Second-life lithium-ion batteries for microgrids: A comprehensive review of integration, degradation, control, and reliability

The rapid electrification of transportation has significantly increased the demand for efficient battery-based energy storage systems. Lithium-ion batteries (LiBs), widely adopted in electric vehicles (EVs), are typically retired when their State of Health (SoH) declines below 70%–80%, despite retaining substantial residual capacity, contributing to an estimated 14 million tonnes of retired EV battery waste by 2040. These retired batteries, termed Second-Life Batteries (SLBs), present a promising opportunity for stationary energy storage in microgrid applications, offering high energy efficiencies of 92%–99% and enabling cost-effective and sustainable solutions. Projections reported in the literature indicate that SLBs could provide approximately 96 GWh of storage capacity by 2030 and up to 3000 GWh by 2040, highlighting their large-scale potential. This paper presents a comprehensive meta-review of the prospects for SLB integration into microgrids, addressing critical operational and deployability gaps in existing literature that often treat technical, economic, and control aspects in isolation. A multi-scale framework is synthesized that links battery electrochemistry, degradation mechanisms, repurposing methodologies, mathematical modeling, and system-level energy management. The review further proposes an SLB grading framework, derived from existing battery standards, to support battery selection for microgrid deployment. Advanced control and energy management strategies, together with safety, reliability, environmental benefits and standardization requirements, are critically reviewed to identify barriers to large-scale deployment. Finally, key research challenges, gaps, and future research directions are presented to facilitate the reliable, safe, and economically viable integration of SLBs into modern microgrids. Overall, the study highlights that SLBs can serve as a sustainable, economical, and technically viable energy storage solution, supporting both the global transition toward clean energy systems and the continued growth of electric mobility in supporting circular economy.