Charged EVs | Providing second lives for fleet EV batteries

Zenobe’s stationary storage business complements its turnkey EV offering for fleets.

• One compelling reason for fleets to use a third-party expert to manage their electrification projects is to avoid the massive capital investment and the financial risks it entails.

• One of the financial risks of going electric: After a few years, commercial EV batteries may no longer meet operational requirements. Zenobe repurposes these batteries in stationary applications, generating revenue and helping its fleet customers to finance their EV projects.

• Zenobe uses the second-life EV batteries to build portable energy storage units, which can help event coordinators, movie studios, shipping firms and other businesses to save money while making their operations quieter, safer and greener.

Here at Charged, we’ve covered a lot of companies that provide fleet electrification services. However, we’re far from done writing about them (and readers, I hope you aren’t tired of reading about them), because each one seems to have its own unique set of offerings and its own niche in the evolving commercial EV ecosystem.

Fleet electrification providers offer a smorgasbord of hardware, software and services: vehicles, chargers, installation, maintenance, energy management and more. Some provide one or several “layers of the stack,” or “links in the value chain,” and some offer a turnkey package that includes all the necessary bits, enabling customers to electrify their fleets for a fixed fee.

One of the most valuable benefits these companies can offer is to relieve fleets of the financial risk involved in going electric. Every facet of the fleet electrification experience—vehicles, chargers, installation—requires investment, and thus risk. Some fleets have lost bundles because (to cite just a few examples) they bought vehicles only to see their resale values plummet, got stuck with charging hardware that turned out not to meet requirements, or failed to plan for the ongoing costs of maintenance.

Under a fleet-as-a-service model, a fleet customer can transform some or all of its CapEx to OpEx. The electrification provider makes the investments in vehicles and/or charging hardware, and takes on the associated risks.

Battery degradation is one of these risks, and any fleet manager that owns electric vehicles needs to find a way to deal with it. Zenobe has a particularly neat approach to this issue—the company has leveraged its background in stationary storage to create second-life opportunities for fleet customers’ batteries.

Zenobe was founded in 2017, and now owns and manages around 735 MW of grid-connected batteries and, on the fleet side, some 1,200 EVs. The company has its global headquarters in London, and is a major operator of battery storage connected to the UK’s National Grid. It’s also active in Australia, New Zealand and Benelux, and has set its sights on the US.

Charged spoke with Zenobe co-founder and Director Steven Meersman.

Charged: We’ve covered a lot of companies that help fleets electrify, but I think you’re the first one that has talked much about the battery second-life issue, which is certainly important. How did you go down that road?

Steven Meersman: We started as a grid-scale battery developer. We solve first-mile electric grid issues—how do you get wind power turned into electrons and then get it to customers to be consumed? Now there’s a last-mile problem emerging, as people are starting to charge electric buses in larger numbers.

If you put 100 or 200 electric buses in a depot, that’s the equivalent load of the Empire State Building popping up overnight—say 6 to 8 megawatts. The challenge is that often the power’s not available, and the operator doesn’t know where to start. So, we got involved in that, putting small stationary batteries in bus depots to avoid peaks and save costs. Then, operators started saying, “Hey, Steven, we’re sitting at a table with the utility, the charger provider, the vehicle provider and all these other parties. I need a single point of accountability. Can you do that?”

So, we turned the whole thing into a service—from grid to plug, we guarantee your vehicle will be charged on time, with enough juice for a full day’s work, at the lowest possible cost. If we do not do that, we will pay for a replacement vehicle for that day. That was step one.

We started doing that just as subsidies in the UK started kicking off for electric buses, but the subsidies weren’t enough. They paid for the differential between the diesel vehicle and the EV, but nothing for the infrastructure, so the operator still had to put in capital to go EV, and then deal with these risks over a long period of time. So we said, “We’re already funding charging infrastructure and treating that as a service. Why don’t we do the same with the battery on the vehicle?” Because we own and operate quite a lot of batteries.

Customers were nervous: “I need to run these vehicles for 12 years. Will they have enough range after 5 to 7 years? God only knows how much a new battery’s going to cost, and what do I do with the old one?” So, people would buy the body and the chassis of the vehicle, and effectively rent the battery.

When you remove the battery from the vehicle because it can no longer do the 250 kilometers that that vehicle needs to do, there’s still some life left, often 70 to 80%. So, if you can find a second life for it, you can finance the first life, and effectively guarantee the vehicle range for the operator. We provide the capital, so it becomes a zero-CapEx solution. That was step two of our model.

We then started getting a lot of data from the vehicle telemetry, from the charging infrastructure, from the grid, and we reverse-engineered the driver schedules, and started leaning into that. How can you save on the electricity consumed by your drivers by managing your route scheduling? How do we integrate renewables from the rooftop? All to drive down the cost of adoption.

Somewhere along the line, customers said, “You’re doing my batteries, you’re doing my charging infrastructure, you’re doing my renewables. Can you finance the vehicle as well?” And eventually we turned the whole thing into a turnkey offering. But it doesn’t have to be a turnkey deal. It’s a buffet table, and the customer picks the parts of the offering that they like.

