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There are different approaches to battery storage asset management. Learn about the maturity stages companies go through to assess and scale their battery assets while mitigating risk.
With batteries becoming a key component of our mobility and energy world, increasingly companies find themselves navigating operational risks like safety and performance for massive amounts of new assets. As an experienced industry consultant and battery expert, I can say: Welcome to battery storage asset management! It’s a wild, wild world with lots of intelligent and dedicated people – and more smoke and mirrors than even the beauty industry.
The battery market is a world where every new headline could be a groundbreaking innovation or an empty claim that will fade like a summer fling. A world where a group of battery veterans actually coined the rhyme: “Liar, liar battery supplier.” And everyone pretty much agrees. Try it on anyone who has procured batteries at scale or for about three years or more and you’ll get a knowing chuckle—I guarantee it.
By the way: This dynamic is not particularly new or outrageous. Just go back to any PV Expo in the early 2000’s and watch three-year-old companies give thirty-year warranties on modules they had yet to mass produce. Unsurprisingly, many of those companies are not around today and the warranties have quietly vanished with them. Although, the battery market has a substantial difference to the solar world of twenty years ago: batteries are everywhere and affect everyone. From electric cars and bus fleets to utility companies to financiers, battery safety and performance are already a major part of your life.
With over a decade of commercial experience, I’ve recognized a few patterns emerge since the late 2000s. I recently had an interesting discussion with a colleague about the “maturity” of companies when it comes to managing batteries. Over a beer, we identified the following five maturity stages:
Not every company starts in this stage, but many have been there. When first introducing batteries into their portfolios, stakeholders must focus on a million things at the same time, from supply chain restrictions to regulatory requirements. Topics like battery safety and performance are things the supplier should worry about. After all it’s their job and there are warranties and insurance for that stuff, right!?
Companies at this stage recognize that managing battery lifetime and safety is important - just not for them. The reasoning often goes like this:
- ”It’s OK, because my cells are automotive grade NMC (Lithium Nickel Manganese Cobalt Oxide batteries) and not some cheap backyard LFP technology (Lithium iron phosphate batteries).“
- ”It’s OK because mine are robust LFP and not the dangerous, low-cycle NMC.“
Logically, only one of these can be true. In practice, both aren’t. High-profile incidents of battery failures have occurred across all cell chemistries. Yes, that includes solid state and anode free technologies.
Now that the first projects are successfully deployed, companies at this maturity stage typically realize battery systems are not set it and forget it. They dedicate one person to manage the assets and to handle topics like battery lifetime and safety. This person is usually involved in everything from procurement to operations and maintenance—and confronted with a shocking amount of contradicting information. Pretty soon, it becomes clear that battery risks have a massive impact on the bottom line and that substantial opportunities are not leveraged.
At the same time, it becomes clear that spreadsheets and the customer support from the supplier can’t help to manage this ever-growing complexity. And then, it gets even harder: the company wants 10 times more batteries in the next 5 years, but with different suppliers to diversify the supply chain and hedge risks.
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Experienced owners and operators of battery storage assets actively manage their risk with interdisciplinary teams of experts and rely on specialized battery analytics solutions. They have a daily updated view on the performance of each of their battery modules, automated alerts for warranty and safety parameters, and access to know-how in order to deal with underperforming or potentially unsafe assets. When they reach out to their suppliers it’s not to ask open questions but to address imminent issues and back their claims with detailed data. They are able to hit fast-forward to finding solutions and get the asset back on track as quickly as possible.
This is the stage no company hopefully ever ends up: realizing the importance of battery asset management too late and at a high cost. Considering the wild growth in the battery market, which is crushing supply chains, and the speed at which assets are planned to deploy, I anticipate a growing number of companies coming to this stage. And I do hope my predication is wrong!
Not every company is ready to proactively manage battery risk. But, if you’re going to make it in the battery market, eventually you’ll get there. So here are two important steps to help you along your maturity path:
Battery applications are not one-size fits all, so the data you need to manage the assets isn’t either. While battery data guides that cover all the different datasets are helpful to get a baseline understanding, it’s important to define exactly which data is required for your situation. This is where access to an interdisciplinary team of battery and data engineers becomes key. Some companies have internal expertise they can leverage. Nearly every company I’ve seen has either a hybrid team of internal and external experts or relies completely on specialized providers to bridge the knowledge gaps.
It sounds simple, but you’d be surprised how many owners and operators don’t have direct access to the data or do, but aren’t collecting it. And if you’re one of them, then you’re not alone! I recommend adding a battery data section to your request for quotation (RFQ) to ensure suppliers will provide the data on a daily basis. Depending on your situation, you may need to include that the supplier also stores the data too. And if you already have access to the data and want to start collecting it, we can guide you through the set up to make sure your battery asset management is built on a foundation of data-driven insights - just reach out for a data consultation.
Kai-Philipp is the CEO and co-founder of ACCURE Battery Intelligence. He started his journey into the battery world as a test engineer for automotive Lithium-ion batteries in 2008. He has led R&D and consulting projects for mobility and energy companies around the world – from aging simulation to business model development. To recharge, he plays piano or goes to a boxing class.