Battery Revolution Clubhouse Recording - Closing the Loop: Repurposed EV Batteries in Mobile On-grid ESS

0:00Transcript

0:00Thank you everyone for joining us. Really, really appreciate it. We're here for our Battery Insiders slash Battery Evolution, the 68 session today. And yeah, we have a really exciting topic with us. Today we're looking at the topic of Closing the Loop, Repurposing EV Batteries in Mobile On-Grid ESS. We've got a very knowledgeable speaker with us, who's Lorenzo Bergamashi, who's the co-founder and CEO of Eli. So yeah, very excited for that. I think it should be an interesting conversation, but I'm not here by myself only. I've also got Mariam with me, co-moderating today. So Mariam, would you like to quickly introduce yourself? Yes, and I am very excited for today's topic as well. I'm Mariam, I'm co-founder at Pulsanyx. Pulsanyx develops equipment to monitor the performance of batteries. So why I bring this up is because almost every OEM that we work with is looking into the topic of how can we repurpose EV batteries. This is a very important topic. It's talked about a lot, especially in Europe, in relation to the battery passport.

1:09So I'm sure Lorenzo, you're going to have quite a lot of questions here in the audience, if not from Simon and I, then from everyone in the room. So I just want to say thank you for being here, and I'll kick it back to Simon to introduce how the session will go. Thanks so much Mariam. Definitely excited to hear some of your perspectives there as well. And yeah, my name is Simon Ingerker. I'm the founder and chair of Battery Associates. And yeah, this session's now reached back in the COVID days about three or three and a half years ago. And we have been getting together and really discussing with all leaders in the battery space and lots of other great, other fellow battery enthusiasts, all topic batteries. So we have been covering, you know, from recycling and manufacturing and all different applications. So we have a range of different topics. And yeah, we are really excited to have Lorenzo with us to talk about the topic, which I think quite a few of us have been debating before.

2:03So I think it's one of these hot topics. What should we do with all of these used EV batteries? And I think Lorenzo can give us a perspective. And I think he has quite interesting background also, also before starting LI with survival and others. But I think Lorenzo, you're the best to tell us more about that. So with this, over to you, Lorenzo. Thanks for being here. Thanks, Simon and Merem for inviting me to the podcast. Yes, very excited to be here today. And hopefully I can answer some of some of the questions. But I'm also interested to see what the audience has to say. So I'll briefly introduce myself. Yes, my name is Lorenzo Bergamaschi. I'm the co-founder and chief technology officer at Alley Energy. And prior to starting the business, my background comes from the automotive industry. So the beloved automotive industry, developing lithium-ion batteries and high voltage systems for commercial electric vehicles. This was at Arrival, where we had the opportunity to design batteries from the ground up, from prototypes to pre-production.

3:08And my role there was to manage the validation and testing of these batteries and navigating the complex world of validation and certification, which is quite important when it comes to batteries, as we all are aware of. And we actually set up a unique facility in the UK, equipped for battery testing from cells to full battery packs. And from there, one thing led to another. And I co-founded Alley Energy, which is a startup based in London. Up until now, we've raised our pre-seed round and we've grown the business from three founders with Jonathan, Jack and myself to 15 energy hustlers, as we call ourselves, in 12 months. And it's been an exciting journey. And it's even even more exciting time for the business at this point, because we started generating revenue and we're delivering our first units to customers. So it's it's it's going to be a very interesting journey from now on. What is Alley? Alley is all about distributed energy storage. So our proposition is a service with a very clear value proposition.

4:18So we save our customers money on their energy bills. And at the same time, we provide flexibility back to the grid and how we do that. Well, we use batteries. So this is what I'm here to talk to you about today. So I think having said that, probably the best thing to do is introduce a bit better what we do here at Alley. So there is there's a massive problem, which is we have more and more strain on any grid in Europe, in the US, pretty much anywhere in the world. The grid was was built many, many years ago, and it's not fit for purpose for the decarbonisation efforts, the decentralisation of generation of power and the electrification that's coming and has already started. And what we've seen is the grid is very weak at its edges. And what we mean, its edges is where consumption happens. That is apartments, commercial properties, pretty much anywhere where the capillaries of the grid reach. And we're facing a massive challenge that we need a lot of investment in infrastructure.

5:40and we see batteries and especially smart assets behind the meter as a great way to to reduce the need for this great investment, but also to support the grid in the transition phase with flexibility. And we've been building a commercial of 320 kilowatt hour system, which is built with repurposed battery packs. We started off by using four EV battery packs from from from Tesla Model 3s. But we are expanding our system to cater for pretty much any electric vehicle battery that exists on the market. Why we're doing this? Because we see a massive problem that there is a lot of EV batteries stockpiling at EV recyclers. What happens when they reach second life is something that we always talk about, but we never talk about what happens when an electric vehicle is prematurely written off. And by that, I mean, a vehicle is being driven on the road. It suffers minor damage or, you know, damage that could be completely unrelated to the battery, an electrical fault or a crash.

