CPS Energy will sign an initial agreement with OCI Solar Power and the Hyundai Motor Group on Tuesday to test whether recycled electric vehicle batteries can be successfully reused to store power “in an electric utility setting,” according to a CPS Energy press release issued Monday.

Representatives from the utility and the two companies will meet at San Antonio-based OCI Solar Power headquarters at 10 a.m. Tuesday to sign a memorandum of understanding. While not legally binding, a memorandum of understanding signals a willingness among the parties to work toward a formal agreement. The event will be closed to the public due to COVID-19 precautions but will be livestreamed on OCI Solar Power’s Facebook page.

According to the release, lithium-ion batteries used in electric vehicles typically operate at peak performance for seven to 10 years but are usually not efficient for automotive use after that time period. However, the same battery might have enough capacity to be used as a power-storage unit in an electric utility setting for another five years, which the three partners plan to test.

The partnership was facilitated by OCI Solar Power, which has been a supplier of solar power for CPS Energy since shortly after the business moved its headquarters to San Antonio in 2012, said Jonathan Tijerina, CPS Energy’s senior director of business and economic development.

Tijerina told the San Antonio Report on Monday that the trio is planning to create an energy storage facility that will store a half-megawatt of power — enough energy to power about 100 homes on a hot Texas day. CPS Energy would operate the facility, Hyundai would provide the technology and tech components, and OCI Solar Power would manage the software connection components, Tijerina said.

“We’re calling this a limited deployment project, which [will allow us] to figure out how it performs for the utility, as well as in market conditions on the open market,” Tijerina said. “We’re very excited about it.”

The project would expand CPS Energy’s existing energy storage technologies and capacity, with the possibility of further expansion in the future, Tijerina said. He added that successful testing would lead to an environmentally friendly way to extend the shelf life of electric vehicle batteries.

CPS Energy has a fully operational lithium-ion battery storage facility that can hold about 10 megawatts of power. The facility, near the Southwest Research Institute, came from a $3 million New Technology Implementation Grant from the Texas Commission on Environmental Quality in 2016 and was completed in June 2020, according to the utility’s financial disclosures.

Discussions about the partners creating a facility for recycled batteries have been in the works “for a while now,” Tijerina said, but were pushed back due to the coronavirus pandemic. With no formal agreement in place yet, the cost, timing, location, and operation of the storage facility are still being worked out, he said.

Tijerina said he expects the initial testing period to take about three to five years.

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Lindsey Carnett

Lindsey Carnett covers the environment, science and utilities for the San Antonio Report.