Embedded emissions

Overview

To install and operate a neighbourhood battery, the battery must first be manufactured and transported to the location. In doing so, the neighbourhood battery will require input of different resources and energy. These production and transport processes have an additional associated environmental impact that will add to the battery’s overall impact on GHG emissions. The term embedded emissions is often used to refer to these additional emissions. It is because of embedded emissions that even if a battery was 100% efficient and only charged on renewables, it is still not emissions free. Taking embedded emissions into account can allow therefore for one to ensure that, across its lifetime, the battery has a net negative impact on emissions. Embedded emissions also provides some insight on reasons for why, emissions intensity speaking, a neighbourhood battery may not always be the best option.

There are several stages that contribute to the embedded emissions of a neighbourhood battery. These include:

• resource extraction
• material parts and production
• battery manufacturing
• transport of battery to location where it will be used, and
• battery end of life.

Estimating the embedded emissions of a battery can be difficult, as it requires analysis of the emissions intensity of these several different stages.

A study by IVL estimates the embedded emissions associated with manufacture and energy inputs for a standard Lithium manganese cobalt oxide battery to be between 61-106 kgCO₂e/kWh battery capacity. Cross-referenced, this also aligns with the European Commission’s standardised Product Environmental Footprint for the same battery chemistry that rates the EE at 77kgCO₂e/kWh battery capacity. The emissions intensity of the battery is part of the overall resource costs associated with it.

Resource costs and trade-offs

Currently 100% of Australia’s lithium-ion batteries are imported from overseas. While there is opportunity for Australia to build its own market to cover the whole value chain for lithium-ion batteries, the use of neighbourhood batteries as it stands requires overseas technologies.

Clean energy technologies like battery energy storage require a range of raw materials, including critical minerals and rare earth elements (REEs) to be produced. Over the last decade, advancements in technology and economies of scale have pushed down overall costs of lithium-ion batteries by up over 90%. Of these remaining battery costs though, the percentage contributed to by raw materials now takes majority, with raw materials accounting for around 50-70% of total battery costs according to the International Energy Agency (IEA). For battery storage, these raw materials include considerably high levels of copper, cobalt, nickel, lithium, REEs, and aluminium. All of these minerals are non-renewable resources, and therefore there is only a finite amount of them available. There are also broader considerations that should be noted when considering the resource costs of batteries, including environmental and social impact of mining these minerals. For example, majority of cobalt comes from the Democratic Republic of Congo (DRC), while majority of lithium production comes from Australia, Chile, and Argentina.

This is why the cost of batteries is highly dependent on the cost of the minerals needed in its production. If the cost of lithium or nickel, for example, was to double, the cost of a battery could increase by 6%.

Due to the resource costs associated with neighbourhood batteries, it is important that considerations for more capacity-effective implementation of battery storage is considered. What this means is, ensuring the battery is needed, what capacity size is needed, and considering other alternative options that could be put in place alongside the battery to reduce its required capacity (e.g. demand management, load shifting, and more efficient energy use).

End-of-life

Considerations for the end-of-life for a neighbourhood battery, including options for reuse, recycling, and disposal, have been provided here.

Typically, neighbourhood batteries will have a lifetime of around 10 to 20 years. How quickly a battery reaches its end of life will depend on several factors:

• the battery chemistry,
• the depth of the battery’s discharge – for common batteries discharging no deeper than 10% of the battery’s storage capacity is recommended,
• frequency of how often it is ramped up to meet sudden surges in demand,
• maintenance of the battery,
• climate conditions of where the battery is installed.

As such, most batteries are operated to limit their daily cycle of charging and discharging to (on aggregate) only one full cycle.

Data

Data you will need to estimate embedded emissions of the battery includes:

• Percentage of batteries that are being recycled,
• Embedded emissions associated with the project hardware, including the battery, other hardware required (e.g. switchgear, inverters, transformers and meter) and any grid upgrades required.