Tag Archives: Waste product aftermarket

Will EV Batteries achieve economies of scale?

So says the Department of Energy. (PDF Warning) This graph shows it all:

After reading the report, it seems the trajectory of this forecast was demand driven.  I have no doubt that economies of scale and innovation manufacturing processes can help bring the cost down but I am skeptical of the cost of lithium inputs.  It is not that abundant as oil, as there is only two regions I can think of (China and Bolivia) that have substantial sums of it.  But this does bode well for Intercon’s idea for reusing batteries for alternative power sources, as this will push prices downward for aftermarket batteries.  See, I said that economies of scale was possible! (or at least the DoE confirms it…)

HT: Engadget

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Waste products after-market: EV’s Lithium Ion Batteries

Intercon wrote an interesting article today highlighting a solution for the high cost of electric vehicles: by transitioning drained lithium ion batteries from used EVs to function as stores of energy for alternative power sources such as wind and solar.   As Intercon notes, the high cost of manufacturing lithium for EVs can be subsidized by the aftermarket sale to energy producers:

Estimates in vehicles prices have seen these costs naturally passed onto customers to make EVs just as expensive—if not more expensive—than comparable gas vehicles or hybrids. But an afterlife for batteries that paid dividends could put a dent in those high costs for producers and consumers alike. Apparently, when batteries degrade from levels necessary for driving they still hold large amounts of charging capacity (perhaps as high as 75%)—a commodity that could be captured by another industry. Realizing an after-market value of batteries could shift some of that excess cost away from customers into other willing buyers at wind or solar farms. According to GM, the situation is a triple-win because although deconstructing the batteries to safely harvest their components is possible, it is expected to be intensive in both labor and capital.

Intercon believes that the greatest benefit alternative energy producers stand to gain is to provide a store of energy for a more reliable source of energy.

At the same time, renewable power has its own drawback, namely its intermittent nature. Wind turbines and solar farms can provide power that is clean but often unreliable. The result is needing large amounts of dirtier power kept in the grid spinning reserve (plants that are running but not producing electrons for the grid) meaning that the net benefit of the greener installations is marginal. When paired with power storage, however, renewable energy advances quickly against into the marketplace. Power storage systems made up of recycled EV batteries could help the output of renewable systems remain more consistent allowing for more grid systems to be powered down. The UK Times reports that 25 recycled car batteries could store up to 1 MW of power and yet may be an incremental additional cost added to a wind turbine.

While novel in it’s pursuit, I see some issues with the idea for this as a magic bullet for alternative energy. If lithium ion batteries can retain their value past being used in an EV, wouldn’t the value be more useful in consumer electronics? Spreading the bulk of the car battery across more sell-able units  would bring economies of scale, decrease cost per unit and increase margins. Given the high value of lithium, any discount on used lithium would nonetheless still make it expensive, making it a boon for already struggling clean energy providers to compete with cheap, dirty power. It would only make economic sense to push an after-market of used lithium towards consumer electronics rather than utilize them in alternative power schemes.

This is a consequence of the power industry’s structure, not exactly a failed idea.  This would be a great way to utilize post-consumer material for efficient means (if it is possible) in order to help cushion the cost of utilizing lithium ion batteries as a store for power.  Of course alternative energy providers would want whatever is available now, but can’t due to cost.  A lot will depend on the shape of the power industry in the future, which is currently unknown at the moment, but positive given the newly awaited American Power Act.  This shouldn’t detract from the fact that lithium in EVs is  still recoverable for after-market uses, (either for renewable power or consumer electronics) which should help cushion consumers from high lithium prices, making the shift to EVs more attractive.  Not everyone will be able to get a Tesla, (Pictured above) but Nissan’s new Leaf is a start.

The next growth area for the economy

The optimism is rushing in as the new cadre for the future of the American economy, most of which was given a lift thanks to the new employment numbers for March.  While many report on the green shoots that help point to the one, rosy conclusion there still remains the question of where our growth will come from. From Slate, an article on “Why the U.S. recovery will be bigger, faster, and stronger than economists and politicians expect” gives a clue as to what the next new growth area for the economy will be: infrastructural efficiency.

In the short term, the ruthless pursuit of efficiency translates into the uncomfortable—and unsustainable—dichotomy of rising profits and falling employment. But the focus on efficiency is creating new business opportunities for smart companies. At BigBelly Solar, a Needham, Mass.-based firm whose solar-powered trash compactors reduce the need for both labor and energy, sales doubled in both 2008 and 2009. “Cities and institutions like universities and park systems are eager to do more with less,” says CEO Jim Poss. Leasing 500 compacting units has allowed Philadelphia to cut weekly pickups from 17 to five and will save it $13 million over 10 years. BigBelly employs fewer than 50 people, but like many businesses in fast-growing markets it indirectly supports a much larger number of jobs. At Mack Molding, an Arlington, Vt., contract manufacturer, 35 workers are kept busy on two shifts producing compactors. “When you add the employees at the more than 50 component suppliers, this work is supporting another 180 jobs,” says Joan Magrath, vice president of sales and engineering at Mack Molding. BigBelly compactors, which are entirely made in the United States, have been exported to 25 countries. It’s a drop in the bucket. But thousands of start-ups and small businesses are trying to crack the markets developing at home and abroad.