6:54And the battery then goes through a whole set of hands from the insurer to insurance company that writes the vehicle off all the way to the EV recycler that has a vehicle that needs to be decided what to do with. And EV recyclers have been around for decades handling internal combustion engine cars. They sell vehicles for parts and it's a great source of spare parts for vehicles. But there's an issue that with more electric vehicles coming to these EV recyclers, they have no idea what to do with these batteries, high voltage, extremely high capacity with a lot of energy battery packs. And this is the problem that we're trying to solve here at Ally. What do we do with these battery packs? Well, you have two options. The first option is you recycle it. And even there, there's big issues because battery packs are all built differently. They need to be handled. As I said, they're high voltage, so they're quite dangerous. They're quite dangerous assets.

7:59And so and also there's very little availability of recycling centers at the moment. And the second option, which is our preferred option, what we do here is we repurpose them. And by that, I mean, we take the battery pack and we give it a second application. So the first application being an electric vehicle driving on roads. What we do is we give it a second life in energy storage for grid application. And those these applications are typically designed to be less strenuous, less hard on the battery pack than an electric vehicle. So there's no regenerative braking, the C rates so that the rate at which you discharge and charge your battery is much lower. And so they're very well suited for these kind of applications. And a question that a lot of people ask is, well, what do you do when you get these batteries? So what we do is we keep them as a whole unit and we don't dismantle it into modules, cells like other players might be doing and have been doing for quite a few years.

9:04And the reason we do that is because a batteries are moving in the direction where recycle repurposing cells is tricky. The cells are becoming bigger, way larger capacities and the battery packs are being built differently in the way taking cells out of it after is very, very difficult because there's all sorts of bonding agents and glues and matrices. So taking cells out is tricky. And also we're moving to cell to pack arrangements where cells are pretty much the entirety of the battery pack and it's not built in small modules, but it's one battery pack as a whole. And also because it ends up allowing a system to cost and be cost much less than having to go through this whole process of dismantling the battery, training a lot of personnel in high voltage, grading the cells as they come out because they probably degraded in different ways, handling and storing these cells as we wait to integrate them. So actually, taking the entire battery and integrating it in ESS is a great way.

10:15And also we can keep all the electronics and connections that are originally designed and been put in that battery pack. And we can also use the battery management system that has been designed for that specific EV battery, which is a massive advantage because we've seen that the majority of issues with battery energy storage installations are issues with the cell connections and a lot of issues with poor quality in the manufacturing and also with the predominance of LFP batteries coming to market LFP being lithium-ion phosphate, new chemistries, which are cheaper and inherently safer. That poses an issue with a state of charge algorithm. So basically, dismantling an entire battery, having to design your own battery management system, having to design your own mechanical structure, having to then integrate it with your own cooling system, then having to provide the software for the battery management system to make sure it's safe and then recertifying this whole assembly for a new product is an extremely costly exercise.

11:27And actually, startups are quite prohibitive for small companies to even attempt this, yet let alone for big automotive companies starting a battery program. So that's the reason why we do this with batteries and from EVs. And a question that we get asked a lot, and I think it's probably going to be the core topic of this conversation is how do we ensure that these battery packs are safe for us to use? And this is an interesting debate and what Ally is focusing a tremendous amount of effort internally to do. And we started off by developing great partnerships with our suppliers of EV batteries, the EV recyclers. So we've announced publicly that we've made a partnership with Cinetic in the UK, which is the largest handler of written-off vehicles. And it all starts there. So it all starts at the EV recycler with the testing of the batteries. And then we do a lot of testing as well internally once the battery has been purchased by us and reaches our facilities before even thinking about integrating it into an ESS.

12:39So for us, safety is the ultimate priority. And we've seen that conventional metrics don't stack up to what we're trying to achieve here. So we can simply assign a state of health to the battery and decide whether we're going to use it or not. It's a much more complicated problem because it's not only about the electrochemistry of the batteries, it's all about the mechanical structure, the integrity of the battery management system. Even the integrity of the data that comes out of it is critical because we need to trust the sensors that exist in the batteries to make sure that they're always kept safe and within their operating limits. So I think this was like a brief introduction of Ally, our repurposing efforts, why we do it. And yeah, I'm open to answer any questions that you might have. Lorenzo, thank you so much for that introduction. And you're quite right. The first thing that came to mind was safety. And my question to you is, you know, Ally, it is a new approach, the way that you are not going to be dismantling the packs, not going down to the cell level and doing the performance testing on that level, not having to reinvent the wheel with the BMS and putting it into a new mechanical structure.

