries”, ‘‘Second-Life Batteries”, ‘‘Sustainable
several countries, there are already policies that encourage the Business Models & Electric Vehicles Batteries” and ‘‘Second-Life
recycling of batteries, intending to provide alternatives to battery Batteries & Electric Vehicles”. Fig. 2 shows that the number of pub-
waste and scarcity of resources while also supporting the reduction lications that relate to sustainable business models with electric
of pollutant emissions [21]. vehicle batteries is increasing. Despite this, the number of publica-
The reuse and recycling of batteries is a central theme of several tions focusing on business models for second-life batteries is still
studies in the literature. In recent years, a discussion of the busi- low. This systematic review aims to contribute to filling this
ness models and decision-making factors in the second-life battery research gap.
market has increased its market share. Few studies, however, have Primary and secondary studies available in the following data-
examined second-life batteries as a potential business model and bases were considered: Web of Science, Science Direct, Springer,
described the current state of the art on the technological and and IEEE Xplore. All databases selected for this systematic review
financial viability of recycling electric car batteries. The present have papers in English in the area of engineering, computing, and
work elaborates on new business models focused on second-life sustainability. In addition, all articles included in this systematic
batteries. review were peer-reviewed. The criteria for the inclusion and
Section 2 in this paper explains the methodology adopted for exclusion of each paper in the systematic review are presented in
this review. The business models for second-life batteries are pre- Table 1.
sented in Section 3. Section 4 shows the main applications of
second-life batteries and discusses about their technical and eco-
nomic feasibility. Section 5 is the discussion of the major findings 3. Business models
and Section 6 provides the conclusions of this research.
3.1. Concepts
Fig. 2. Number of articles published over the years in the databases used in this systematic search for each of the keywords.
teries [31]. The market operator is the intermediary of the battery Postponement of the recycling phase. [17,34,35]
trade. Therefore, profit is earned as a percentage that can be calcu- Use of the remaining capacity of EV batteries. [17]
It increased battery life. [17]
lated based on transaction value, number of batteries sold, fre-
Reuse can help OEM companies ‘‘buy time” to develop their [34]
quency of sales, or both [28]. According to the research [32], only recycling infrastructure.
21.95% of the analyzed manufacturers offer a platform capable of Intermediary companies
assisting customers in specifying the ESS before purchase. Acquisition of low-cost batteries and sufficient performance to [17,36]
meet a less demanding application than the operation in EVs
The open market will be a challenge without blockchain tech-
Sale, rent, or lease of the second-life batteries. [17,28]
nology to protect sellers and consumers from opportunistic behav- Intermediary companies can act as intermediaries to [17,28]
ior. The difficulty of pricing a battery individually is increased due remanufacture EV batteries and make them available for
to the need to know the history of each battery because batteries reuse. These companies earn profits within the battery
age differently when subjected to the same operating conditions. market by incorporating second-life batteries into products or
by performing battery logistics and acting as an interface
This adds some uncertainty about the performance, lifetime, relia-
between OEMs and end customers.
bility and safety of a battery in a secondary application. In addition Act as service providers to disassemble, test and remanufacture [17,28]
to being dangerous equipment whose handling and transportation batteries
require specific knowledge, EV batteries also have encryption com- Recycling companies
Recycling companies can act by recycling batteries through [17,28]
ponents to protect data [30]. Therefore, it is difficult for EV owners
efficient recycling processes. These companies make profits in
to market these batteries to each other. European legislation gives the battery market by incorporating the extracted raw
batteries owners the responsibility to recover used EV batteries, material into new products.
making it even more difficult for EV owners to trade in second-
life batteries [33].
3.3. Opportunities for key players in the second-life battery supply need for investment in this market. For the intermediary company
chain that buys second-life batteries to insert them into a new product,
the risk is that second-life batteries will run out in the future
Considering these closed, intermediate, and open market mod- and the lack of access to battery data will imply a large cost of test-
els, we can mention some opportunities for OEMs, intermediate ing and remanufacturing the product, making the reuse of batteries
companies, and companies, as shown in Table 2. economically unfeasible. In scenarios where there is no data shar-
ing, companies are forced to test the second-life battery to know
3.4. Main typologies of business models proposed in the literature the actual condition of the battery, increasing the cost and time-
to-market of the product. These factors can make the product
In ref. [34], the authors identified five typologies of business unfeasible because a new battery technology can emerge with bet-
models (being a traditional business model, three collaborative ter performance, reliability, security, and cheaper [37].
business models, and an integrative business model) for second- In collaborative business models, companies are expected to
life batteries (please see Fig. 4). The authors present a deep discus- share data and the recycling responsibility/expenses, risks and
sion of the benefits and risks of each business model for each of the profits of this multi-million market. Blockchain technology can
actors in each scenario. However, a comprehensive study is still increase trust and transparency in this scenario. Finally, there is
needed on the costs involved in each scenario. complete integration between the OEM and the systems integrator
The OEM transfers ownership and responsibility for the second- in integrative business models [37].
life battery to another company in the standard business model. In The trade-in used EV batteries are hampered because customers
this scenario, the main risk for the OEM is to jeopardize the ‘‘know- seek guarantees regarding their performance, quality, durability,
how” of the market. However, the OEM will avoid the risks and the and safety. Battery manufacturers and/or car manufacturers want
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Carlos Antônio Rufino Júnior, E. Riva Sanseverino, P. Gallo et al. Journal of Energy Chemistry 78 (2023) 507–525
to protect their brand, and an accident involving their battery can fic product or service through the value proposition. Reusing bat-
lead to a moral hazard [30]. Therefore, protecting battery data and teries can offer the following value propositions:
storing that data in an immutable, authenticatable and secure way,
as well as implementing both parties’ consensus in smart contracts Revenue: residential, commercial, and industrial consumers
will reduce conflict of interest issues. and utilities can increase their income in various ways, such
The first step in developing a business strategy is to identify the as by selling surplus energy, providing network support ser-
group of people who would purchase products made with second- vices, and more [22].
life batteries as the target market. The reuse of batteries can gener- Costs: second-life batteries can be used to reduce the intermit-
ate value for [22]. tence of photovoltaic (PV) power generation systems, increase
the efficiency of your facilities and reduce the price of energy
Residential and commercial consumers: second-life batteries tariffs [22].
can reduce the cost of ESS. These ESSs built using used EV bat- Flexibility: consumers can store energy, buy energy at the most
teries can be connected with renewable energy systems to economically viable times, and use the energy stored in second-
increase self-consumption and sell surplus energy. At the end life batteries when energy is expensive. In addition, consumers
of the day, consumer energy tariffs are reduced, and companies’ can choose more financially viable contracts [22].
revenue increases [22]. In other words, residential and commer-
cial consumers will be able to participate in energy arbitration, After defining the value proposal, it is crucial to determine the
reducing their tariffs by lowering energy consumption during value chain, which is how the value proposition will be delivered
peak hours [32]. to the customer.
Small, medium, and large-scale energy producers: these energy
producers earn profits from the energy arbitrage market by Environmental: Reusing batteries will help to decarbonise the
storing the energy produced when the energy price is low and transport sector and keep the global temperature rise below
selling that energy when the price is high, for example [22]. 2 °C assigned by the Paris agreement [38]. In addition,
Energy utilities will be able to couple second-life batteries into second-life batteries can help companies achieve carbon credit
systems capable of operating in voltage control, quick reserve requirements by reducing greenhouse gas emissions, postpon-
and dispatch systems [22]. In addition, ESSs can reduce or elim- ing the construction of new power generation plants, reducing
inate the need for utilities to invest in infrastructure. These environmental impacts, reducing the price of ESSs making
companies can use second-life batteries to help balance the grid renewable energy generation systems more accessible, and
and make plant operations more efficient. Therefore, second-life increasing resource efficiency. Considering the current stage of
batteries can increase the reliability of the Electric Power Sys- maturity of the recycling process (expensive and with high
tem (EPS) and eliminate the need for infrastructure investment energy consumption), even without a standard, it is likely that
[34]. the reuse of batteries is more environmentally friendly.
