Energy storage technology is experiencing a pivotal moment, as the current batteries available provide only short-term solutions for grid energy needs. Developers face high costs when attempting to create long-term storage options, prompting significant investments into long-duration energy storage (LDES) solutions with little success thus far. However, a new initiative by JB Straubel, former Tesla CTO, leverages used electric vehicle batteries to provide a more cost-effective alternative. This move could disrupt the long-duration energy storage market by utilizing existing technologies to meet the demand for extended energy storage solutions.
In a recent unveiling in Reno, Nevada, JB Straubel introduced a project through his recycling company, Redwood Materials, that utilizes second-life lithium-ion batteries to provide large-scale energy storage paired with solar power. The existing batteries, arranged in a desert location, can power a small data center irrespective of weather conditions. This approach significantly reduces costs by utilizing proven battery technology instead of developing new solutions from scratch. Straubel confidently claims this method offers the lowest storage solution costs compared to traditional options, demonstrating a potentially transformative impact on the energy storage landscape.
Despite scrutiny regarding the durability and reliability of second-life batteries, the project—holding 63 megawatt-hours of energy—outshines many conventional installations in the U.S. As Straubel asserts his ambition of penetrating the long-duration storage market, the competition among various battery technologies has intensified. Some experts caution against prematurely declaring one technology superior, as advancements and deployments in the sector remain inconsistent and fledgling.
Redwood estimates the cost for its second-life battery installations is currently under $150 per kilowatt-hour, significantly economical for systems offering 24 to 48 hours of stored power. Traditional long-duration technologies such as iron-air batteries still face challenges achieving commercial viability. Although innovative, many LDES companies have placed their bets on unique solutions, struggling with cost-effectiveness and scalability, which Redwood’s second-life batteries could potentially address.
While some LDES startups actively work on technologies promising long-term storage solutions, they must contend with the significant presence of established lithium-ion batteries. These competitors face the risk of falling behind as lithium-ion technology continues to evolve and expand its capabilities into longer-duration configurations. Current LDES projects, like those involving pumped-hydro or compressed-air systems, require massive infrastructure investments that can be difficult to justify in the current market climate.
Other companies in the LDES space, including Form Energy and Energetic Innovations, are exploring various strategies to promote the adoption of their technologies, but comparisons are complicated by varying definitions of “long-duration” among companies. As such, the LDES landscape is rapidly evolving, with startups appearing determined to refine their offerings and expand deployment capabilities.
However, these companies face hurdles, including ensuring that second-life batteries can reliably perform as utility-grade assets capable of long-term use without loss of performance. Additionally, a consistent supply of used batteries remains critical, and Redwood seeks to fill that demand, aiming for sustained growth as electric vehicle adoption increases.
While only time will reveal the outcomes of Redwood’s pioneering venture, the project’s scale and pricing suggest it is a formidable contender in the long-duration energy storage market. This situation serves as a reminder that established lithium-ion technology may continue to dominate the energy storage sector, potentially stifling the promise of emerging solutions. As of now, the market is filled with uncertainty regarding the success of alternative long-duration batteries, but the continued advancements and price reductions in lithium-ion technology could reshape expectations around energy storage paradigms and their role in facilitating a renewable energy future.