13:53And in fact, I've seen that, you know, things that maybe people may not even think about, like the bonding agents, it's extremely difficult sometimes to even remove the cell from the pack. However, that said, how are you ensuring that safety is maintained, especially when it comes to things like cell balancing or each battery pack could have a different health or degradation status? What mechanisms or what strategies are you employing in that case? Yes, thank you, Maryam. That's a great question. And yes, and partly the answer to that is we use batteries from EVs and we maintain the original battery management system. So we interface with it on communication protocols common to the automotive industry and we retrieve all the data very quick intervals all the time from the battery. We interrogate it and we know the status of every cell, the voltages, currents, temperatures, any status codes that might be popping up, any errors that are present. And the battery management system is kept intact in the sense the safety systems that are present are still working.

15:13What that means is the contactors inside the battery and are activated in the case of any issue with overcharging, over discharging, if the temperatures get too high. So actually we are keeping this first line of defense that the battery possesses. But what we do is we've developed an energy management system. So we have multiple of these batteries in the system. In our first Alley Max, we have four and we operate these batteries at the same time. So monitoring each and every one of them independently and acting upon any safety concerns with each individual battery. And an interesting question is, how do you handle the fact that these EV packs have different state of health, typically even different chemistries? If you go, if you span out from the model and make of the vehicle, there's different voltage architectures, different capacities. And typically when you when you aggregate batteries together, these are big considerations that you have to take. So we've designed the system to be completely independent.

16:26So each battery interfaces with AC independently, which means that we can decide how much energy comes out of each of these batteries. So for example, we might have an application where one battery is more degraded than the rest. We, our algorithms decide, well, we're going to split the power unevenly. So three, the three healthier packs are being cycled more aggressively than the one that is more degraded. Or conversely, say for example, one battery has less energy than the rest. Well, again, we do the same things. We balance them out over their life to make sure that, you know, when you end the life, the useful life of the asset, you try and match the degradation of these packs as much as possible. Because when the, pretty much, when one of the first batteries is low instead of health or needs to be replaced, well, you then have a system that has reduced capacity. So if we have a serious situation where one of these packs has an error or it's, we deem to be unsafe.

17:34So for example, we're seeing some strange behavior on the cells, we can disconnect it. So we can still operate the asset with other three and we can keep it basically a reduced performance until we intervene and replace it. And we've designed the system to be completely easy to maintain. So one of the batteries can come out and replace with another one pretty quickly. That's how we've designed it from a mechanical point of view and from a cooling point of view. So that's it. So that's like a very simplistic way of doing things or explaining it, I mean, but I think it kind of gives the idea of how we tackle the issue. Thank you so much, Lorenzo. And just a follow up question to that would be, Ally, what is the scope of services? For instance, where does your EV repurposing partner or recycling partner, their scope of work ends and Ally's scope of work begins? And do you then do the continuous maintenance or performance management of your batteries on site?

18:42Yes. So our engagement with the EV recyclers is, so typically EV recyclers have a lot of batteries coming into their facilities and they have pretty much no idea what to do with them. So we help them to understand and grade these battery packs from a safety point of view. So we give them a score from safety. So basically the highest score is we were willing to take the battery for repurposing. And then there's other scores that, for example, the battery is fully functional, but there's some minor damage, for example, a connector. And we still take them. But we also help them to understand where the faulty batteries or the dangerous critical batteries are. And we help them highlight the ones because those will go directly to recycling. And it's actually improving their safety in their facilities because if you identify a critical battery early on, then you can store it in an adequate way. You can avoid thermal events, spontaneous thermal events that nobody likes.

19:59And that's our engagement with our partners. And it's also very important from a financial point of view because these batteries have a price. And recycling typically pays way less than repurposing because it's down to the raw material cost of the nickel and the cobalt and everything that you take out from the battery for basically producing new cells. And so we help them also to... The grading system also helps them to price them. And that is very beneficial because you don't want to... A, you don't want to sell a faulty battery to someone that... You know, for example, someone that is working on DIY project and receives a very critical and dangerous battery pack. So they have a responsibility in that regard, but also they want to try and remove these battery packs from their yards because it's very critical and very dangerous. So that's our engagement. So we provide them a testing kit that they use to test. And then we do the grading ourselves.

21:10And that grade then is established all these batteries and then our engagement ends when we purchase it. And then, as you rightly said, we don't stop there. We continue the testing process in our facility. That is where we electrically cycle the batteries to get a full picture and a more comprehensive understanding of the degradation and any failure modes that might be present. And then even when the batteries are integrated into our Ally Max, we still do monitoring at that point. So during the operation, we run performance tests throughout the life. And given the nature of ESS, we can do that in operando, so without even stopping and pausing to do a test. So we continuously test all the time as we provide benefits to the customers. Thank you so much, Lorenzo. Thanks, Jose. And maybe just to follow up a bit more, I'm just curious, right? I'm not sure if you can share a bit more about this testing kit you're talking about and then also understanding if you go to the grading, right?

