Texas project installed, manufacturing in the works
When we first spoke in late 2022, Stratakos planned to build the Texas plant in 2023 and start shipping the remainder of its battery stockpile in 2024.
The actual installation process turned out to be ​“a learning experience,†Stratakos told me last week, meaning it took longer and cost more than initially planned — ​“but it was worth it.†The company honed its technique for integrating the batteries into large-scale power plants, and improved its enclosure design along the way. Now itâ€s getting real-world data from daily plant operations in the ERCOT energy markets.
“There is a lot of talk in this category,†said Tim Woodward, who invested in Element as managing director at Prelude Ventures. This project shows Element can operate at the scale necessary ​“to get the big guys,†— in other words, large, sophisticated clean energy developers.
Onsite learning now informs Elementâ€s plans for large-scale manufacturing: The company is in early stage site selection to build a factory capable of assembling multiple gigawatt-hours of used battery enclosures per year, Stratakos said. That kicks off a race of sorts to determine who builds the first large-scale factory of this kind — fellow startup Moment Energy is in the early stages of building a 1 gigawatt-hour factory for second-life enclosures in Texas.
In the meantime, Stratakos is working to close a number of deals with the 2 gigawatt-hours of second-life capacity Element has stockpiled in a warehouse in Kentucky.
Element has not confirmed where this windfall came from. Incidentally, its backer LG had a major EV battery recall for the Chevy Bolt, which would have freed up a bounty of lightly used battery modules, once technicians fished out the defective cells. In any case, that in-house supply is a major differentiator at a time when second life batteries are still not widely available for bulk purchase.
“I donâ€t think anyone has that volume [of second-life batteries] sitting there, ready to be deployed,†Woodward said. ​“Batteries are lasting longer in the field than anticipated. Itâ€s not that common that youâ€re seeing batteries pulled out of even the earliest Teslas.â€
Further success will involve winning over grid storage developers, who currently buy new batteries basically 100 percent of the time. Those are high-tech, uniform, and come with a warranty from an established manufacturer, while second-life batteries are unpredictable, potentially dangerous, and a total wild west in terms of quality guarantees (hence the potency of Elementâ€s backing from LG).
Second-life startups typically tout the sustainability angle to attract first-time customers: Used batteries can reduce the environmental costs of the energy transition and keep valuable battery materials out of the proverbial landfill.
When it comes to actually closing a deal, though, ​“The number one issue is cost,†Stratakos said. Sustainability and circularity are definitely factors that customers consider, but ultimately thatâ€s ​“more of a bonus.â€
Second-life batteries donâ€t come free, and operating them safely requires time and money spent grading, evaluating, and monitoring the systems. All told, specialists like B2U Storage Solutions and Moment Energy say they can shave about a third off the cost of a utility-scale battery installation by picking used instead of new batteries. Element says it can cut 30 to 50 percent off the cost on a fully installed basis.
The grid desperately needs more very cheap batteries, especially in places where solar power is maxing out its usefulness during sunny hours and demand surges to lucrative heights at night. Now Element Energy has a live showcase for what it can do in the rough-and-tumble Texas energy market. If they can make it work there, they can surely make it happen elsewhere, too.
