4.2.1. Economic Benefit Evaluation Model of Echelon Utilization
In order to evaluate the economic benefits and influencing factors of different echelon utilization schemes, this paper constructs an evaluation model of echelon utilization economic benefits, as shown in
Figure 6. There are two key assumptions in this model. First, this study assumes that there are enterprises with enough technology and capital to complete the corresponding work in each link of echelon utilization. This paper only studies the overall cost and benefit of the whole process from the perspective of the industrial chain. However, as for which specific enterprises complete which link of work, and the benefit distribution of enterprises with different roles is not in the scope of this study. Second, in order to simplify the calculation, the battery capacity retention rate is used to measure the overall performance of the battery and the only judgment condition of battery state of health, service life, and whether it should be transferred to the next link [
40,
41].
The time point of decommissioning of the battery from the whole vehicle and the judgment condition of the ultimate scrapping are all expressed by battery performance; therefore, all expressions related to the battery service life are also unified to the form of capacity retention rate in the process of model calculation. The specific definition of the capacity retention rate is shown in Equation (2).
where the
represents the battery capacity after
l cycles, and
indicates the nominal capacity of the new power battery.
With the use of the battery, the capacity retention rate will continue to decline. The capacity decay rate (
η) of each cycle is defined as the impact of the new charge-discharge cycle on the battery performance. The specific calculation is as follows:
where
indicates the battery capacity after
l + 1 cycle.
According to the study conducted by Schuster, the battery capacity retention rate can be approximately considered constant before the battery performance drop to the capacity diving point [
41]. The capacity retention rate can be calculated using the capacity decay rate (η) and cycles as follows:
And the battery capacity retention rate would be different due to the depth of discharge (DOD) under the use condition. According to the three DOD corresponding to the six application scenarios as abovementioned, different
η values are used to calculate the life of the echelon utilization battery, as shown in
Table 4.
As shown in
Figure 6, the costs incurred in the process of echelon utilization mainly include the purchase and transportation costs of retired batteries as well, as the costs of echelon utilization battery detection and regrouping. The revenue comes from battery sales revenue [
42]. It should be noted that the cost of each link is different due to the difference in battery performance in primary and secondary echelon utilization. As abovementioned, the echelon utilization profit can be calculated by the total revenue and expenditure, as shown in Equation (5). In order to make the results as broadly applicable as possible, the cost, revenue, and profit are all in term of €/kWh in this study. Note that the study converts RMB to Euro at the 2019 exchange rate.
where the
is the profit of echelon utilization;
represents the sales revenue of echelon utilization batteries;
indicates the purchase cost of retired batteries;
is the batteries transportation cost;
indicates the cost of battery detection and regrouping.
For the sales revenue of the echelon utilization battery: there are two calculation methods. The first method is based on the residual capacity of the retired LIP battery. It calculates profits according to the discount coefficient on the basis of the new battery price [
37]. The specific calculation is Equation (6) as follows:
where the
is the price of new LIP battery;
represents a nominal capacity of the LIP battery;
indicates the capacity of LIP battery after decommissioning;
is the discount coefficient [
37].
The second method is based on the price of the new LA battery and the different cycle life of the two batteries. The specific calculation is Equation (7) as follows:
where the
is the price of the replaced LA battery in the echelon utilization scenario;
represents LA battery cycle life;
indicates the cycle life of retired LIP power battery.
Finally, the lower one in the calculation results of Equations (6) and (7) is taken as the battery sales price, which is more likely to be accepted by the demander of the echelon utilization scenario, as shown in Equation (8):
Purchase cost of retired battery: when the LIP battery is retired from the vehicle, the capacity retention rate is 80%. Its value is taken from the industry average data, about 13.4 €/kWh [
10].
Battery transportation cost: in this study, only the use cost of freight cars is included, and the cost of vehicle purchase and depreciation is not considered. In order to minimize the cost, trucks with different carrying capacity will be selected according to different transportation needs. In addition, the transportation process is divided into two types according to the distance, including intercity transportation and trans provincial transportation. In this study, the average distances of the two types of transportation are 50 km and 500 km, respectively. Most of the echelon utilization scenarios are short-distance intercity transportation. Only when retired batteries are applied to renewable energy power stations and large-scale communication base stations, can long-distance trans provincial transportation be considered [
43]. According to the current use of freight in China, the cost of intercity transportation and trans provincial transportation can be calculated, as shown in Equation (9):
where the
is the intercity transportation cost;
represents trans provincial transportation cost;
indicates the transportation distance.