22:15The testing, like just kind of ballpark of time, right? And then you can see how much that takes you because that's a big concern, right? It takes a lot and other people doing ES and others, right? So just curious if you can expand a bit more on this for our technical audience if they're curious. Yeah, of course, I'll try and give as much information as I can. So our testing kit is designed to be a quick test at the supplier's site. So that interrogates the battery management system and we can see how much energy has been discharged. We can see how much energy has been discharged. We can even find out how much the customer of the vehicle has been fast charging his battery. We can also interrogate all the cells and see what their voltages is, if the balancing system is active, all these kind of things that can, you know, once put together properly, we can get us a very, very, very, very, very, very, very, very, very, very, very, very, very, very, interesting picture of the health of the battery.

23:18So we've been working very hard on this part. But also, so this is a quick, quick, quick, quick, quick thing that doesn't take, but there's a lot of work goes into developing this testing methodology. And yeah, and it's key to really, a, streamline our process because we don't want to be committing to batteries that we're going to discard later on down the line. It's an inefficiency and we want to be able to only purchase batteries that we are pretty confident are going to make it through our criteria. But once they reach our headquarters, we do like a slower test. So this is in the ballpark of hours and it goes through charging and discharging of the battery pack and doing tests, like for example, internal resistance measurements, capacity measurements, and open circuit voltage measurements to understand failure modes in the battery. So I think, Simon, you were, you mentioned interestingly, EIS. So that is an interesting approach that you can take. There is advantages to it because you can speed up the testing process in different areas.

24:46But there's, of course, limitations to EIS, to grade the battery pack, purely because it's quite sensitive to certain things. And also there's quite a lot of parallel cells in an EV battery pack. So actually determining where the issues are is tricky. So, yeah, there's different ways. And EIS is certainly an approach that we would be able to take, but that is definitely at our facilities because it requires power and high currents basically. That's cool. Thanks. And maybe just one quick follow up. I'm just curious because maybe other people, right, are curious about, you know, working with more Second Life. And I think we have some other kind of questions. And I think of all this interesting topic, right, how big this can become. So I guess one quick question would be on the tools you're using, right? So could you use like, you know, standard equipment, like, you know, like you buy your hardware, et cetera, or, and then build your own kind of software and protocols, as you mentioned?

26:01Or did you actually have to go into developing hardware itself? Or were you able to take others? And maybe the other quick question would be roughly like, because you mentioned packs, right? So how big are these systems you're testing? Like kilowatt hours, like 40? Are you looking at modules or just to get a bit of a scale be really interesting? Yeah, that's a good question. So we take obviously the battery pack from the EV. So we don't develop inherently our own battery packs in house. So that part of the system is taking an existing product that's out there on the market. In terms of other parts, it's a combination. So some parts of the systems, including, you know, power electronics and sensors and safety systems and mechanical structure and cooling. Some parts we build. And so we've designed and we've we have our own our own designs and we manufacture our own components. But certainly we look on the market and we use existing components that are out there because the battery industry and the energy storage industry is moving very rapidly.

27:16So it is quite important to always keep an eye out there and see what what is available out there because there's some really there's been some great advances in technology, especially from I mean, at least from my side is power electronics efficiency is extremely critical for energy storage. I mean, if you are buying energy at a certain price and selling it back to expecting to make a profit, which is what we do, you want to be able to make sure that the end to end efficiency from converting it to DC from DC to AC and possibly from AC to DC is efficient. So because any percentage loss is basically wasted and wasted energy that cannot be monetized. and the second question I think you asked was how big are our systems? So we're talking EV batteries from initially passenger cars. So they're in the range from 50 to say probably 120 kilowatt hours each. And we use multiple of these. So our Ally Max is a 320 kilowatt hour system.

28:32And yeah, so it's quite high capacity in terms of power output. We range from some from 80 to 180 in terms of power output. So in our low power version, you know, you can you can do the maths and see that actually the C rate, the discharge rate that we discharge our pack at is quite low. Typically, typically in EVs you get to quite high values, especially if you have like a performance car. You can just if you if you were if you're on a track, you can discharge your battery in minutes, which and we we talk about hours. So actually the stress that we put in the cells, even from a safety point of view, is much is much less. So we basically stress them less. Super cool. Now, thanks for sharing that. And I think I now also want to encourage already have some great question from my honor in the chat, but also anybody else if any questions, please put them in the chat so we can address them.

29:37And of course, you're also welcome to come up on stage in case you're able to speak. But otherwise, we can also ask the questions for you. So please keep them coming because we'll go to them shortly. And another question I would like to bring up is you mentioned customers. I did your first customers and not sure what you can share on this. Right. We know the challenges there, but I'm curious if you have any learnings already, right, like kind of working. And if you can maybe share a bit more what kind of customers that I guess is like a usage customer and what they kind of use these batteries for. Any learnings you had, maybe, you know, interesting, you know, perspectives you didn't see before. Yeah. So that's, that's, that's, that's a good question. I think it's at the end of the day, a business exists because of the customers that want your solution. So I always really enjoy working with customers and talking about our, our great customers.