Individual investors will be able to generate value by purchas- Business process/operations: the business model may include a
ing assets with the possibility of future returns [22]. second-life battery trading and tracking platform. In this way,
Companies that manufacture batteries, EVs, and energy utilities owners of EVs can be reimbursed for the battery. Manufacturers
may enter another market segment to provide services in the of batteries and EVs can monitor the use of batteries in EVs,
energy market to increase their revenues [22]. track the battery, easily collect batteries and generate value
through the reuse and recycling of these batteries [22].
Defining the value proposition that the company will provide to Financing: It is necessary to define project financing through
customers in the second-life battery market is crucial. The value private capital from companies, corporate partnerships, and
proposition can be defined as the benefit that customers will start-ups [22].
receive for purchasing a product or service from a specific com-
pany. The value provided by a company can be financial or non- The reuse of batteries can capture value and generate revenue
financial. The potential customer is convinced to purchase a speci- in different ways, namely:
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Carlos Antônio Rufino Júnior, E. Riva Sanseverino, P. Gallo et al. Journal of Energy Chemistry 78 (2023) 507–525
Second-use applications: Battery manufacturers and EV manu- from second-life batteries with new batteries that are cheaper each
facturers can increase their revenues and reduce environmental day, the uncertainty of the number of batteries that will be reused
impacts by reusing batteries. It is expected that customers will in the future, the lack of testing procedure for second-life batteries,
prefer second-life batteries that are more sustainable and can what technical performance the batteries will have when they
have the same performance, life and safety as new batteries in reach the limit of 70% to 80% of remaining charge, what is the cost
energy storage applications [39]. of replacing degraded batteries and how to transport this type of
Reduction in EV costs: Reusing EV batteries can extend battery battery.
lifetime and, consequently, the price of these batteries will be In [17], the authors applied qualitative research methods to
lower by making EVs more price competitive and increasing identify the main opportunities and barriers in the second-life bat-
revenues for EV companies [39]. tery market. The authors collected data through interviews with
Improved infrastructure for charging EVs: EV charging stations several participants in the battery supply chain. The main opportu-
can be built using second-life batteries to avoid costly infras- nities for OEMs are to postpone the recycling phase, making it pos-
tructure construction projects, increasing the convenience of sible to increase the company’s revenue. In that scenario, the
EV owners to charge their vehicles and consequently increasing second-life batteries will be cheaper for residential applications.
EV sales [34]. According to the data obtained from the authors’ interviews, com-
Reduced operating and maintenance costs for energy utilities: panies need to mitigate uncertainties regarding warranty, reliabil-
using new batteries to provide frequency regulation services ity, service specification level and cost of second-life batteries. In
can be a waste of resources [34]. Therefore, second-life batteries addition to these uncertainties, respondents also reported some
can be an alternative for utilities to balance the network, post- barriers because each battery has a manufacturer that builds that
pone or eliminate upgrades to their infrastructure, integrate battery differently, with variations in cell type, chemistry, and
renewable energy sources, facilitate operation and reduce cus- physical design. This variation imposes an obstacle for an interme-
tomer tariff costs [34,39]. diary to adapt this battery and update the Battery Management
Postponement of the recycling phase: The reuse of EV batteries System (BMS) to monitor its parameters. The authors also mention
can postpone the recycling phase. This will enable the recycling that the transport of second-life batteries will be expensive and
technologies to improve in the meantime due to research to highly regulated and [40] therefore the cost of this transport
face a more sophisticated and higher developed situation after should be considered in economic feasibility studies.
the second life of the battery. Consequently, it will reduce com- In refs. [17,27], it is reported that the lack of regulation about
panies’ investments in energy, material, and labor to recycle the who will be responsible for recycling batteries is a barrier that
batteries [39]. needs to be overcome and that the technical performance of
second-life batteries in a secondary application is also uncertain
3.5. Key uncertainties and barriers in the second-life battery market and how to transport this type of battery. In both studies, it is also
reported that the cost of batteries is also uncertain. Uncertainty
Despite notable advances in the battery field, some uncertain- about the availability of a sufficient number of second-life batteries
ties still remain. The work presented in [34] evaluated seven for reuse in the coming years is a common concern that is reported
topologies of business models existing in the second-life battery in [17,41]. The main barriers in the second-life battery market are
market. The authors identified that it is still unclear whether the presented in Table 3.
amount of batteries available for reuse in the coming years will The exponential fall in the price of new batteries puts the mar-
be enough for a scaled business. In addition, there are uncertainties ket for second life batteries at risk if to reuse batteries makes the
about the performance, time and warranty conditions of this pro- product more expensive than new batteries. Although several
duct to the customer. The main competition reported by the
authors is the competitiveness that used EV batteries face with
the price of new batteries.
Table 3
The work presented in [32] uses the lemon market theory to
Main barriers and challenges of the second-life battery market.
understand existing business models. The authors used canvas to
design and propose business models for the market for second- Barrier Ref.
life batteries applied to power individual homes. The authors men- Warranty time. [17]
tion that business models are changing from ‘‘selling a product” to Reliability in a second application. [17]
Service specification levels. [17]
‘‘selling the use of the product”. This idea seems simple, but it is
Cost per transfer fee. [17]
profound. Battery companies and/or car manufacturers may not Batteries are not labeled, so recycling companies do not know [17]
want to transfer ownership of the battery to EV owners for a sec- the type of battery they will receive.
ond use. Then, these companies can sell the right to use the pro- The transportation of used batteries is highly regulated, [17,28,35,39]
duct, thus changing their business model and capturing revenue. expensive, and full of unnecessary delays. Moreover, air
freight is prohibited.
According to the authors, most batteries have chemistry based on High cost of reusing degraded EV batteries. [39]
LiFePO4 (approximately 58.5%), and some use batteries with chem- Lack of security. [31]
icals based on NMC (approximately 17%). Also, according to the The difficulty of installation. [32]
survey, about 26.83% of second-life ESSs manufacturers offer a High maintenance cost. [32]
Need for skilled labor for installation. [32]
seven to ten-year warranty, and 14.6% provide a 10-year warranty,
EV owners and/or third-party companies do not have the [28,32]
with the remainder not offering guarantees or it was not possible necessary skills and knowledge about the quality and
to obtain the data. Therefore, future research must be carried out applicability of batteries to make them capable of reusing
to reduce the uncertainty that battery and automobile manufactur- second-life batteries.
ers have regarding the ideal warranty period. The market for ESSs will make it less attractive to battery [28]
manufacturers if the product built with second-life
The work presented in [27] is a systematic review where the batteries cannibalizes the market. Therefore, direct
authors highlighted that the main barrier to increasing the share recycling may be a better alternative for battery
of second-life batteries in the market is the lack of regulation on manufacturers.
who will be the owner of the EV battery when these batteries do Battery data is encrypted, and intermediaries may not have [28]
access to this data.
not have the necessary conditions to operate in EVs, competition
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Carlos Antônio Rufino Júnior, E. Riva Sanseverino, P. Gallo et al. Journal of Energy Chemistry 78 (2023) 507–525
countries provide incentives to purchase new batteries, govern- to determine the health status of the battery. The survey of these
ment incentives for second-life batteries are still lacking. Batteries parameters is essential to assess the value added to each battery.
behave differently depending on their use, so uncertainty in the These tests are even more important when considering the sce-
second application refers to determining the operating curves of nario that batteries will be removed from vehicles due to
the batteries in secondary applications to assess their performance vehicle-to-vehicle collisions, misuse and operation, among other
and lifetime. The main uncertainties in the second-life battery causes [43]. Table 5 shows the most relevant parameters for the
market are presented in Table 4. reuse of batteries.
