As demand for power skyrockets amid the rise of AI, one in every of Tesla‘s co-founders is betting on a brand new resolution: giving old electrical car batteries a second-life.
JB Straubel, who helped launch Tesla and served as its tech chief till 2019, founded Redwood Materials in 2017 to recycle batteries and construct a closed-loop provide chain for EVs. But as Redwood began receiving extra EV batteries, the startup observed that almost all nonetheless had usable capability. Rather than recycle these batteries, Redwood is now repurposing them for microgrid tasks that might present low-cost power storage for new and current data centers.
“We’re just finding a way to basically wring a little bit more value out of those batteries,” Straubel advised CNBC.
For its first microgrid, Redwood partnered with Crusoe, finest recognized for the huge AI data middle it’s constructing in Abilene, Texas, as a part of Stargate, a $500 billion AI infrastructure undertaking backed by OpenAI, Oracle, SoftBank and others. Redwood says its system is the biggest of its variety in North America. It generates 12 megawatts of energy by way of a photo voltaic array, and has 63 megawatt-hours of capability utilizing the repurposed EV batteries.
“In the energy industry, the holy grail has been 24/7 renewable power, but forever the cost of batteries was too high, until today,” says Cully Cavness, Crusoe co-founder, COO and president.
The world data middle market is experiencing a surge in development as a result of AI growth. According to Goldman Sachs, AI is estimated to drive a 165% increase in data middle energy demand by 2030. Redwood and Crusoe mentioned they see data centers as a key beneficiary of the know-how, serving to hyperscalers deploy with pace and energy redundancy, at an inexpensive price.
“This is cost effective, rapidly deployable, scalable 24/7 renewable power and AI data center computing as one integrated package,” Cavness mentioned.
Redwood says it has over a gigawatt-hour of reusable batteries in its stock, the equal of 12,500 EVs, and it is designing 100 plus megawatt tasks, as much as 10 occasions the scale of the pilot microgrid with Crusoe.
“The scalability of this really doesn’t have a limit,” Straubel advised CNBC. “We can use the same type of architecture and scale this up by a factor of 100 or more. We’re already working on engineering projects that are in that type of magnitude.”
In addition to its recycling enterprise, Redwood will now be competing in a rising power storage market with established gamers like Tesla, which has constructed a successful power enterprise with its Megapack grid-scale storage. But consultants say there may be loads of room for new entrants to fulfill demand.
“The future demand for energy storage specifically is massive, so it’s not surprising that players who traditionally haven’t been in this space are looking to enter,” mentioned Pete Tillotson, senior analysis analyst with Benchmark Mineral Intelligence. “I would imagine this second-life piece is going to be used for more focused, slightly smaller projects. Potentially with clients where cost is a little bit more of a limiter.”
Watch the video to see how Redwood Materials has grown its recycling operations and be taught extra about its plans to make use of second-life batteries to fulfill the surging power wants of the AI period.