We’ve now got more than 1,200 EVs—mostly buses, some trucks, cement mixers, last-mile delivery vans—that we own and operate, including the associated charging infrastructure, plus another 500 to 700 where we just do the charging as a service. We’re in the UK, and we’ve expanded from that physical and electrical island to other electrical island markets, following our customers. That’s how we washed up on the shores of this great country—by following our customers.

In the US, we’ve started with school buses, but we also recently picked up a lot of new battery leases. We understand these contracts very well, and we are continuing to manage them for these transit agencies. We’re using that to accelerate our entry into the transit space.

We also have our first projects under our belt in Australia and the UK on the truck side, and we’re looking at Class 7 and 8 truck projects in the US.

Charged: How does the process of repurposing the batteries work?

Steven Meersman: We take that battery, we test it, we grade it, then we do some clever stuff to the software, and put it in a containerized unit—it looks like a Tesla PowerPack, or a diesel generator, except without the fumes—and we start using that in new applications.

Now, that was an experiment for us initially. Where can you use this unit, and where can it be competitive? Rather than competing with first-life batteries (which have ten-to-fifteen-year warranties, and are mass-produced in China—we can’t compete with that scale), we look for niche applications, such as replacing diesel generators at festivals, film shoots, and in the construction space.

Last year we powered Massive Attack at a festival in Bristol. We provided 19 units that came from old bus batteries in Sweden, some of the first that were deployed in Europe, and powered everything from keeping the air cool to powering the lights. It’s much cheaper than running diesel generators, it’s ecologically sustainable, and it’s less noisy, so it’s a lot more pleasant.

Second example: we powered some famous actors’ movie trailers while they were shooting in remote locations. We did Fast & Furious, we did The Crown, one of the Marvel movies, and a bunch of other interesting things.

We also do hybrid applications. The battery sits alongside a diesel generator, and acts like a hybrid car. You reduce your diesel consumption by 60%, which is a huge saving. But also, if you go even partially electric, it reduces noise. On a film shoot, traditionally, they need to block the whole road for a shoot. Why? Because the generators need to be far away from the cameras and the microphones. If you don’t have to do that anymore, you can have a much smaller footprint.

The third application is construction. On some projects, you’ll have a lot of tower cranes, which means you’ve got a lot of diesel generators running there, for years. We allow those crews to downsize their use of generators.

We’ve got about 46 of these small portable units of about 160 kilowatt-hours running around the world. And I do mean the world. We’ve set up microgrids in the Sahara Desert for an electric race. We put everything on a boat to provide shore-to-ship power.

We’ve done Extreme E as well, and that was really cool. We had a methanol storage medium to provide hydrogen, and that, together with the solar, went into the batteries, but then to squeeze even more efficiency out, we did a DC microgrid, rather than have the double conversion losses of going from DC to AC and back again. We built that in Scotland, in a matter of a week. It ran there for a couple of weeks in an old coal pit, and when the race was done, we packed it all up, and the customer just paid for what they used.

We’ve used some of these batteries for providing shore-to-ship power for an 8,600-ton container ship. When they’re in port, they have their big ship engines, sometimes two megawatts. A cruise ship is like a few six-megawatt engines. They’re running at about 3% utilization, and probably about the same efficiency. They’re discharging not just CO₂, but NOx and fine particulates, they’re doing it at a dock in the center of the city, and they’re making lots of noise.

Together with Zuidnatie, at a terminal in Antwerp, we took one of our Powerskids and a small biodiesel generator, and connected that to the ship so they could turn off the engines while they were in port. They saved 400-600 liters of diesel per day. If they had used just the Powerskid they might have saved 1,800 liters of diesel every day. We actually had to put somebody on guard there, because the captain wanted to take the whole thing with him to his next port of call. He said this also reduces maintenance time, because if the ship’s engines are not running in port, they have more time to do necessary repairs.

Charged: These second-life battery units in a container, do you build those yourself?

Steven Meersman: We’re trying not to be a manufacturer, because we like that we are technology-neutral. We briefly held a stake in one of the integrators that was building these for us, to our design. We’ve now passed on to another partner, who’s got a stronger automotive engineering background, and can really bring the manufacturing know-how to scale that up. That being said, we’re still quite involved in the product design.

One clarification: We’re not selling the battery systems, we’re renting them out.

Charged: You have one set of customers on the fleet side, and on the other side, you have the users of the second-life batteries. Does this mean you have to balance the numbers of batteries you’re getting from the old vehicles with the second-life batteries you’re providing?

Steven Meersman: Not really. On the second-life side, because many of our vehicles are still quite new, we’re vacuuming up batteries from earlier deployments. In Europe, that means Spain, Scandinavia and the Netherlands, where people started electrifying in earnest in 2016. In the US, it’ll be from the early adopters, and we may have to augment that with production-line scrap from the various gigafactories that are popping up. We prefer not to do that. We think over the next few years there will be enough true second-life batteries available to continue.

Charged: What can you tell me about vehicle-to-grid applications? Ready for prime time, or still in the pilot stage?