Battery manufacturers are best suited to assess the potential for
3.6. Projects and success stories focusing on second-life batteries battery application in second life. This is because they have the
most significant knowledge about how the batteries degrade in
This section aims to answer the following questions: ‘‘Which the EV, the requirements for a second life, what are the second pos-
are the main second-life battery projects in progress and com- sible applications, how to optimize the battery during the first and
pleted?”, ‘‘Which are the main existing business models?” and second life, and if it is more feasible to rent or to sell EV batteries,
‘‘Which are the main cases of success in implementing second- battery design, architectures and control of their modules, war-
life batteries and the cases of failure?”. ranty time, manufacturing costs, remanufacturing and integration
The replacement of the battery is directly related to its degrada- of the second application [43].
tion which can be accelerated according to the conditions of use of There is a wide range of batteries with different chemistry,
the battery in the EV [43]. A comprehensive study is still needed to energy density, sizes and volume. Therefore, the battery reuse
define capital costs, installation costs, energy costs for charging strategy to be adopted must take into account the following factors
and maintaining the battery, operating costs, and the cost of test- [43].
ing second-life batteries to learn how to rate the battery according
to life, performance, safety, and reliability. The definition of these The business model for integrating batteries for a second use in
parameters will contribute to the elaboration of viable business a competitive way;
models. Define technical requirements for both the first and the second
The second-life value chain removes batteries from EVs, reman- application of the batteries;
ufactures them (if necessary), redirects them to another applica- Establish how to recover and re-manufacture batteries to make
tion or attaches them to the second-life storage system, and them applicable for second use;
integrates them into the second application. EV batteries are the Development of business partners and criteria for integration,
entrance to the value chain. All processing requirements, cost fac- rental, and sale of batteries for the second application.
tors for creating the final product, conditions of the second appli-
cation, and value chain limitations are defined. Defining the Battery manufacturers must analyze business risks and esti-
second application is essential to consider the remaining battery mate the costs of remanufacturing and collecting batteries to
capacity, design characteristics, and main limitations [43]. determine the viability of the business [44]. From a business point
A visual inspection is necessary to assess the battery’s condi- of view, the battery manufacturers must define which business
tion, and later electrical, mechanical and abuse tests are performed model is most valid, Business-to-Business (B2B) or Business-to-
Customer (B2C), and it is also essential to determine the sales
strategies, channels, support, logistics, Research, and Development
Table 4
(R&D), among other strategic areas [45].
Main uncertainties of second-life batteries.
Different parties may be interested in reusing batteries. The
Uncertainties Ref. main interested companies are battery and vehicle manufacturers,
Which is the chemistry of the battery? [17] system integrators, raw material reprocessing companies, trans-
What will be the price of new and used EV batteries? [17] port companies and startups. So it is essential to define who owns
What will be the performance, reliability, safety and lifespan [17,27,28,36] the batteries and who will be responsible for recycling them after
of second-life batteries?
Is it better to recycle batteries directly than reuse them? [28]
these batteries are used in EVs. Cooperation projects between
Some batteries experience an abrupt drop in capacity after [17] industries are essential to understand the second-life battery mar-
reaching the remaining 70% to 80% capacity range. ket, identify potential customers and possibly share knowledge
Who will owner, user and responsible for the battery at every [17] about the second use of batteries. Moreover, it is a critical point
stage of its life?
to even think about the end of the second-life application. As reuse
What will be the battery volume available for reuse? [27,34]
What condition will the battery have at the end of the first [27,28] of a battery system will only postpone the question of how to deal
life? with the battery at its very end, there must be a high effort taken
Lack of regulation and standardized tests [27,36] on the definition of constraints that ease this process in every way,
In the case of reusing EV batteries in an application other than [28] starting from the design of the battery over guarantee-
EVs, can the producer’s responsibility be transferred to a
new producer (2nd producer)?
responsibility and customer/provider relationship towards recy-
EVs do not show the health status of batteries, which can [42] cling strategies. It must be of utmost importance to avoid batteries
cause EV owners to replace batteries before or after the after their second life is discarded in third-world countries, as this
expected 8 to 12-year interval. would eliminate most of the environmental and social impacts the
OEMs are expected to protect their products by blocking [28]
reuse intended to have.
third-party access or, at least, making it difficult to reuse
batteries. A business model must have, create, and capture value,
Batteries are safe enough to handle a second application. [17] enabling companies and stakeholders to make profits. For this rea-
OEMs will be able to design batteries that will be [35] son, it is crucial to define which values will be delivered through a
incompatible with earlier or later versions between new product to the target customers and the main activities that will be
and old components within the product package will lead
each vehicle to have a unique and specified battery
carried out to make this possible.
depending on the type of vehicle. Recent business models seek to meet customer needs and over-
EV batteries can be removed from EVs prematurely and made [35] come four main limitations. (i) Price: the high cost of batteries is
available for reuse and remanufacturing before the still the main factor contributing to the high price of EVs. The reuse
expected 7 to 8-year period due to automotive collisions.
of batteries is significant in increasing the battery lifetime, con-
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Carlos Antônio Rufino Júnior, E. Riva Sanseverino, P. Gallo et al. Journal of Energy Chemistry 78 (2023) 507–525
Table 5
Strategic parameters for considering reuse batteries powering vehicles. Adapted from [43].
tributing to the reduction in the price of EVs. Some business mod- EV owners are expected to charge their vehicles at night or during
els propose using EV batteries used in EV charging stations, ESSs work. Aiming at these problems, some business models aim to
for homes. (ii) Range: companies seek business models that over- replace slow-charging batteries with fast-charging batteries; how-
come customers’ so-called range anxiety. Reach anxiety is the con- ever, these models still depend on expensive infrastructures. As
cern that customers have that EVs do not have sufficient reach to mentioned above, charging stations with second-life batteries
meet their needs. (iii) Recharge infrastructure: Some business can be viable and cheaper [39,46].
models aim to reuse EV batteries to improve EV charging infras- Therefore, there is a clear need for business models that make
tructure, increasing the number of charging stations distributed EVs economically viable as conventional vehicles. The main barrier
geographically, facilitating the penetration of EV’s in the market, to this type of technology is still the cost of batteries corresponding
and providing more excellent reliability and convenience for EV to approximately 1/3 (one-third) of the cost of an entire EV. This
owners. (iv) Charging time: companies seek to reduce the charging cost may be higher if it is necessary to replace the battery before
time for EV’s batteries. To overcome these limitations, companies the expected lifetime. Both EVs and conventional vehicles con-
have developed direct current chargers that charge batteries with tribute CO2 emissions to an inflection point. In the scenario where
a charging time between 30 min and 2 h for a full charge and alter- EV batteries are replaced prematurely, it is possible to say that this
nating current chargers that can take from 4 to 12 h to fully charge inflection point will be moved later. The EVs will contribute a more
a battery [39,46]. significant amount of CO2 than in the ideal scenario where the bat-
Although customers want fast-charging stations, this type of teries will be replaced in the time expected. Therefore, sustainable
charging increases the battery’s degradation process, and therefore business models must consider the reuse of different types of bat-
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Carlos Antônio Rufino Júnior, E. Riva Sanseverino, P. Gallo et al. Journal of Energy Chemistry 78 (2023) 507–525
teries in different life cycles, thus increasing the useful life of bat- 2 MW of power in a network-connected installation to stabilize
teries with a consequent reduction in the cost of EVs, which can the mains frequency [60]. Relectrify is also attaching second-life
equate to the cost of conventional fuels [34]. batteries to power management systems capable of improving
Several authors have already discussed the technical feasibility power quality on the grid, reducing peak demand from commercial
of reusing batteries used in EVs [19,40,47–49]. The reuse of the buildings and providing other grid support such as frequency con-
batteries can increase the efficiency of the grid, make the grid volt- trol [18]. Some players like Freewire Technologies also focus on
age more stable, increase the reliability to optimize the power reusing second-life batteries by applying them to EV charging sta-
flow, and insert solar panels and wind farms in the energy matrix. tions to improve EV infrastructure [17].