Detection and regrouping cost: as echelon utilization is still in the exploration and preliminary stage, there is no open direct cost data available. Based on the operation cost of the existing battery treatment plant, this study estimates the detection and regrouping cost of the battery through cost apportionment methods. Considering the different technical difficulties of the different echelon utilization scenarios, the scenario correction coefficient is added to modify the echelon utilization calculation model developed by the National Renewable Energy Laboratory (NREL) [
43], as shown in Equation (10):
where the
is the enterprise detection and regrouping cost of echelon utilization, including fixed asset cost and labor cost;
represents the correction coefficient of battery detection and group cost in different echelon utilization scenarios which is related to the processing difficulty and time [
37];
indicates the annual production of echelon battery.
4.2.2. Economic Benefit Analysis of Echelon Utilization
Based on the evaluation model, the benefits of the echelon utilization of various schemes are calculated, and the results are shown in
Figure 7. Firstly, it can be seen that most of the schemes of primary and secondary echelon utilization can achieve positive benefits. It shows that if the relevant industrial chain is coordinated, the echelon utilization of retired power battery is profitable. Then the cost of using power battery for BEVs is leveraged by echelon utilization [
20]. With the development of battery detecting and regrouping technology, the benefits of echelon utilization are expected to expand in the future further. In addition, only LIP battery has the technical feasibility of echelon utilization, which also means that echelon utilization is expected to further increase the cost advantage of LIP battery comparing to TL battery.
Second, compared with the three scenarios of power battery replacement in the primary scheme, the profits of all the secondary schemes are lower. It can be explained that the increase in echelon utilization levels will lead to the decrease of echelon utilization income. Meanwhile, this shows that it is reasonable to study only the primary and secondary schemes in this paper. In a word, multi-level echelon utilization is only a theoretical concept at present. Hence, more attention should be paid to the development of the first level echelon utilization scheme in industrial practice in the future. Moreover, the two-level scheme should be properly considered according to the urgency of the scene demand.
Third, the performance matching of different batteries has a significant impact on the benefits of echelon utilization. From the analysis of the primary echelon utilization scheme, it can be seen that the echelon utilization scenario based on the power battery for transportation purposes can achieve greater benefits, with the maximum profit of 30.21 €/kWh. While there are echelon utilization scenarios for energy storage, only the renewable energy power station can achieve positive benefits. Its profit level is far lower than the power battery scheme. This is mainly due to the difference in performance requirements between the power battery and the energy storage battery. That is to say that the retired batteries of NEVs that were originally used as power batteries are more suitable to continue to be used as low-performance power batteries. If it is to be used as the energy storage battery, the processing cost of the battery will be much higher, making it difficult to make profits. Of course, the battery design of NEVs is only based on the requirement of the power system itself at present without considering the potential echelon utilization in the future, especially for energy storage scenarios [
44,
45,
46]. Thus, if the performance requirements of the energy storage battery are properly considered at the beginning of the battery design, the evaluation results may be significantly different. This is also an important decision-making factor for relevant enterprises to consider seriously.
Generally speaking, E-Bike is the application scenario with the highest profit from echelon utilization at present. However, the demand for retired batteries of E-Bike is limited, and urban regulatory policies are being tightened continuously. It is expected that the follow-up market scale will not be able to grow significantly and cannot accommodate the increasing number of retired power batteries of NEVs. At the same time, microelectric vehicles, commonly known as low-speed electric vehicles, have not been officially recognized by the Chinese government. Therefore, the electric-special vehicle may be the most feasible entry point for automobile enterprises to try to use battery echelons in the near future. In the long run, although the benefits of energy storage scenarios such as renewable energy power stations are relatively low, there is a very broad further market. Especially, China has made the strategic goal of building a low-carbon society and low-carbon industry. China needs a large number of energy storage batteries, which will play an important role in reducing clean power waste and optimizing the balance of power grid urgently. In this sense, the echelon utilization of energy storage scenarios may have more market potential in the future. [
37].