Steven Meersman: Well, there’s three challenges with that. One: Why is your truck standing still? Why isn’t it driving and earning money? Two: People tend to like their vehicle to be fully charged before it leaves the depot. How does this conflict with that? Three: Who’s going to pay for that battery degradation? If you look at the most valuable thing you can do with your vehicle battery, it’s turning it into miles, not turning it into ancillary income.

That said, there are pockets where this is massively lucrative. If you look at a school bus compared to a transit bus, a transit bus typically runs 365 days a year—the school bus, only 180. I’ve got all these buses parked during the summer holidays, and maybe there’s an opportunity there to earn some money. Even with transit, on the weekend, you’re running probably two-thirds of what you’d run on a weekday.

But you’ve got to factor in all the costs. And whoever’s managing the V2G system for you also wants a slice of the action. If we fast-forward 10, 15 years, when you have huge fleets and you can share the load, so the battery degradation is minimal, it’s a different story.

Some of the stuff we’ve done is V1G, which is unidirectional—you slow the charging speed or interrupt charging briefly to provide support to a network, or for frequency regulation on the grid. That’s a different story. You don’t have the degradation, you can do it with any standard charger, any bus, with a bit of smart software, and you can get a certain percentage of the value that true V2G would do. That may be a better trade-off.

Charged: We always like to hear specific examples of fleets that had some unique problems, or maybe some successes. Can you give us an anecdote about a problem that you were able to solve for a customer?

Steven Meersman: We have a lot of anecdotes. Say your utility is saying it’s going to take two years to deliver the transformer you need. In many cases, that’s because the utility has one or two preferred suppliers that they go to, and many other utilities go to those same two suppliers. What if you can go to another transformer supplier, and ask the utility, “How long would it take you to onboard this alternative supplier?” In many cases, that might be 6 weeks or 12 weeks. If you then add a shorter lead time for that third transformer supplier, you might be able to shave between 14 and 21 weeks off an install. That’s something we did in the US on a project.

Another fun example is how people overestimate the amount of power they need. We did a deployment in the UK, which was 130 transit buses. If you calculate 130 vehicles times (say) 120 kW chargers, you would say you need 13 to 14 megawatts of grid connection. However, the vehicles rarely charge at the same time, and some do much less mileage than others. So, when we actually modeled all that, we were able to bring the power requirement down to about 7 megawatts.

Now, this was in the center of Coventry, which was bombed flat during World War II, and when they rebuilt the infrastructure there, they put less copper in the ground, so the voltage in downtown Coventry is lower than in the rest of the UK, which means less capacity. We were short just under a megawatt to get this going, so we put a second-life stationary battery in there to provide that last bit of oomph.

Also, we really leaned into driver behavior, and we worked out that you can reduce the energy consumed by the drivers, by working with them and training them, by 40%. That meant we could put 40% less infrastructure in the ground. If we hadn’t done those things, we wouldn’t have been able to build that in the center of Coventry, and we would’ve had to move the whole depot.

There’s lots of savings, but you only get them from real data and real experience. And that’s why we advise all of our customers to electrify in phases. Don’t jump in and measure the water with both feet. Do five vehicles, then really monitor that data, take it to 10, take it to 20, and scale it up, because you don’t know what you’re going to learn along the way.

In Scotland, we have a depot that’s close to the sea. The prevailing wind direction is perpendicular to the charger. You know that picture of a bridge that starts moving up and down and eventually bounces itself apart? That wasn’t quite happening with the chargers, but it was close. The cable starts moving. The bus was parked too far away from the charger, so the cable barely touches the ground. The wind started moving it, and the connection point with the vehicle started wearing out and causing false connections or disconnections.

How do you work that out? You can’t do that sitting in a call center 1,000 miles away. No, you’ve got to go there. Our ops people spent several nights in that depot trying to find the “ghost in the machine,” and eventually worked out that when the wind comes from that direction, it puts torsion on the charger cable. So, we moved the ramp so that the bus drivers would park the buses slightly closer. Problem solved, no big investment.

Charged: Obviously it takes some sophisticated software to make all the smart charging and load balancing happen. Do you have your own in-house software or do you use a product from another company?

Steven Meersman: We have our own. We had to build all this stuff, because we couldn’t buy it in the market to the degree that we wanted. I think now the market is evolving, and some bits we’re carving out to third parties, like some of our telemetry data ingestion. We’re giving that to a third party called Go Metro that we’re now a minority shareholder in, but the core software, the energy management system, we built ourselves, initially to run our grid-scale batteries.

Don’t forget, we’ve got 730 megawatts of transmission-connected grid-scale batteries that we use to optimize entire countries’ energy grids, and we bring that know-how to the fleet side, which puts us in a unique position to do a lot of this V1G, etc. It also brings a level of data and reliability that people haven’t really seen in the fleet sector. We monitor all our assets 10 times a second, which allows you to estimate regeneration rates better, which has allowed us to find a lot of savings on energy consumption. If you sample once a minute, or once every 30 seconds like many diesel telematics businesses do, you would’ve never found that opportunity.