These applications are being studied by private companies and Several manufacturers of EVs and batteries are making cooper-
research institutions in several pilot projects [50,51]. According ation agreements to develop R&D projects. In Germany, the compa-
to [51], studies prove that there are no practical technical barriers nies BMW, Vattenfall, and Bosch reused more than 100 deactivated
to reusing batteries in this type of battery. However, further stud- batteries from the BMW Active and i3 in a system capable of pro-
ies are still needed [52]. These studies should propose business viding power in seconds to improve the stability of the network
models that examine the reuse of batteries from the perspective [11,61].
of e-commerce. In addition to these companies, there are also two pilot projects
The National Renewable Energy Laboratory (NREL) proposed a (13 MW h and 15 MW h) in Hannover developed by Daimler and a
business model by estimating costs to redirect Plug-in Electric pilot project (10 MW h) in Berlin developed by Volkswagen
Vehicle (PEV) batteries for stationary energy storage, considering [11,61]. In partnership with the most prominent commercial
a collection of battery modules, electrical test equipment, technical energy storage provider, Nissan LEAF developed its first system
labor, and capital cost [52,53]. The cost can vary according to the to compensate for peak demand from commercial customers [62]
vehicle’s purchase, installation size, technician handling, and test and solar lighting [63].
time. According to the authors, the cost of redirection can be The first value generated by this application for energy produc-
approximately US$ 20/kWh [52,53]. ers refers to displacing the peak demand of less efficient and
A project proposed in [54] features a microgrid system devel- expensive plants [62–65]. Upgrading R&D systems is still very
oped by the University of California to supply the energy demand expensive. The application of peak shaving can increase the use
of a brewery’s network. The proposed approach has a storage sys- time of the existing systems, thus reducing the need for its update
tem for second-life batteries used initially in the Nissan Leaf EV [62–66].
connected to a 120 kW PV system that is capable of charging the
ESS, allowing the stored energy to be consumed at times that the 3.8. Costs involved in reusing batteries
price of energy is higher and the PV system is not fully supplying
the brewery. This subsection aims to answer the following questions: ‘‘How
The NREL business model proposes to supply the second-life much will second-life batteries cost?”, ‘‘What should be considered
batteries without the need for the customer to pay any fees, and for the reuse of EV batteries to be economically viable?” and ‘‘What
the profits from the reduction of energy tariffs are shared between are the main costs involved in reusing EV batteries?”.
the NREL and the customer. In this business model, the energy util- The first technical-economic analysis of second-life batteries is
ity is responsible for storing and managing energy, reducing the presented in [67], where the authors evaluated the possibility of
customer’s energy tariff during the peak period. Some authors have reusing batteries from Nickel Metal Hydride (NiMH), whose first
proposed some business models and the main results have been application was in EVs.
summarized in Table 6. In [19], a study analyzed the costs involved in reformulating
In addition to knowing the pilot projects and business models used batteries to present the technical–economic feasibility of
that have enabled companies to succeed in the second-life battery using batteries in a second application. According to this study,
market, it is also essential to know the cases of companies that the cost of purchasing the second-life battery will be the main con-
have not been successful in the second-life market. One of the tributor to the cost of remanufacturing the battery and will
cases reported in the literature is the case of Better Place, whose account for more than half of the total costs of remanufacturing
business model was based on the concept of battery exchange sta- the battery for the second use. In addition to these costs, there
tions in less than 5 min. The main reasons for the company to are still costs related to the payment of labor, employment, and
declare bankruptcy were a high initial investment, poor manage- general costs with the testing process and the conversion of used
ment, and overestimation of market penetration in pilot study batteries. Finally, there are also costs with purchasing materials
countries [27,58,59]. to repack the battery modules.
Second-life battery lifetime will depend on secondary applica-
3.7. Key players tion requirements such as: depth of discharge, c-rates and voltage.
According to the study presented in [19], the factors that have the
This subsection aims to answer the following questions: ‘‘Who greatest influence on the cost of second-life batteries are the cost of
are the main players in the second-life battery market?”. the balancing system and the cost of second-life batteries. On the
Nissan and Green Charge Networks have an interest in this mar- other hand, in [5], the author studied the economic feasibility of
ket. These companies have partnered to investigate the feasibility applying second-life batteries based on assumptions about battery
of using Nissan Leaf batteries for commercial energy storage [60]. degradation, redirection costs, and competitive technologies. Based
Nissan and Renault have projects that aim to develop ESSs built on this study, the authors concluded that the use of second-life
with solar panels to meet the energy demand of homes [17]. batteries to balance the power system is feasible considering that
In partnership with Yellowstone National Park, Toyota applied second-life batteries will have a price of US$ 38 kW h–US$ 132
second-life batteries to store the energy generated by PV panels. kW h and the Payback time is 7 to 10 years.
General Motors has partnered with Chevrolet Volt to reuse the Another study in [68,69] approximately 75% of the batteries
EV batteries produced by Chevrolet Volt to power the General removed from EVs will have the right conditions to be reused in
Motors IT administration building [60]. second life applications. According to this study [70], in 2025,
In addition to these players, Vattenfall has applied 2600 battery almost a third of the batteries will be reused, equivalent to approx-
modules used in more than 100 BMW EVs capable of supplying imately 26 GW h of the global market. This figure represents about
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Table 6
Some companies with business models focus on second-life batteries. Adapted from [55–57].
# Project Company/ Company Profile Consumers Value Proposition Value Chain Value Capture
Location Join venture
1 China Yinlong - The company - Private - Affordable electric - The company leases the - Sale of electric
Energy sells electric consumers. buses, plus reliable battery to owners of EVs buses;
(Zhuhai) buses and rents - Bus companies. services. and offers the warranty - Maintenance of
EVs to bus com- and maintenance of this electric buses;
panies; battery for a specified - Sale of ESS based
Regional. time. on second-life
- After use on buses, the batteries;
company collects the bat-
teries and reuses these
batteries in another appli-
cation. The type of con-
tract is called a lease.
2 USA FreeWire - The company - EV owners - EV charging service. - Charging stations that use - Charging for EV
links EV charg- - Companies that - Improvement of the second-life batteries can charging service.
ing stations to have many EV’s infrastructure by be up to six times cheaper - Energy storage at
the power employees driv- increasing the number than conventional charg- the network level.
management. ing EVs. of charging stations. ing stations. - Load leveling.
- Electricity cost reduc- - Response to
tion: The company demand.
can charge vehicles
using electricity at
night and outside peak
hours.
- Easier for EV users.
3 Japan 4R Energy - Nissan and - Owners of - Provide clean, safe, and - ESS are composed of sec- - Sale of ESS built
Sumitomo joint homes, condo- reliable energy for ond-life batteries. with second-life
venture builds miniums, homes. batteries.
ESS based on schools, indus- - Reduction of cus-
second-life bat- tries, and com- tomers’ energy
teries; Regional. mercial tariffs.
buildings. - Consulting
services.
4 Germany Daimler - Venture - Energy - Provision of services to - ESSs are composed of sec- - Commercialization
GETEC/ The between Daim- concessionaires improve the power ond-life batteries. of stationary bat-
Mobility ler, The Mobility quality of the network, tery storage in the
House House, GETEC, such as frequency reg- energy market.
Remondis/ and REMONDIS; ulation and reduction - Recycling of these
EnBW Regional. of peak demand. battery systems
- Energy cost reduction. after the end of life
cycle.
- Raw materials are
returned to the
production
department.
5 USA Spiers New - Repair, remanu- - Vehicle - Repair, remanufacture, - Battery life and stock - Repair, remanufac-
Technologies facture, recondi- manufacturers recondition, and reuse management. ture, recondition-
Inc, service tion, and reuse advanced batteries ing, testing, and
provider of advanced bat- used in hybrid and EV reuse of second-life
‘‘4R” teries used in systems. batteries.
hybrid and EV
systems.
6 UK Renault and - Regulation of - Industrial - Maintains network - ESS based on second-life - Second-life batter-
Umicore the network Building stability. batteries. ies are sold Umi-
frequency. - Improvement of the core to build ESS.
- Stationary quality of the electrical
energy storage. network.
7 UK Renault and - Fast charging - EV owners. - EV charging service. - Charging stations depen- - EV charging
Connected stations for EVs. - Improvement of the dent on second-life service.
Energy - Integration with EV’s infrastructure by batteries.
renewable increasing the number
energy sources. of charging stations.
