The importance of battery energy storage systems (BESS) cannot be overstated, as they play a crucial role in mitigating the intermittency of renewable energy sources.
Because energy generation from wind and solar are variable resources, a robust solution is needed to store and keep this clean energy flowing through the grid for when it’s needed. Battery storage technology and infrastructure are therefore central to the renewable energy transition, presenting a clear market opportunity.
These sophisticated systems are revolutionizing our electricity generation, distribution, and consumption, offering unprecedented flexibility and efficiency. Global deployed capacity in the BESS market quadrupled between 2021 and 2023, and this explosive growth is forecast to continue gathering pace, with 13 times the current global capacity already under construction or planned.
As BESS market growth outpaces the development of safety regulations, the sector’s future hinges on our ability to build resiliency into design, operation, and insurance.
Insuring BESS installations presents unique challenges due to the technology’s rapid development and the potential for catastrophic events like thermal runaway, which can cause fires and explosions if not properly managed. Protecting these assets effectively is therefore key to securing favorable insurance terms and unlocking the financing required for BESS projects.
Maintaining resiliency in battery storage
Investing in resiliency measures protects battery storage assets, enhancing safety, preventing costly issues, and can reduce the cost of insurance with kWh Analytics.
Risk mitigation best practices for battery storage have evolved significantly in recent years:
BESS best practices
Battery management systems (BMS) sense critical parameters and trigger corrective actions when required, supporting performance optimization and safety management.
While prevention is key, multi-layered fire suppression, combining gaseous, water-based, and coolant-based systems, offers a decisive last line of defense.
Explosion relief systems must conform to NFPA standards, with sufficient spatial separation between containers or structures to avoid collateral damage.
Complying with evolving fire and building standards is essential for BESS resilience, so operators must stay updated and adapt their systems as required.
Demonstrating resilience
Autonomous systems that detect anomalies and quickly correct issues help to prevent thermal runaway and demonstrate safety to insurers.
The chosen battery chemistry is critical in a project’s risk profile, with lithium iron phosphate (LFP) batteries generally favored for their stability.
A BESS installation’s design, including spatial separation, fire suppression, and expert consultation, significantly impacts its risk assessment.
Comprehensive documentation, detailing how each element contributes to a site’s risk mitigation strategy, is critical for demonstrating safety to insurers.
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