30:29So we've, we've announced our first customer, AeroVolt and AeroVolt is an EV charging network in the UK for electric aircraft. So you might ask yourself, why does an EV charging network need a battery? And the answer is, well, I was talking about earlier, the grid edge and the weak areas of the, of the grid is that when you get to, to these, these, these places, these parts of the, of the distribution network, the power availability is limited. So a lot of people might have had the issue where they wanted to install, install a new charge point for their electric vehicle. But if a lot of new installations come on board, that part of the network becomes constrained. So you, A, cannot install anything anymore or you have to like share the power between installations that are already there. And so in this case, for example, we have issues that to install rapid chargers for, in this case, an electric aircraft, you need to, to discharge a lot of power very quickly.

31:39So you need big, quick, quick connections and typically don't happen. So batteries are quite useful in this because they can be charged slowly. So they can, they can take any good connection that you can provide them and they can have a very high power output. No problem. So this was the first application that we tackled is, well, if we put a battery in a constrained area, we can, we can install EV chargers. We can put equipment. And also, for example, you might have a situation where you only have a single phase supply. So typically single phase supplies are typical of residential areas. Whilst commercial and industrial have three phase connections or higher power, higher voltage connections to the grid. And if you want to install a charger in a single phase connection, you're very limited. You, you can only pretty much install a seven kilowatt charger and that will charge a 70 kilowatt hour car in 10 hours. And if you have, say, for the sake of simplicity, say you have a 70 kilowatt hour plane, you will charge it in 10 hours.

32:44So in these applications, you need rapid charging for certain situations. And we've actually had a lot of interest for best battery energy storage installations for charging networks. So that is, that is a very typical application. But our core applications is installing batteries in factories where for where you have, say, a very phased demand during the night, during the day. So for example, you have might have a manufacturing facility or a supermarket that has a lot of consumption during certain hours. They might have access to different time of use tariffs. So your electricity tariff is a different price at different hours of the day. And that is where, you know, you can already see why a battery is quite useful because, you know, you are paying a very low price in times where you typically don't use your energy and you're paying a high price when you are using a lot of energy. So why don't you just install a storage device that buys the energy and so basically charges up when it costs less and when you're not using it and then keeps it there until the following day or maybe even we're talking about even hours where you need power but you can basically use what you've already charged and you're much decreasing your energy bills.

34:12And at the same time, having a battery there where it's good connected and especially I'm talking into our home market, the United Kingdom, we have a lot of ancillary services that batteries can participate in. And ancillary services are basically you get paid to provide a service to the grid and that is typically to contain the frequency of the grid to a certain value because if it goes too low, then it becomes a big problem and you start tripping a lot of things. And if it goes too high, it's also a big problem. So it's a demand and supply balancing equation. And in the UK, National Grid ESO basically monitors the market and monitors every pretty much power station and connection at any point in the transmission network and asks battery assets or energy storage assets to participate and either charge or discharge to keep the grid balanced. And that is is revenue for whoever operates the battery asset. So we think of our think of our battery as having a day job.

35:24So the day job is is providing arbitrage and savings for its home customer. But it also has a side hustle, which is providing energy, providing flexibility services to the grid and, you know, acting on signals to make money on that as well. So that is that is one of our core customers and core application. And you've asked an interesting thing. What what learnings do we do we get from all this? Well, and something I urge you know, all everyone to think about is installations on the grid are something that are have been a bottleneck for a lot of large battery installations like grid scaling installations, but also for behind the meter. And we've seen it's much easier to get connected. But also, you know, this has been a big learning for us to understand, you know, what requirements do you have? I mean, we are system meets the requirements, but then, you know, you have a lot of bureaucracy and stuff to go through. And the systems actually in place to do this are quite you know, not prepared for the amount of applications and installations are required.

36:36So basically that has been a big learning for us, you know, navigating this installation landscape has been has been interesting. And it's definitely a challenge that all energy storage operators are facing at the moment. Lorenzo, what about what about costs? So the economics of using allies energy storage solutions versus say, a new energy storage system or another type of company that is also repurposing batteries. Is there a comparison of economics? Is there a value proposition there where it comes to economics of acquiring the energy storage system? Yeah. So actually, repurposing batteries is very favorable from an economic point of view of building these systems. Our business model is energy as a service. So you can we basically provide the service to the customer and they pay a subscription. So we are financing these assets and we hold them. So it becomes extremely important to keep the costs down because otherwise you're facing with a lot of capex to have to deal with, which means that our repurposing efforts are actually making our energy storage systems two to two and a half times cheaper than competitors.