- Loading EVs during
off-peak hours.
8 Australia Relectrify - Peak shaving. - Residential and - Improve the reliability - ESS dependent on sec- - Sale of ESSs built
small commer- and resiliency of the ond-life batteries. with second-life
cial grid. batteries.
installations.
9 Germany Bosch, - Peak shaving. - Energy - Stabilize the network - ESS built with second-life - Selling ESS that are
Vanttenfall - On-grid energy concessionaires. and reduce peak batteries. built from second-
and BMW storage. demand. life batteries.
- Renewable energy
sources are integrated
to grid.
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Carlos Antônio Rufino Júnior, E. Riva Sanseverino, P. Gallo et al. Journal of Energy Chemistry 78 (2023) 507–525
Table 6 (continued)
# Project Company/ Company Profile Consumers Value Proposition Value Chain Value Capture
Location Join venture
10 USA General - Uninterruptable - Residential and - Reduced energy costs - ESS built with second-life - Reduction of cus-
Motors and power supply. industrial for homeowners. batteries. tomers’ energy
ABB - Grid power bal- consumers. - Integrating renewable costs.
ancing system. energy sources into - Sale of ESSs built
- Reduce peak the grid. with second-life
demand. batteries.
11 Germany Audi - Short-range - Industries - Space-saving in the - An ESS is composed of - Second-life batter-
vehicles. battery charging area. second-life batteries for ies are sold for
- Reduced effort to short-range EVs. applications such
replace batteries. as forklifts and
- It does not need a tow tractors.
coated floor for fork-
lifts to move around
(unlike forklifts that
use lead-acid
batteries).
- Fast recharge.
12 Germany Volkswagen - Fast charging - EV owners. - EV charging service. - Charging stations that use - Charging for EV
stations for EVs. - Improvement of the second-life batteries charging service.
EV’s infrastructure by
increasing the number
of charging stations.
13 Finland Fortum - Short-range - Auto Rickshaw - Affordable short-range - ESS are composed of sec- - Second-life battery
vehicles (auto- owners. vehicles. ond-life batteries that leasing lets auto-
rickshaw). links to short-range EVs. rickshaw owners
return used batter-
ies and receive
charged batteries.
47% of the global supply of lithium-ion batteries in 2015 [71] and ‘‘Which values each secondary application can deliver to
65% of the estimated global battery demand for EVs in 2016 [72]. customers?”.
Regarding market size, it is estimated that the market for Second-life batteries can be an alternative to satisfy peak
second-life batteries will be US$ 3 million in 2035 [73]. Several demand, and meet variable energy demand and supply, regulate
studies in the literature evaluated the costs of transportation, logis- frequency, and integrate renewable energy sources. In [12], the
tics, tests, and renovations, among others, to estimate the market authors classified the applications of second-life ESSs into three
price of used batteries [5,44,72,74]. Table 7 presents the main eco- categories: off-grid stationary applications, on-grid stationary
nomic challenges in the second-life battery market. applications, and mobile applications.
in peak demand makes concessionaires need to invest more in In addition to these factors, it is essential to mention that
their facilities. In other words, it can be said that these charges improper handling of lithium-ion batteries has the risk of explo-
are intended to cover the costs that utilities have to supply elec- sion and fire. This risk is more significant in applications that
tricity [77]. require high-power batteries. From an investment point of view,
Distributed generation allows the customer to generate their smaller scale applications are less risky as the number of residen-
own energy in a distributed manner and, therefore, reduces the tial and commercial customers is large [49].
amount of energy sold by concessionaires to each customer. For Second-life batteries can complement existing generator sys-
this reason, concessionaires have an interest in increasing fixed tems in buildings, storing energy and selling surplus energy. How-
tariffs and demand tariffs [77]. To avoid this type of fine, con- ever, applications in these locations can be challenging due to
sumers can use renewable energy sources and/or energy storage limited parking space options, and applications in urban areas
devices to supply energy as the demand for the baseload is can pose a risk to the population near the region where the batter-
exceeded. ies are installed [49].
In short, the application of peak reduction refers to the use of In addition to the applications mentioned above, it is possible to
renewable energy sources that are coupled to second-life batteries consider the scenario in which the user buys energy when this
and connected to the grid to reduce the peak energy consumed by energy is cheaper, stores it in second-life batteries, and later sells
industries, households or commercial facilities. Reducing peak that energy at times your price is higher. However, it is necessary
demand is essential for the utility to ensure the network’s stability to analyze technical aspects such as energy loss, excess discharge
and reduce the price of consumers’ energy tariffs. depth and inefficiencies that can reduce the efficiency of ESSs in
The study proposed in [78] presents a model for the distribution these scenarios [49].
network to reduce peak demand and control voltage fluctuations. In this case, the second-life battery system must be installed at
The results presented are from the simulation of a photovoltaic the consumers’ premises. These consumers must establish a model
matrix connected in parallel to the second-life batteries for steady energy contract. It separately contracts the peak demand and the
connection of the electrical network to the residential PV systems, maximum energy consumed for a month [77].
with an aim to reduce grid demand. The authors considered two It is still possible for the customer to obtain secondary values.
numerical simulation models, the first one regarding the equiva- They can avoid buying energy at times when energy is expensive,
lent model of the battery, measuring energy production from solar avoiding overloading the utility’s infrastructure. The ESS can also
and residential loads to asses the performance of the system. The improve the quality of electrical energy consumed and increase
later model assessed by the author has considered steps at each the reliability of the electrical installation. In California and New
hour and round trip efficiency for the battery, including climatic York, there is an incentive program for consumers to increase
data and the demand from residences. The results showed that energy self-generation, and the government provides incentives
the system could significantly reduce the amount of energy gener- for Con Edison energy storage. This program offers US$ 1.46/W
ated from solar, transferred to the network and reduce the influ- for energy storage to promote the reduction of peak demand and
ence of sudden fluctuations in PV energy production. the mitigation of greenhouse gases. On the other hand, New York
In [79] the authors improved the model presented in [78] by storage incentives offer storage systems above 50 kW to reduce
developing a rule-based control model to estimate energy price peak summer demand by about US$ 2100/kW [77].
and demand. The authors combined thermal storage and managed Therefore, in [80], a study aims to estimate the return on invest-
to reduce the cost of electricity by 13%–25%. Rule-based control ment considering installing an ESS. The authors estimated that the
can present low computational cost and good results when well payback based on Southern California tariffs and considering the
designed. However, this type of control may not provide good installation of an ESS based on second-life batteries is US$ 300/
results in more complex scenarios. Therefore, researchers will be Wh and US$ 300 kW in California. According to the authors, the
able to explore artificial intelligence techniques to increase the payback is at least three years.
flexibility of these models. The work proposed in [55] presented a linear optimization
method applied to manage the load demand in a peak shaving
4.2. Energy arbitrage (on-grid application) application, takes advantage of the energy production by the pho-
tovoltaic system to optimize the output power flow, and minimizes
Concessionaires can postpone and/or reduce the need to build demand loads. The authors simulated different PV system designs
new electricity-generating plants and reduce the need to purchase and estimated that the net present value is positive for applications
energy from third parties in the wholesale energy market. Finan- that have installation costs lower than US$ 450 /kWh, considering
cial market investors can buy energy at lower prices and sell it the San Diego city tariff schedule for industrial customers. The
when prices are most attractive [55,63,66,67,80,81]. authors demonstrated the efficiency of the demand forecasting
The value generated for customers is the reduction of their system in a traditional market, however, they did not evaluate
energy tariff by changing part of their load from peak hours to the degradation of batteries in their model, the uncertainties and
the time when energy demand is lowest [62–65]. For the conces- the complexity of the wholesale energy market. Comparing the
sionaire, the value obtained is the reduction in the operating cost results presented in [55,80] it is possible to notice a reduction in
of the generating plant and the need for no investment in infras- the cost of installing the energy storage system through the use
tructure [82]. of second life batteries. Comparing the results presented in
The increase in the number of second-life batteries on the mar- [55,80] it is possible to notice a reduction in the cost of installing
ket will enable a technology that facilitates generalized Renewable the energy storage system through the use of second-life batteries.
