The use of lithium-ion batteries is essential for the transition to a low-carbon economy, enabling the electrification of mobility and the integration of renewable energy sources. However, lithium-ion batteries are not without their share of controversies and environmental and social challenges, such as the depletion of critical minerals, generation of hazardous waste, and the risk of supply chain disruptions. What do we know about the importance of recycled lithium-ion batteries to power the future of clean energy?

The challenges are addressed by recycling and reusing lithium-ion batteries, crucial for creating a circular and resilient battery value chain. The use of recycled lithium-ion batteries in utility-scale energy storage systems is expected to grow significantly in the coming years, driven by increasing demand for energy storage to support the integration of renewable energy sources into the grid.

The main benefits of recycling are to recover valuable materials, reduce greenhouse gas emissions, and create new economic opportunities. Reuse also has its benefits by extending the lifespan of batteries, reducing the demand for new ones, and providing affordable energy storage solutions for various applications.

According to a report by the US Department of Energy, the demand for lithium-ion batteries is expected to grow over 30 percent annually from 2022 to 2030, reaching a market size of 4.7 TWh. It creates a huge amount of end-of-life batteries that need to be properly managed. The report also stated that recycling lithium-ion batteries could generate revenue of $3 billion and create up to 10,000 jobs by 2030.

Another NREL study suggests that recycling could recover up to 90 percent of the materials in lithium-ion batteries, such as lithium, cobalt, nickel, and manganese. One of the major benefits of recycling is also reducing the carbon footprint of battery production by up to 41%.

It also needs to be noted that batteries that are no longer suitable for their original applications, such as in EVs, can be reused for secondary applications such as grid storage, backup power, or off-grid electrification. Another major benefit of reuse is delaying the need for recycling and reducing the overall demand for new batteries.

The forecasted recycled lithium-ion battery storage supply for utilities in 2030 is based on several factors, such as the growth of battery demand, the availability of end-of-life batteries, the development of recycling and reuse technologies, the adoption of policies and regulations, and the evolution of market dynamics.

Some estimates for the recycled lithium-ion battery storage supply for utilities in 2030 are as follows:

• BloombergNEF: In a 2020 report, it estimates that the global market for second-life batteries (i.e., used batteries repurposed for stationary energy storage) could reach 203 GWh by 2030, with utility-scale applications accounting for the majority of demand. The estimate includes not only recycled batteries but also used batteries that have not reached the end of their useful life, indicating a significant potential opportunity for recycled battery storage in utilities.
• Guidehouse Insights: In a 2020 report, it projected that the market for second-life batteries in stationary energy storage applications could reach 66 GWh by 2035, with utility-scale projects representing the largest segment. While the estimation is lower than BloombergNEF’s, it indicates a significant potential opportunity for recycled battery storage in utilities.
• Circular Energy Storage: A consulting firm focused on the circular economy for batteries, estimates the global market for recycled lithium-ion batteries for energy storage could reach 1.2 GWh by 2030, driven by utility-scale projects. The estimation is much lower than the others but is still significant.
• Navigant Research: In a 2020 report, it projected that the market for second-life batteries in stationary energy storage applications would reach 203 GWh by 2035, with the majority of demand coming from utility-scale projects.
• International Energy Agency: In a 2020 Global EV outlook, the agency projected that the market for battery storage in stationary applications would grow from 2 GWh in 2019 to 10 GWh by 2025 and 220 GWh by 2030, with a majority of demand coming from utility-scale projects.
• IDTechEx: In a 2020 report, the market for second-life batteries in stationary energy storage applications would reach 13 GWh by 2030, with utility-scale projects representing the largest segment.

As per a study, a novel method of recycling lithium-ion batteries could help meet the skyrocketing demand for these batteries. The researchers found that batteries made with their new cathode-recycling technique perform just as well as those with a cathode made from scratch. In fact, batteries with the recycled cathode both last longer and charge faster.

In my opinion, the discussion and the report hint towards a progressive goal of handling the batteries and also early identification of the problems that may lead to major hazardous results in the later part of life.

It also shows the thinking and research abilities to find solutions and create awareness of major revenue-generating models or projects. However, markets are always tied to many factors influencing the actual demand, cost, availability of new batteries, regulatory environment, and the pace of renewable energy adoption.

Sources:- Mckinsey, springer, National Blueprint Lithium Batteries, Bloomberg, Guidehouse Insights, Circular Energy Storage, navigant research, IDTechEx, International Energy Agency