38:04That is purely because you know, the price at which we buy these batteries is competitive. And yeah, I mean, and also the way we design the system, it's not only the battery, the battery raw material cost. we've designed it to be a very flexible module system designed like in the automotive way. So we've pretty much taken the philosophy of design of the Ally Max following automotive principles. So being very lean in production and also making sure that, you know, everything is as simple as it can possibly be and leveraging economies of scale as we grow, we'll actually lower our cost even further. And yeah, so like it's extremely important. But it's not only the cost that makes us different to competitors that you might want to buy a new battery energy storage system. We've made it mobile. So in the sense our system can be transported under three and a half tons via trailer, which opens up our system to the market of off grid.

39:11So replacing and phasing off dirty diesel generators. So it's not only a battery energy storage that can sit stationary. It's also been designed to be mobile. So to serve events, remote construction sites, anything that basically uses a diesel generators these days. And lastly, repurposing batteries actually saves a lot of waste and saves CO2 emissions because you're building something with with batteries that have already been carbon accounted for in and basically you are foregoing the process which is actually CO2 generating which is recycling. So we aim to save 17 megatons of CO2 by 2030 and 173,000 tons of waste by 2030 with our production volumes of the Alimax system. So, so yeah, it's cost for sure and it's something that we sell hard on but it's also a lot of benefits from the CO2 point of view as well. Thank you so much, Lorenzo. I do have two quick questions and I see that the audience is also placing some questions in the chat. The first question that just came to mind when you talked about the energy as a service model which is insurance.

40:32I know a lot of big insurance companies are, you know, they have programs to try to provide insurance to decarbonization solutions now, battery being one of them. Do you see any challenges when it comes to you know, needing to insure the battery asset in the field when it comes to pricing the asset or something of the sort? Yeah, so thanks, Marianne, for the question. I think it's definitely a new asset class for insurance companies. So it's something that they might not be as used to as insurance ensuring other events. And so we've been speaking to a lot of insurance companies and we see that actually they're opening up their arms a lot to batteries and especially because you know, it all depends on the application. it all depends on what you're using it for. But, you know, it all comes down to how safe you operate your system from a repurposing point of view and that's where a lot of our efforts are spent but also how you operate it.

41:48So basically, insurance is actually a good thing for us because we use automotive packs. So automotive packs, we've proven through the data we've been generating with our early systems that we get very, very few failure rates in terms of downtime and anything. so it's actually like a very well designed product, the battery pack for an electric vehicle. And it's actually the technology that is employed in EV batteries is actually far ahead of the energy storage market. So pretty much every new battery technology, battery chemistry, way of manufacturing cells is firstly targeted to the automotive industry and then successively ends up in energy storage. So, yeah, so that also means that going into the future, we'll always have access to the most highest performing and best technology out there, which is good for insurance companies because that's what they ultimately assess the risk of your system. So going into the future with the sodium-ion batteries and new new chemistries is we're embracing it. We can't wait for that to happen to integrate these systems into our ESS.

43:13Thank you so much, Lorenzo. And actually, this is something that I was not fully aware of, which is shipping of batteries can already be tricky. What about the logistics of shipping, you know, the repurposed batteries? Could you shed a little bit more light on if there are any challenges related to that? And if so, what your strategy is to approach it? Yes. So our core our core idea is we would we would like to manufacture as locally as possible. So at the moment, we're serving the UK market and, you know, in the future, we're looking to expand to new markets. And, you know, that for us is important to source battery packs there and establish a supply chain and a manufacturing center in the region that we intend to sell our ESS solution. And logistics is definitely something that has been, I mean, at least a challenge in the early days, for sure, that the question is, how do you transport a battery? Well, as soon as you basically increase your weight to very limited amounts, you know, you get into the territory of you need to be, you need to have like basically to comply with ADR, so dangerous goods transportations.

44:33But the good thing is that actually it's all about A, proving that the battery is functional and that it's been monitored and it can be kept safe. And that is exactly what we do when we work with our suppliers with a testing service that we provide to them. We establish that the batteries are safe even before they get transported. And then that becomes a question about packaging it correctly and making sure that we transport as many batteries as we can at a time because to keep basically the logistics costs down and serve our manufacturing volumes. I mean, we don't intend to be stocking a lot more batteries than we intend to be using for our production. And, you know, it's been, we're working with partners that have been working and shipping with batteries for many years. So actually, transporting by land is quite, not so straightforward, but it's possible and it's when we've been doing it. Brilliant. Thanks so much, Lorenzo, for sharing that. And yeah, now we want to go to audience questions.