Energy Sources (RES). It is essential to serve as a rotating reserve In the work proposed in Economic analysis of second use elec-
eliminating the intermittence of RES and increasing the participa- tric [49], the authors analyzed the economic feasibility of reducing
tion of end users in the supply of electricity and in the provision of electricity tariffs or additional fees for homeowners in Ontario by
auxiliary services. The main advantage of large-scale grid- purchasing using second-life batteries for energy arbitrage. The
supporting storage is improving power systems’ reliability and authors assumed that the batteries will be removed from the vehi-
supply quality. However, specific applications may have financial cle and replaced with new batteries when these have reached 80%
disadvantages and security and reliability risks associated with of their remaining capacity. The results presented by the authors
EV battery storage units for energy support [49]. show the importance of the government providing tax incentives
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to encourage the generation of jobs, increase the penetration of vide energy in the short term in the scenarios as the energy
renewable energy sources while reducing the need for investment demand increases. Second-life batteries are an excellent alterna-
in expanding the electricity grid. tive for area and frequency regulation systems [43].
The work proposed in [83] carried out a case study with four In most electricity markets, customers contract a certain amount
stakeholders to assess the impacts of reusing batteries. The results of energy demand. In this way, customers pay for contracted
obtained reaffirm that although the reuse of batteries does not mit- demand even if this capacity is not used and purchase this energy
igate all the environmental impacts caused by EVs, it is still a demand through bids made every hour in the energy market [85].
pretty necessary measure to support the widespread adoption of The regional network operator pays for the area regulation ser-
this type of vehicle. The authors identified the need to define vice, which consists of small generating plants connected to the
who is responsible for reusing batteries after use in EVs and there network capable of supplying and absorbing energy to keep
are differences of opinion among actors in the battery supply chain demand constant. These generating plants can be composed of
about situations in which the concept of extended producer gas turbines or batteries since both can supply energy to the grid
responsibility can be used. It is possible to mention that the con- in a short time [85].
cept of extended producer responsibility alone is not sufficient to Area regulation can be classified in two ways: (i) Up-Regulation
resolve all conflicts of interest in the battery supply chain. and (ii) Down-Regulation [85]. Upward regulation consists of aux-
In [55], a study of a residence composed of actual charges and, a iliary systems that inject energy into the network, and, on the
photovoltaic system (with accurate data) connected with second- other hand, downward regulation consists of systems that remove
life batteries were presented. The authors considered actual con- capacity from the network through energy absorption [85].
sumption data, Spanish market price, photovoltaic system costs, It is important to emphasize that when the batteries absorb
batteries’ costs, and the batteries’ degradation characteristics to energy from the network to regulate the energy in the area, the
carry out the simulations. The authors concluded that the use of energy absorbed has a cost. That is, it is paid for the absorbed
second-life batteries is feasible and reduces the price of energy energy. On the other hand, when the stored energy is injected into
bills despite the low price paid for electricity. Further studies the network, the energy can be sold at higher prices, generating rev-
should investigate the benefits offered by different governments enue for the company that provides area regulation services [85].
can be credited to the energy system. The process of storing energy in batteries has losses. The
amount of energy purchased by the grid operator is greater than
4.3. Area and frequency regulation (on-grid application) the amount sold. For this application to be viable, the energy must
be sold when the energy price is highest [85].
Keeping the voltage, current, and frequency within limits estab- The work proposed in [86] estimates the lifetime of second-life
lished by current regulations is essential in the EPS. An example of batteries needed to support a power generation plant (500 kW
these strict standards is that the frequency of the electrical system up/down) composed of several gas turbines that provide area reg-
has a maximum variation threshold of 0.5%, as established by Sub- ulation services and frequency. For the prediction of the battery
module 10.8 of the National System Operator (NSO) Operating life, the authors considered two possible scenarios in which bat-
Standard published in 2001 [11]. teries would deliver energy to the gas turbine plant and deter-
The variation in the fundamental frequency of the power sys- mined the time period of the batteries that can withstand
tem is usually caused by differences between the generation and variety of loads.
the load and, in some regions, by electricity trading itself when The authors simulated all the working conditions of the system
the providers negotiate the distribution of power amongst the in just one cycle of 1 (one) hour. Therefore, they emphasize that it
plants [84]. For this reason, a frequency regulation system is essen- is necessary to carry out studies that consider the regulation of the
tial to guarantee the stability of the EPS by controlling the injected area with constant change so that the demand curve is not the
active and reactive energy [11]. same. In addition, there is a need for studies that evaluate the sys-
The power plants that generate energy must keep their genera- tem working 24 h a day and take into account the complex phe-
tion constant to avoid system stability problems. The amount of nomena of battery degradation, such as the aging knee.
energy generated is equal to the amount of energy consumed. In the first scenario considered by the authors, which was less
However, consumer demand changes in real-time because it is aggressive to the battery, the second-life EV batteries had a lifes-
related to the fact that consumers connect and/or disconnect elec- pan equivalent to 1880 cycles. In the second later, the estimated
trical charges at all times [77,85]. To monitor the variation in the useful life for the battery was 1241 complete equivalent cycles,
network load, the NSO operator adjusts the output of the genera- considering that the batteries age differently, based on the abu-
tors to supply the appropriate amount of energy provided by the siveness of the scenario.
regulation system. It is worth mentioning that the generating plants must pay to
The main strategies to stabilize the frequency of the electrical remove the additional energy from the power plant in times of less
power system are the conventional primary, secondary and ter- demand because the regulatory energy should not be delivered
tiary control reserves. However, batteries can also offer a profitable from an asset that is not yet operating. However, the Federal
alternative to this problem for both customers and dealers [77]. In Energy Regulation Committee (FERC) Order 755 (2011) made it
addition, hybrid applications of storage systems with second-life possible for utilities to receive fair and reasonable fees to guaran-
batteries and gas turbine generators may also be viable [11]. tee regulatory services in the United States of America (USA). Sub-
Traditional power generators have two main problems, they sequently, FERC order 785 extended order 755 to all auxiliary
are: (i) they have a high mass and, consequently, high inertia, systems making ESSs with second-life batteries attractive to serve
which makes it difficult to change their speed to supply energy the USA energy market regulation [43].
to meet rapid load variations in the EPS; (ii) generators must meet The regulation of the area can supply the concessionaire with
both the baseload and provide energy for a regulation [43]. the regulation of the network frequency, making it easier for the
As mentioned above, traditional generation systems have iner- concessionaire to meet the electricity quality standards. As a sec-
tia and cannot meet significant changes in electricity demand. ondary value, the regulation of the area assists in the recovery of
Therefore, when demand is reduced, it is necessary to have a reg- disturbances, making it possible for the concessionaire to comply
ulation system that absorbs the supplementary energy from the with disturbance control rules. Among the promising markets for
power system. On the other hand, the regulation system must pro- this type of application, Germany and the United States stand
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out, given that these countries have incentives for systems that range cars used in shopping malls, condominiums, boats, and elec-
provide the frequency regulation service [77]. tric scooters, among other applications.
Among these incentives, FERC’s request 775, which regulates
the remuneration of frequency regulation service providers, can 5. Discussions
be mentioned. The FERC 775 application encourages faster and bet-
ter performance technology that provides the frequency regulation 5.1. Main findings
service. Therefore, this request allocates more financing to services
with a shorter response time [77]. There is great interest from different supply chain actors in the
The work of [87] presents an estimation of the return on invest- second-life battery market. The data extracted from the papers
ment in an ESS composed of lithium-ion batteries applied in the evaluated by this systematic review show that the interest of com-
frequency regulation market for a concessionaire. This study panies in this market is mainly motivated by the possibility of
showed that the payback period is 5 and 6 years for 5 MW or more extending battery life, extracting maximum resources and profit-
ESSs. For systems with a capacity greater than 50 MW, the net pre- ing from this expensive product.
sent value suffers approximately 20%. The authors’ results show The recycling phase is also a strategic factor for companies that
that frequency regulation applications with a capacity greater than need time to internally develop their recycling process and find
5 MW will have better economic viability. However, the authors effective solutions for separating the so-called ‘‘black mass”, which
only investigated the performance of new batteries. Several works is mainly composed of lithium, manganese, cobalt, and nickel. For
have investigated the performance of second life batteries. How- intermediary companies, the second-life battery market still pre-
ever, there are still uncertainties about the replicability and scala- sents a high risk, mainly in relation to lack of access to battery data,
bility of implementing second-life batteries in this scenario. remanufacturing and testing costs, price of new batteries that are
getting cheaper every day, and enough second-life batteries for a
4.4. EVs (mobile application) scaled business.
Therefore, there are still uncertainties that need to be overcome.