The value added is obvious. More waste can be processed at a lesser cost.  In the case of Philadelphia, the $13 million dollar savings can now be allocated to provide more value regarding something else, providing more momentum for growth in either the public or private sector.  While traditional waste handlers may be out of a job, the article notes that much higher skilled, production jobs are created in order to produce the automated receptacles.

The short-coming of this article is that it doesn’t delve any deeper into the potential that efficiency systems like this can create for the economy.  This blog has detailed some incredible ideas at maximizing efficiency, either by finding value in waste or building economies of scale.  The author misses how important infrastructural efficiency will be for the economy, especially since a lot of this efficiency will result in energy savings, usually not propelled by cost, but towards providing a greener future.  The more value we can squeeze per unit of (insert labor or widget here), the higher productivity the U.S. will enjoy which will entail higher income per individual.

Recycle your cell-phone, its worth a fortune!

Here is why you shouldn’t just throw away your cell-phone, but recycle it! Some say to do it for the environment’s benefit. Save energy this, prevent waste that. But I think a true ecopreneur would look at this statement

For every 1 million cell phones recycled, 75 pounds of gold, 772 pounds of silver, 33 pounds of palladium and 35,274 pounds of copper are recovered.

That’s 75 pounds of Gold X 16 ounces X $1133.600 per ounce which = $1.35 million. 772 pounds of silver x 16 ounces x $18.1 per ounce = $223,571.  33 pounds of palladium x 16 ounces x $501 per ounce = $264,528.  35,274 pounds of copper per ounce x $3.5748 per ounce = $126.10

Total = $1.8 million dollars for every 1 million cell phones.

Yeah, OK, that only amounts to $1.80 per cell phone but imagine bringing economies to scale and legally require citizens to dispose of e-waste to specific collection centers and wallah! A viable business opportunity.  Don’t agree? Multiply $1.8 x 276.6 million cell phones in the U.S.  That’s around $500 million dollars in recycling revenue, and that is only from cell-phones! Imagine what other e-waste would yield…

PS:  $1.8 * 4.1 billion cell phones in the world = $7.4 billion. Yeah, that’s right. $7.4 billion dollars. For cell-phone e-waste alone. Is any CEO right now reading this?

Oh yeah, we get to save the environment too. Forgot to mention that.

Upcycling: Another name for the waste product aftermarket?

I stumbled upon this well put together blog, Intercon, and came upon this post entitled Recycling vs. Upcycling: What is the difference? In the post, the author defines upcycling as:

process that can be repeated in perpetuity of returning materials back to a pliable, usable form without degradation to their latent value—moving resources back up the supply chain.

Sounds a little bit like a term I coined called the “waste product aftermarket.”  The waste product aftermarket is an idea that I have a few kinks to work out, – I haven’t been able to muster up any formal definition for it – (watch out grad school) but I find many similarities with this author’s proposition for the concept.  My aim here is to flesh out the differences between the two.

Both are similar in that they define a concept often used in sustainability – about closing the link between the industrial supply chain’s input beginning to its waste end.  In ecological economics terms, this is a function of industrial ecology where resource inputs that will have value added to them also have waste outputs all along the product lifecycle.  Traditional industrial production models are linear based and describe the waste outputs (which add no value to the supply chain) as externalities.  However, in an industrial ecological production model, instead of waste being an externality, it is a valuable resource that, with value added such as recycling, could then become a resource input to begin another product life cycle again.  This idea assumes sustainability because the production cycle becomes a closed loop system where new resources entering the system are not used and then wasted, they are simply reused over and over.  The benefit of this? Less environmental damage from the front end and the back end.

But lets get back the difference between the definitions.  The waste product aftermarket is the actual market where suppliers (those who generate the waste whether its industry or consumers) meet with buyers. (those who add value to the waste, like recyclers)  The buyers then sell their newly reused product and either contract out their products (or put on a commodities market) as inputs for beginning the new product cycle.  Like any market, profit maximization is the key guide here.  While this isn’t a concrete definition, (this is just a blog after all) I hope this makes my ideas a little clearer.