45:40There's quite a few. So maybe, and I will read them out now because, yeah, if you can join us on stage, Maiano, for example, and Jack, you're really welcome to. I think I will start with them for now. So there's one question from Maiano. Do you have an agreement with an OEM to be able to navigate with the communications protocols by using only the packs? Do you think it can reduce the scalability of the business by difficulty of logistics? Where you spoke about this with the packs and the security. Up to what percentage of the battery capacity are the used of the best packs? Okay. So I'll start off with the first question. So I suppose you're asking, how do we collaborate with OEMs to use batteries that have been developed by them? And I've explained earlier that we've been we've been working with supplying our battery packs from UV recyclers. But our second avenue is exactly that. So working directly with manufacturers of batteries that produce them and you know, you need to do something with them.

46:48So I'll give you a few examples. A few examples are Second Life. You know, what happens with OEM batteries Second Life? Well, it's tricky for an OEM to keep control of the battery once it enters vehicles. I mean, a lot have, a lot try and they succeed in a certain way to, you know, recouping the battery asset at the end of its life. But actually, it's quite tricky. And also some of them, you know, don't even don't really want to do that anyway. So actually having a partner, which is separate company that does that for them is extremely valuable. And then the second thing is, well, there's a lot of non-Second Life batteries from test fleets, from pre-production vehicles that, you know, they, at the moment, they're not being used for anything. And we've been in conversations with several OEMs to use these in our MAX systems. So yeah, it's collaborating with OEMs is something that we are doing. And, you know, with the advent of battery passport regulations coming in the European Union and the need that's produced responsibility to deal with the battery packs beyond, you know, the first application means that actually OEMs really want to collaborate with companies like us to provide a solution to this because recycling ultimately is not the best solution in all cases.

48:19I mean, it ends up being the ultimate solution, but you want to delay that as much as possible to keep basically the value and extract more value from batteries. The second question, I think logistics, I think we kind of covered earlier, but I'm happy to answer to provide more detail if you need. And then the third question, which actually, Simon reminded me, helped me out here. Percentage of the best you can actually use. So I guess, yeah, I mean, maybe from the cell, right? Like from what's like the window you can actually operate in, right? Can you use it to the max or you? Yeah, so we have complete configurability of the range. So it depends actually, it depends on what state of health we are, depends on what batteries we're using, it depends what application the system is in. So I kind of described different applications, UV charging in a factory, replacing a diesel generator, other applications. So it depends how hard you need to run it and how much energy you need to extract at given times.

49:34But in certain applications, you can work in a very narrow window and you might ask yourself why would you work in a narrow window? Well, it increases cycle life, increases the life of that battery in the future. So for example, if you have a very system that doesn't need to work that hard, well then in that case, it makes a lot of sense to keep it in the central region of the state of charge curve. So to reduce the degradation. Also from a thermal management point of view, to try and keep it as at temperatures, low temperatures to reduce the degradation reactions. So yeah, sorry, I'm sorry I can't give you like a more concrete, specific answer, but the right answer is pretty much depends on the application and yes, we can access pretty much all of it. It depends on us and how much we want to push it. Because at the end of the day, we are responsible for the degradation. We get affected if the battery degrades.

50:37So it's in our best interest to reduce that as much as possible. That makes a lot of sense. Now maybe the next question, do you want to maybe go to the end, I think? Because I think that's a bit more open ended. You did mention the battery passport, Lorenzo. So Mariano has a question here. Can the launch of the battery passport eliminate barriers to competition? So the launch of the battery passport, well, it depends how it's going to go. For sure. We do expect more competition in this market. Absolutely. It's it's it's it's it will happen inevitably. But also we see a lot more EVs on roads. So we actually our access to supply becomes way larger and also more second life batteries are coming to market. So we have more options. So instead of choosing the high 90% of state of health and remaining capacity batteries, we can we can go and and use batteries that are maybe a bit more degraded and see how far we can push them.

51:48But but yeah, I mean, the battery passport actually enables us to work with OEMs. So it's and we'll we'll be will have been in the market for quite a few years. We hope we can be a trustworthy and reliable partner to OEMs going into the future. And and yeah, I mean, it all comes down to how effectively your testing is and how and how well you can operate these systems. And great. And I think there's also a question on like if you have any thoughts on right, like after what time would it be like, you know, maybe like the first life should end right over of a battery. I mean, there's of course people talk often about the 80% number, but is this a number you think makes sense or do you actually think it could be lower? I mean, I guess for you, the better the battery is, the better do you get right? It better. But at the same time, maybe what do you think makes sense or the other metrics, which are actually much more important than let's say capacity retention?

52:46Yeah. So I think capacity is only one side of the coin and one part of the whole picture. Yes, 80% has been kind of, you know, widely adopted as the number for second life. And that is because, you know, I think it's, it's done also down to risk aversion because we've, you see a lot more degradation and a lot more dangerous reactions happening inside a battery when it reaches lower capacities. And actually getting to 80% is quite, it's quite hard, especially if you have an LFP, LFP battery. It's, it takes a long time. So we've done a lot of analysis on EVs that are on the road at the moment. And the company that has the most, well, one of the companies has the most EVs out there and shares data publicly is Tesla. Tesla does annual reports where it shares degradation of their batteries in the field. And, you know, it's been, well, probably 15 years actually since the first Model S was on the road.