4.4.1. EV charging station One of the uncertainties reported in the works is in relation to the
A crucial factor for the deployment of EVs is the infrastructure. person responsible for the second-life battery. In some countries,
The increase in EVs will increase the demand for electric energy, there is a principle of extended producer responsibility which
requiring the improvement of the EPS and the construction of states that the first company that places the battery on the market
charging stations for EVs [11]. will be responsible for recycling the battery. However, it is still not
Second-life battery systems can be applied to charging stations clear what it means to put the battery on the market, and further
for EVs. However, the most significant disadvantage is the inclined studies need to be conducted to define this question.
cost of implanting these stations [11]. The results show that stakeholders are concerned about the
The work proposed in [76] presents a study on the viability of quality that the battery. Therefore, it is important to develop
using a second-life battery in an off-grid PV vehicle charging sys- second-life battery health prognostic systems, timely maintenance,
tem. The authors built a structure composed of a PV matrix battery and real-time battery monitoring. Therefore, it is essential to con-
charging using a maximum power point tracking controller and, sider studies that propose business models that reduce costs and
thereafter, the inverter charges the vehicle. increase revenues for both suppliers and customers. Business mod-
The system consists of a power manager for managing second- els must also consider sustainability to generate value for the cus-
life battery parameters, and the results were satisfactory for the tomer. In this sense, there is essential for studies that consider
application. The startup FreeWire announced that it was reusing economic impacts and evaluate other ways of generating value,
Nissan batteries for charging mobile vehicles. such as environmental and social impacts [74].
4.4.2. Shorter-range trip and vehicle-to-grid (V2G) 5.2. Comparison with other studies
As mentioned above, electrical energy systems must be
designed to meet the demand for electricity at peak times. Accord- In secondary applications, define the required energy demand,
ing to [88], vehicles are parked 97% of the time. Therefore, when current, voltage, number of batteries used, charge and discharge
the vehicles are parked, they can be connected to charging stations rate, discharge depth, number of pulses, and frequency. Usually,
to supply energy to the grid, thus declining the dependencie to some tests need to be performed as visual inspection, SOH assess-
improve the electrical power system reliability. This fact makes it ment, capacity test, quasi-OCV test, State of Charge (SOC) test, Elec-
possible for every EV consumer or logistics company to use power trochemical Impedance Spectroscopy (EIS), and Open-Circuit
from second-life batteries to supply power to the system and mit- Voltage (OCV).
igate high upfront battery costs [20]. In [72], the authors investigated the aging mechanisms of
The vehicles used for this service can be vehicles made up of second-life batteries in residential demand management and
new batteries or used batteries. Vehicles made up of used batteries renewable energy smoothing. The evaluated modules are com-
are low-speed, short-range vehicles intended for local travel or posed of three cells connected in series, and heterogeneous mod-
delivery [11]. ules and homogeneous modules were evaluated. The cells used
The most frequently studied applications seek to integrate bat- were aged in the laboratory. They had a capacity of 20 Ah
teries into the grid’s renewable energy. Some studies focused on (ampére-hour), and the chemistry is based on NMC. The authors
applying second-life batteries to balance energy in intelligent grids concluded that not all cells are available for second use because
[56,84,89–91]. In addition to batteries, there are also supercapaci- some cells that had their internal resistance increased by more
tors with fast storage capacity, capable of storing energy in the than 175% were unable to meet second-life applications. The
order of seconds and of charging and discharging quickly. There authors pointed out that the cells that were reused before reaching
are hybrid applications that seek to combine the advantages of bat- the ‘‘aging knee” they applied to the second-life application, and
teries and supercapacitors [57,92–99]. However, combining cost those that were not reused before going to the ‘‘aging knee”
and performance in hybrid applications is not trivial. showed a very accelerated degradation.
Second-life batteries can be applied to short-range vehicles in In the work presented in [99], the authors analyzed the perfor-
off-grid applications such as forklifts, and low-speed and short- mance of second-life batteries in four second-life applications:
521
Carlos Antônio Rufino Júnior, E. Riva Sanseverino, P. Gallo et al. Journal of Energy Chemistry 78 (2023) 507–525
vehicle charging stations, PV applications to generate energy to and further research is needed to propose sustainable business
residences, area regulation, and transmission deferral. The authors models.
investigated how each of the four second-life applications affects This paper discussed some potential applications of second-life
calendar aging, discharge depth, tension, and temperature. More- batteries, further research aimed at determining their technical
over, they concluded using simulation that the investigated mod- and economic feasibility in secondary applications is welcome.
ules of 6 to 12 cells, prismatic NCM, with an individual capacity And new models to predict battery performance and health status
of 12 A h, can meet the applications of EV charging for 30 years, are needed, especially in second-life applications. The study
high consumption for 12 years, deferral transmission for 12 years demonstrated that testing and certification standards for second-
and area regulation for six years. The least demanding application life batteries are still limited. New testing standards need to be
in this study was the application of fast EV charge, and the most developed with a primary focus on reducing the time and cost of
demanding was area regulation. Therefore, on-grid and mobile this product.
applications are expected to degrade second-life batteries and
off-grid applications to degrade batteries less.
To determine which best secondary application is more eco- 6. Conclusions
nomically viable, the factors that needs to be considered are, mar-
ket size, the number of packages required, cycle frequency, Electric vehicles are a solution to decarbonize the energy matrix
operation mode, and level of degradation in each application. In of countries and achieve the environmental goals. Although the EV
[49], the authors compare the power and frequency of use between market is promising, advances in battery technology are needed to
eight applications of ESSs. The results showed that the residential reduce price, increase energy density, lifetime, performance and
market is the largest market requiring 3 million units, followed safety. In addition to these criteria, it is also necessary that batter-
by the market for telecommunications towers and commercial ies meet sustainability criteria and companies must be prepared to
buildings with an estimated market of 100,000 units, and the com- collect, treat and recycle as much as possible of batteries that reach
mercial lighting and distribution centers markets. Fresh food can the end of their useful life.
demand from 10,000 to 100,000 units. The stranded power (renew- This paper aims to present a comprehensive review of the
ables) and transmission support markets are still uncertain. second-life battery market, identify the main business models in
the literature, the main barriers and opportunities for battery reuse,
5.3. Implication and findings the main projects in progress and the players in this battery market.
The markets can be open, closed and intermediary. Each market
The outcomes of this systematic review are of practical rele- offers different opportunities and risks, and the main factors to con-
vance for companies with a strategic interest in the second-life sider are access to historical battery data in a first application, gov-
battery market, which need to develop the business models and ernment subsidies, volume of batteries available for reuse, need for
mitigate the risks involved in each scenario. The main technologi- remanufacturing and battery testing to assess the actual actual bat-
cal challenge refers to the lack of regulation on who will be respon- tery condition and conditions at the end of the first application.
sible for the battery in second use, considering the scenario in Among the most promising secondary applications are energy arbi-
different countries. The second-life battery market is an excellent trage, coupling of second life batteries with power generation sys-
economic opportunity for companies interested in increasing their tems connected or not with the grid, energy supply for works and
revenues and spreading the cost of recycling. The results of this events, peak shaving, energy storage in power stations. vehicle
work show that the applications of second-life batteries in forklifts, charging and traction applications in short-range vehicles.
