Colin Campbell was always a little skeptical about second-life batteries. Despite the appeal — squeezing useful life from used EV packs before they get recycled — the economics were tough, especially as the cost of new, LFP-based systems kept falling.
“I was like, how can this possibly compete with a purpose-built product that’s really optimized for the application?” Campbell, the chief technology officer at Redwood Materials, said recently on Catalyst with Shayle Kann.
Plus, for years there weren’t enough used batteries to go around. Battery recyclers like Redwood turn used batteries into refined battery materials, and so they need a steady supply to make their business model work. But without a sufficient stream of used batteries, recyclers have had to rely on another feedstock, the excess production scrap from battery factories, to sustain their operations.
But things have started to change in the last year, Campbell said. The volume of used EV packs that are coming back into supply has started to jump. It was not only good news for the recycling industry; it also helped to convince Campbell that building a second-life storage business was a viable strategy for Redwood.
In June, the company launched a second-life grid storage division, dubbed Redwoods Energy, and unveiled a 63 megawatt-hour second-life system, which powers a Crusoe data center microgrid. And already the Redwood Materials homepage has been dominated by this new energy storage work, with “Materials” bucketed in its own section.
The vast majority of Redwood’s feedstock is still manufacturing scrap, but its fastest growing input is now EV batteries — mostly NMC packs built about a decade ago. The company predicts that this year it will collect five gigawatt hours from vehicles, or about a quarter of its total feedstock.
That’s also roughly 80% of the end-of-life EV packs in the U.S., says Campbell, a unique position that allows Redwood to take advantage of this wave of used packs — and repurpose them for stationary storage, if only temporarily.
“We think of it as a detour,” Campbell said. “We can put these batteries out to a grid storage pasture for a little while to really extract all of the energy storage and power delivery value that they have and then go on to recover the critical minerals from them and regenerate fresh cathode materials.”
But it’s not just the growing supply that’s changed Campbell’s mind. He explained that Redwood has solved the other major challenge: integrating a diverse mix of battery makes and models into a single, stationary system — all while the system is running, or “hot.”
“We have developed a really low-cost, hot-swappable way of putting the packs in,” he said. “The cost of integrating the packs to the grid itself is really low.”
Listen to Colin Campbell’s whole interview on Catalyst:
That low cost is critical to competing with the falling costs of new, purpose-built systems using LFP chemistries. Those savings come largely from the straightforward integration of diverse packs. Rather than breaking the packs into cells, Redwood keeps the packs whole. After a quick electrical inspection, the pack gets wheeled out to a site and plugged in. Campbell says that building this easy-to-use system required innovative high-power electronics design, and was a critical step in making the whole business work.
The versatile integration system also allowed the company to make use of a wide variety of battery qualities. Campbell says that used batteries make the cut “95% of the time.” Most may not be able to sustain the required range or acceleration of a car, but grid storage is a gentler job.
“The amount of usable life that’s left in a pack doesn’t need to be that high in order for it to really be valuable and economically profitable to put back on the grid,” Campbell said, adding that a reusable battery may have only one or two years of life and low-hundreds of cycles left.
The difference in demand between EVs and the grid comes down to discharge speed. Packs are made up of many cells stacked in series. When one degrades, it becomes the weak link and limits performance during high-power applications like accelerating down the freeway. But grid storage often requires much slower discharge, so the weak link becomes less relevant to the performance of the pack.
That difference in demand also makes second-life systems especially well-suited for longer-duration storage.
“We can certainly play in the two-hour [or] four-hour markets with repurposed EV packs,” Campbell said. “Where we see them really starting to shine, though, are in the longer duration markets. So four-hour, eight-hour, maybe longer, maybe 20-hour. And that’s because when you are using these packs at much lower than their rated current, when you’re discharging them more slowly, you can tolerate more.”
Campbell thinks that Redwood can deploy “low single-digit gigawatt-hours” of storage this year and next year; that capacity will likely increase as second-use batteries hit the market, and not just from cars.
“We’re starting with what is easiest and most sensible, which is full EV packs,” he said. “Will we ever get to old toothbrushes for grid scale energy storage? I really doubt it. That seems unlikely to happen, but somewhere in between, I think there’s probably a happy medium. Maybe it would make sense to repurpose big power banks, kilowatt-hour-scale power banks, in this kind of application. [But] that’s a ways away.”
Editor’s note: This story was updated on July 29 to correct the first Redwood Energy microgrid’s capacity; it is 63 megawatt-hours, not 62.
