Used and recycled electric vehicle batteries are getting a second chance at life through energy storage systems across the country. Lithium-ion batteries are retired from their role powering EVs when they still have a lot of life left in them, and repurposing them for one of the fastest-growing energy industry sectors is a no-brainer.
Diverting lithium-ion batteries away from landfill and into storage projects yields multiple overlapping benefits. First, it helps build up domestic energy storage capacity in a cost-effective and efficient manner. According to Dimension Market Research, the global Energy Storage Market is on track to reach USD $204.8 billion by 2033, up from USD 58.9 billion in 2024. This represents a massive compound annual growth rate (CAGR) of 14.8%.
As renewable energy sources become more prevalent in the national energy mix, energy prices become more volatile and can even dip into the negatives when supply outpaces demand. This is because wind and solar energy are variable, meaning that they produce energy when the sun is shining and the wind is blowing, irrespective of demand. As a result, utilities need to ramp up energy storage installation to stabilize inflows and outflows of energy to maintain profitability and to keep the lights on.
The second benefit is that reusing EV batteries for energy storage avoids throwing away critical minerals including lithium, nickel and cobalt at a time when supplies for those elements are growing increasingly tight. Currently, China has a chokehold on a huge number of critical mineral supply chains, and reusing batteries helps avoid tariffs and geopolitical complications. Plus, reclaiming critical minerals instead of purchasing new supplies avoids negative environmental impacts associated with mining and refining those minerals.
Third, battery storage provides a safety net for EV battery makers at a time when the market is cooling down in the face of major and unprecedented political pressures. BloombergNEF has lowered both its near- and long-term outlooks for EV sales in the United States for the first time ever as the Trump administration walks back Biden-era policies designed to boost electric vehicle adoption. The new numbers paint a grim picture for battery makers, but energy storage projects could provide a game-saving strategy.
Already, major automotive companies are taking notice and beginning to pivot. Last month, GM signed a “non-binding memorandum of understanding” with Redwood Energy to begin a used-battery powered storage venture intended to serve as an external power bank for data centers.
“The market for grid-scale batteries and backup power isn’t just expanding, it’s becoming essential infrastructure,” said Kurt Kelty, General Motors’ vice president of batteries, propulsion, and sustainability, in a recent statement. “Electricity demand is climbing, and it’s only going to accelerate. To meet that challenge, the U.S. needs energy storage solutions that can be deployed quickly, economically, and made right here at home. GM batteries can play an integral role. We’re not just making better cars — we’re shaping the future of energy resilience.”
The use of batteries as power banks for data centers could also prove to be a critical solution to another major energy issue of the moment. As artificial intelligence places unprecedented strain on power grids and raises the United States’ energy demands after decades of stasis, alternative energy solutions are critical for energy security as well as decarbonization efforts.
“Electricity demand is accelerating at an unprecedented pace, driven by AI and the rapid electrification of everything from transportation to industry,” said Redwood founder and CEO JB Straubel. “Both GM’s second-life EV batteries and new batteries can be deployed in Redwood’s energy storage systems, delivering fast, flexible power solutions and strengthening America’s energy and manufacturing independence.”
As a result, energy storage centers powered by EV batteries are popping up across the nation, and particularly in the Lone Star State. While the sector is relatively small now, it’s going to grow at a breakneck pace. And the timing could not be better, as first-generation EVs begin to proffer a steady stream of retired batteries.
By Haley Zaremba for Oilprice.com
The Global Struggle to Meet Renewable Energy Goals
Year after year, studies are showing that many countries around the world are falling short on their renewable energy targets by not accelerating away from fossil fuels to green alternatives fast enough. By the beginning of 2025, all 197 countries of the United Nations had endorsed the 2015 Climate Agreement, although United States President Donald Trump has since announced the withdrawal of the U.S. from the agreement. Most of the countries that signed the agreement have made tangible targets to reduce greenhouse gas emissions and take other action to limit global warming. However, stating these targets and actually meeting them are two very different things.
The energy think tank Ember published a report at the end of July assessing the progress with climate action across countries worldwide. It opens by saying that while 133 countries agreed to triple global renewable energy capacity at the 2023 COP28 climate summit, the policy action by many of these states has not aligned with the pledge. Ember’s study assesses the national 2030 renewable capacity targets of 96 countries and the EU, which together account for 97 percent of the global renewable capacity, 96 percent of electricity sector demand, and 96 percent of power sector emissions, as of 2024.
Almost two years ago, at COP28, 133 countries agreed to reach 11,000 GW of renewables globally by 2030. However, by July this year, only seven non-EU countries had updated their 2030 national targets, with five increasing targets and two lowering them. This was supported by several countries in the EU finalising their National Energy and Climate Plans (NCEP) in line with the bloc’s deadline. Within the EU, France and Spain increased their targets by 5 GW and 19 GW, respectively, while Germany and Italy made no changes. EU countries are not expected to update national targets between now and the next NECP deadline in 2029, which will focus on 2040.
Ember’s report shows that the global sum of national targets is just 2 percent higher than at COP28, at 7.4 TW, compared to a 7.2 TW target in 2022. While this target is double the 2022 global renewable energy capacity, it is far off the 11 TW 2030 goal needed to limit global warming to 1.5 degrees Celsius. Meanwhile, nine of the top 20 of the world’s largest power sectors have not yet updated their targets, including China, South Africa, Canada, Russia, Turkey, and the U.S.
Ember says that raising national targets is critical for advancing climate goals, enhancing energy security, and promoting economic growth. The think tank says that up-to-date targets help guide supporting policies, incentives and planning, and reduce risks like overcapacity or grid congestion. Going into COP30 in Brazil in November, participant states will likely face criticism for their lack of action in line with the aims stated in COP28 and 29, which could encourage countries to update their targets.
One of the biggest concerns at the international level of late is U.S. President Donald Trump’s backtracking on the country’s climate action. Trump called former President Biden’s Inflation Reduction Act climate policy a “Green New Scam. Greatest scam in history, probably.” Since coming into office in January, he has waged a war on green energy, moving to undo much of the former administration’s climate progress by cutting funds for green energy and electric vehicles, weakening regulations on air pollution and other climate issues, and pulling the U.S. out of the Paris Agreement.
The U.S. was rapidly becoming one of the world leaders in terms of the green transition under Biden, with other countries following in its footsteps, as seen in the EU and the U.K. However, Trump’s commitment to fossil fuels and disdain for wind and solar energy are expected to hinder progress at a time when the country’s power demand is set to grow significantly, as tech companies construct giant data centres, which will likely lead to higher greenhouse gas emissions in the coming years.
In terms of international progress, every five years, UN member states are expected to assess their progress toward implementing the Paris Agreement through a “global stocktake” process. The first report, which was published in September 2023, warned governments that “the world is not on track to meet the long-term goals of the Paris Agreement.” Most climate scientists agree that national pledges are, on average, not ambitious enough and will not take place fast enough to limit the global temperature increase to 1.5°C. Many suggest that greater international action must be taken, beyond the Paris Agreement, to make a meaningful impact on climate change.
“The Paris Agreement is not enough. Even at the time of negotiation, it was recognised as not being enough,” stated Council on Foreign Relations’ Senior Fellow for Energy and the Environment, Alice Hill. “It was only a first step, and the expectation was that as time went on, countries would return with greater ambition to cut their emissions.” This suggests that even if countries were to keep up with the aims of the Paris Agreement, more needs to be done on an international level to encourage a global green transition and hold states accountable for their action – or inaction.
By Felicity Bradstock for Oilprice.com