What upcycling to me is the process of waste reaching an intermediary in the waste product aftermarket which can then be created into a usable form.   For now on, I will continue to use this definition to explain this particular process.  To understand more about the waste product aftermarket, you will just have to read my blog more!

Waste products aftermarket: partIII – e-waste in the developing world

The UN  released  a report today detailing the dangers of e-waste in the developing world. (here) This issue isn’t new, but it is good that the UN is starting to realize how important it is to start dealing with this.   Not many of us know where our digital trash goes, but it mostly goes to the developing world.  The issue with this is that because of the valuable components within the waste, many of the poorest have taken the initiative, at the risk of their health, to disassemble the waste in order to obtain these valuable components and sell them.  Some grim details include:

Most of the recycling of electronic waste in developing countries such as China and India is done by inefficient and unregulated backyard operators. The environmentally harmful practice of heating electronic circuit boards over coal-fired grills to leach out gold is widespread in both countries.

The laborious task of doing this is often menial, tedious and most importantly, hazardous to one’s health, making it incredibly dangerous. But when weighing the option between eating and not, some will step up to take the risk and rummage through our e-waste for a few valuable components.

This issue was first brought to light after watching this incredible documentary called Manufacturing Landscapes. It has vivid images of the lifestyle that some Chinese have in taking part to profit from this, and it will either leave you shocked, fascinated or just downright disgusted.

A more deeper  look into the e-waste problem was documented by PBS’s Frontline.  The piece was entitled “Your Digital Trash.” It looks at some of the broad ramifications of e-waste that isn’t entirely environmental.  The most interesting part of this program was towards the end.  It dealt with an enterprising  social entrepreneur from India who built a business by investing in capital machinery that made the separation of parts for e-waste much more productive and less-hazardous to workers.  He hired workers at competitive wages to disassemble and collect the valuable materials from e-waste, all while ensuring a safe work environment.  Those valuable materials, most notably gold, would be then melted down in jewelery and sold on the street for a profit.  Right now the business is only small-scale, but there is potential, especially if India fashions a new law to ban digital dumps.

Before leading into the last segment of the program, the report focuses on a dealer who fills up empty container ships on the way back from the United States after delivering imports, and because the e-waste is loaded at little to no cost, sells them to digital dumps where they are taken apart irresponsibly. His quote certainly resonates when asked about environmental damage:

“I can only say one thing, if you want to do it environmentally, you have to pay. They have to invest in machinery, labor, everything. It isn’t worth it to pay so much money.”

I point this out because this is the real crux of the issue. Our e-waste is being sent to the developing world because residents who have a low-marginal product of labor are willing to take the risk and low pay in order to get the very small amount of value out of this waste. It shows how necessary legislation is needed in order to circumvent this, and jump start the proper investment where our Indian entrepreneur doesn’t need to fashion the valuable metals into jewelery, but is able to sell recycled waste on an open market. If it is possible to do this at Total Reclaim in Oregon, where labor costs are high and able to be sustainable through government support, imagine the type of value the developing world could get by investing in an industry dealing with e-waste responsibly. It will take some time before commodity prices will get to the point when it is profitable to invest in this type of business, but for now, legal intervention is the best way to jump start this industry so that it can innovate and build economies of scale and become a fixture of the industrial ecological web.

Recession shows how recycling shouldn’t be run

This post stood out to me on FreeMarketMojo, linking to an article in the San Fransisco Chronicle about a $4 million dollar budget hole (40% of the total budget deficit)  that the city of Berkeley must endure thanks to their poorly run recycling program.  A combination of misplaced incentives and recessionary forces helped lower the amount of actual waste that consumers could be charged.   Commodities are usually what help recycling programs keep afloat.

The economics of recycling has always been subsidized by commodities’ resale values. But those also collapsed over the past year. Paper went from being worth $187 a ton in July 2008 to $46 a ton in January 2009 and $116 a ton in December 2009. Aluminum went from $1,908 a ton to $679 to $1,200, Clough said.

I want to point this out because it shows how important commodity prices are to the viability of recycling enterprises. While commodity prices during this recession had been depressed significantly enough to deflate their budget cushion, spreading the risk of volatile prices, especially for more valuable commodities, could help reduce budget woes.

Because Berkeley provides its own service, it lacks funds to buy many technologies required to recycle even more products, like certain plastics or concrete.

Surely Berkley will want to look into increasing the rate of waste that is taken to their recycling centers in order to increase the amount that could be processed and sold. Providing proper incentives will help, unlike what Berkley is currently doing. But finding money to invest in other product offerings, like recycling plastic or concrete, or even e-waste, can hedge against depressed prices and provide economies of scale, especially if services were expanded state wide.

I just want to make these comments as they help point out how important a large scale operation is, and how sustainably high commodity prices can help make recycling programs economically viable.