Safety Concerns Spark Plans to Bar Used Electric-Vehicle Batteries From Power Storage

China’s energy agency has proposed banning retired electric-vehicle (EV) batteries from being used for power storage on a large scale, amid concerns over safety and a lack of proper testing and evaluation guidelines.

The move may complicate efforts to dispose of the millions of batteries powering the Asian nation’s growing fleet of electric cars after they reach the end of their useful lifespans.

EV cells are typically no longer regarded as suitable for use in cars once their maximum charge decays to 80% of their original capacity. The sector has been exploring ways to repurpose discarded batteries for energy storage and other uses, a process known as cascade utilization.

But authorities have started reining in such projects since an explosion at an energy storage facility in Beijing in April killed two firefighters, though the results of an investigation into the incident have not been made public.

The draft proposals (link in Chinese) released for public comment Tuesday by China’s National Energy Administration (NEA) would outlaw “in principle” the use of discarded vehicle batteries for “large scale” energy storage projects, though the terms were not defined.

Projects that have already been built or tendered must undergo regular evaluations and stricter monitoring procedures, the document added.

However, the impact of the draft rules is likely to be limited as most projects involving recycled EV batteries focus on small-scale energy storage and their use in telecommunications base stations, said an industry insider who declined to be named in order to speak freely.

Cascade utilization could be a promising way for companies to reduce battery wastage and generate income from retired cells. But the sector is struggling to determine accurate ways to check, maintain and reuse the large variety of discarded cells.

Technical measures are needed to even out the amounts of residual energy in used batteries, said Zhao Guangjin, the director of a grid waste recycling laboratory at State Grid Corp. of China. He added that incomplete operational data for many decommissioned cells makes it hard to judge their safety, lifespan and adaptability to different scenarios.

The problem is aggravated by the fact that battery manufacturers use different specifications, leading to differences in design, materials and performance that make the safety of repurposed cells difficult to predict, according to a person familiar with the issue at industry leader Contemporary Amperex Technology Co. Ltd. (300750.SZ).

The NEA’s draft rules come after East China’s Shandong province issued a notice last month banning the use of decommissioned EV batteries in cascade utilization, a move widely seen as a response to the explosion in Beijing a month earlier.

The document is open for public comment until July 22.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)

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