electric vehicle charging stations, and PV and wind power genera- The results showed that there is still a lack of public policies
tion systems are in high technical and economical. that encourage companies to improve the infrastructure for col-
Companies that integrate the batteries used in EVs in second- lecting, reusing and recycling batteries. Punishment and reward
life applications will have to risk not having enough batteries if mechanisms can be implemented to punish companies that do
the company responsible for that battery is no longer interested not achieve targets and reward companies that achieve targets.
in supplying the battery to a third company. On the other hand, While there are studies that have investigated the second-life
when battery manufacturing companies transfer responsibility battery market, the field of business models for this type of market
for the second use of the battery to an intermediary company, they is still in its infancy. The main challenges are the lack of specific
may lose the market and their competitive advantages. For these standardization and the cost of testing second life batteries. It is
complex low-confidence scenarios, battery tracking information still unclear what the cost of used batteries will be, who will be
systems need to be investigated as a possible solution to these con- responsible for battery reuse and recycling.
flicts of interest. The second-life battery market is complex because it involves
The results showed the existence of only one test standard for both collection, testing, remanufacturing, operating the battery in
second-life batteries. This shows an area that still needs to be a second application and assessing environmental impacts. The
explored to develop new standards that can guarantee the perfor- time that the battery will last in a secondary application will
mance, lifetime, reliability, and safety of second-life batteries. The depend on the conditions experienced by the battery during oper-
results also present the cost and time of collecting, transporting, ation in electric vehicles, and estimating this time is a complex task
testing, and certifying the battery can make second-life batteries since two batteries subjected to the same operating conditions
economically unfeasible. The clever combination of physical test- may degrade differently. and consequently the lifespan for the bat-
ing with virtual testing to save the time and cost of second-life bat- teries will also be different.
tery testing remains investigated. The area of research of business models for second life batteries
will grow in the coming years, in view of the change of the business
5.4. Strengths and limitations models that were previously focused on selling a product for the
sale of a service. In the second-life battery market, business models
This review shows a study of the literature focused on identify- could be the sale of the battery or the sale of a service performed
ing the main barriers, opportunities, and uncertainties in the by a product built with the second-life battery, for example: vehi-
second-life battery market. Although there are business models cle charging service at vehicle charging stations built with second
identified in the literature, the battery market is still premature, life batteries.
522
Carlos Antônio Rufino Júnior, E. Riva Sanseverino, P. Gallo et al. Journal of Energy Chemistry 78 (2023) 507–525
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research interests focus on battery systems, their state
Degree in 2016 in the department of Electrical Engi-
evaluation and modelling.
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Campus Formiga), Formiga, Brazil. He obtained his
master degree in 2019 Systems Engineering and
Automation from the University of Lavras, Brazil. Cur-
rently, he is pursuing his Ph.D. degree under the fel-
Dr. Yash Kotak completed his Master’s in Renewable
lowship of Academic Doctorate for Innovation (DAI) at
Energy Engineering from Edinburgh Napier University,
the UNICAMP/USP/UNESP Bioenergy Program, Brazil.
UK in the year 2013 and his Doctorate degree from
Currently, he works as a Research Associate at an
Heriot-Watt University, UK in the year 2017. He was
automotive research center in the Integrated Safety
working as a Lecturer at Edinburgh College, UK (2014-
Systems and Measurement Area called CARISSMA
2017) in the Engineering department, and thereafter as
within the University of Applied Sciences in Ingolstadt/Bayern (THI). His research
a Programme Leader at Blackpool & the Fylde College,
interests focus on batteries and blockchain technology and Data Science.
UK (2017-2020) in the field of Project management. His
expertise areas involve both Engineering and Project
Management. He started working as a Research Asso-
Prof. Dr. Eleonora Riva Sanseverino received the
ciate at CARISSMA-Center of Automotive Research on
master’s degree in electrical engineering from the
Integrated Safety Systems and Measurement Area,
University of Palermo, Italy, in 1995, and the Ph.D.
Technische Hochschule Ingolstadt, Germany in the year 2020. Thereafter, he got
degree in electrical engineering, in 2000. She has been
promoted to Technical Head at CARISSMA in the year 2022. He is also a certified
an Associate Professor of electrical power systems with
professional for, Earned Value Management Foundation from APMG International;
the University of Palermo, since 2002, where she is
and Level 2 (Expert for HV System in Motor Vehicle, FHV), Level 3 (Specialist for
currently a full professor, since November 2019. She is a
Working Live HV Components), and Responsible Electrician (vEFK) as per DGUV
scientific coordinator of various research projects with
Regulation. His current research focus is towards safe and sustainable solutions for
research organizations and companies. She is also
future mobility. He has contributed to European projects such as COBRA and
responsible of various research and teaching coopera-
HYPOBATT. He has published 4 books, 3 book chapters, 9 journal articles, 5 con-
tion agreements with foreign institutions and private
ference papers, and several other conference papers, posters, technical reports and
companies. These include European institutions Aalborg
encyclopedia topic reviews along with being the journal‘s guest editor and
University (DK), Chalmers University (SE) and extra-European institutions like
reviewer.
Electric Power University and the Institute of Energy Science both in Hanoi,
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Carlos Antônio Rufino Júnior, E. Riva Sanseverino, P. Gallo et al. Journal of Energy Chemistry 78 (2023) 507–525
Prof. Dr. Hans-Georg Schweiger was born in Ingolstadt government financed research projects in the field of automotive energy storage
1977. He studied chemistry at the University of systems. He is also director of study programs in the field electric engineering and
Regensburg (Germany) from 1998 to 2002 and gradu- electric mobility. He author/coauthor of more than 39 research papers and he holds
ated as Dipl.-Chem. in 2002. He started his PhD thesis in more than 10 patents. He is member of IEEE, VDE and VHB.
the field of electrochemistry in the workgroup of Pro-
fessor Heiner J. Gores at the University of Regensburg
(Germany) and in the end of 2004 he received his Dr. Prof. Dr. Hudson Zanin graduated in Physics in the
rer. nat. degree in chemistry there. He joined EVA University of São Carlos (2006), and Master (2008) and
Fahrzeugtechnik GmbH (Munich) as a development PhD degrees in Electrical Engineering from the Univer-
engineer for HEV energy storage systems in 2005. In this sity of Campinas (2012) focused on Materials Science
position, he was appointed as an engineering consultant and Instrumentation. He worked as a post-doctorate
to BMW AG (Munich, Germany). January 2007 he joined fellow at the National Institute for Space Research
the HEV department of Continental AG (Berlin, Germany). In this company, he (INPE), Brazil, in 2013 and as a post-doctorate fellow at
worked as an expert for lithium ion batteries, In 2008 he was appointed as project the University of Bristol, UK, 2014-2015. Currently,
leader for energy storage systems in the same company. In this position, he was Hudson works with the School of Electrical and Com-
leading series development projects for HEV and EV battery systems as well one puter Engineering as a Professor and a Coordenator
basic research project for the development of 5 V Lithium ion cells. He was also part Researcher with the Advanced Energy Storage Division
time lecturer on electrochemical energy storage systems at the Technical University of the Center for Innovation on New Energies (CINE,
of Berlin (2009-2011). 2011 Prof. Dr. Schweiger was appointed as Professor for www.cine.org.br). Prof. Zanin’s research focuses on developing functional (nano)-
Automotive Electronics and Electric Mobility at Technische Hochschule Ingolstadt. materials and their application in Energy Storage and Conversion Devices. He has
He founded the research group ‘‘Safe Electromobility”. 2020 this research group was experience in supercapacitor, batteries and fuel cells materials and devices, where
transformed into CARISSMA Institute of Electric, COnnected, and Secure Mobility for he has published more than ninety papers, two book chapters and ten patents. His
. Since then, he is head of this research Institute. The primary field of his group are h-index is 25. He is the founder of the first south America Lab-scale batteries and
energy storage systems for automotive applications and automotive safety of supercapacitors manufacturing.
electric vehicles. His workgroup of 17 coworkers is working on 9 industry and
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