53:50So it's in 15 years of degradation data. Actually, we see that a lot of, of cars still have extremely high capacities after even after 15 years. and they're still perfectly fine. I mean, for an EV, it does make sense 80% because it's only capacity loss. When you are 80% capacity, you see a lot of internal resistance rise and internal resistance, it effectively means you have less power because you hit your low voltage limits way quicker. And so you can't drive as fast, you can't accelerate as fast and you can't fast charge as quickly, which, which is detrimental in EVs because your performance of your car is worse. So it's typical when you have, for example, a phone and you, and it switches off at like ridiculous percentages and starts not operating very well. That is typically what happens. So, so yeah, I think 80% for EVs could make sense, but for ESS and applications where actually power is not concerned, you can go much lower.

55:00You can actually push the batteries to, to, to harder limits. Thank you, Lorenzo. We have a question here from Jack and I'm also very curious about this question, this question, which is what excites you the most in the future about this, this space? Thanks, Jack. That's, that's, that's a good question. So I think what excites me about the most is that we have the opportunity to be redefining an industry. Well, actually we're, we're, we're part of something that actually makes a huge difference in what we hope to make a huge difference to the world as, as, as we deliver more energy storage, but we're also working at the cutting edge of technology. So we're working with extremely well-designed, battery systems from the best car manufacturers in the world, which are pushing the boundaries of energy density, of thermal management, of, and enabling all sorts of, of new applications that were not possible in a few years ago without, with the state of quo, status quo of technology.

56:08And that is, for example, electric aviation. I mean, we, I was extremely, you know, happy to see that, you know, batteries are now being used in, in, in e-vitos and electric aircraft, which is something that, you know, maybe 15 years ago was, was not even possible. So we have the chance to work with the best technology, always, always looking out for new, novel battery technologies that we can incorporate, always following the trends of, of, of automotive manufacturers. And also from the energy point of view, I think that's what excites me the most is, well, we have the chance to actually redefine the way energy is managed in, in a grid in, in, in, in countries. So actually playing a role in, in changing the way we, we, we, balance grids, how we use energy, how we, we, we, we, we price electricity. So actually batteries unlock all of that, change the dynamics of the industry, increase competition in certain areas. And, and actually in, in my view, improve the efficiency of everything.

57:22And efficiency means lower costs and lower costs means actually we can, we can be more productive and, and, and grow countries and technology much faster. Excellent. And maybe on a, on a personal note, right, like kind of who do you think, um, you know, like maybe some of your learnings being in the industry now for some time, right? And it seemed to environments and maybe anything you want to pass on for anybody who's curious for the industry, because on the one hand, we have love. I know a lot of listeners here who are, you know, leaders in the field, like CEOs and running companies or within companies, but also there's quite a few people who are new to industry or curious, maybe to enter the industry. So is there anything you would like to pass on to them? Yes. I mean, for me, it's still a very new industry. So, um, there's very few people to have, to have, you know, decades of experience in it.

58:12And, and, you know, um, and actually the, the status of technology changes so quickly that actually it shouldn't be a barrier, you know, below. I haven't, I don't know anything about battery technology, um, and, and hinder you from actually pursuing opportunities in this field. I think you should. Um, and the best ways is to, to follow, um, to follow the trends and see where technology is taking us. And there's more and more startups that are playing in this game. So, um, encouraged to, to work with small companies are trying to make a difference. Um, and, um, and also, um, big companies are actually trying to change the way they work and incorporate battery technology in, in, in a new way. Um, also, um, you know, getting involved with, with, with basically, uh, pioneers is, I think it's the best way really. Um, and, you know, um, following this podcast, I am sure you, you can, you can find a lot of, um, new technologies and new things that are out there and, and how the industry is changing.

59:09So thanks. Thanks Simon for bringing this forward. Thanks so much, Ren. So yeah, no, really, really appreciate you joining us today. I think with this, we're going to wrap it up. I want to thank also everyone who listened today. Um, and shared your question as well. It's really appreciated either here live on Clubhouse, or also then later on, on Spotify, Apple podcasts, Amazon music, or wherever you listen to your podcasts. If you're curious and you maybe just joined now and you want to hear the full episode, you can also find it again on all of these platforms. And you can also go on batteryinsiders.com to put your email in there, and then you get notified about the future session. I already know what's going to happen. It's an exciting other session we have planned for another battery technology, which I think maybe a lot of people haven't thought about. So hopefully you join us for that episode as well. And again, also a massive thanks to Mariam for co-hosting as well as Lorenzo for joining us today and share all of his insights.

59:58Thanks everyone. Thanks everyone. And thank you so much, Lorenzo. Very interesting session. Take care, everyone.