Dr. Kai-Philipp Kairies working in a meetingDr. Kai-Philipp Kairies working in a meeting

This paper will explain:

These three questions share a common theme—batteries are complex assets. But complexity doesn’t have to be a roadblock. Industry leaders understand that small operational changes are often the difference between an average-performing asset and one that outperforms its projections.

Battery data, when combined with powerful cloud computing, has been proven time and time again to give BESS operators the insights needed to get the most value from their assets. 

Is my BESS holding us back from achieving our revenue projections?

ERCOT: 50% of revenue from 50 days
ERCOT: 50% of revenues from 50 days. @modoenergy

When the demand for energy is high, it’s critical your battery energy storage system (BESS) is available; otherwise, reaching revenue targets is likely a pipe dream. The research firm Modo Energy found that in 2022, the ERCOT territory saw 50% of revenues coming from 50 days of the year1. If your BESS is not operating at capacity during one of those peak days, it will significantly affect your bottom line. 

One problem that we see far too often is battery modules not behaving as the datasheet says they should. For example, a battery management system (BMS) might lower the charge current to a smaller value than specified, leaving the system with longer charging times. Another common occurrence is a battery system that works flawlessly in a colder climate might struggle in a hot and humid environment, despite what the datasheet indicates. 

The real world doesn’t always reflect what the datasheet says. Underperforming assets can have a significant negative effect on the profitability of the system. 

Free Webinar: Best Practices and Insights for BESS Commissioning

Are my batteries operating within the warranty?

Ensuring that the storage system complies with intentionally restrictive warranties can be challenging. Most battery warranties include detailed instructions outlining the conditions for maintaining the warranty's validity. For example, a typical warranty might specify that a battery can only be stored four hours per day above 95% State of Charge (SOC). Or the coverage might be reduced for each hour the battery is above a certain temperature threshold.

The restrictions often seem limitless to asset operators. These guidelines differ for every battery supplier and even between products or product generations.

The reason: warranty documents are specifically designed to reduce the battery manufacturer’s liability. 

Unfortunately, many operators are unclear if their warranty is still valid or even how this should be evaluated. Companies that don't verify battery performance while actively managing warranties are very likely missing out on achieving the value of their assets. 

More: Unlock Untapped Value in your Battery Warranties

How long will my batteries last?

This might be the most challenging question of the three. If you listen to battery manufacturers, the answer will likely be in the range of 12-15 years. However, degradation rates and the lifespan of BESS hinge on usage factors such as frequency, depth of discharge, and operational requirements. Not to mention, additional considerations like battery chemistries and temperature.

Depending on your role, battery lifetime uncertainty probably drives some level of apprehension. Will my batteries last as long as we have planned? When one prominent energy storage executive was asked about the industry’s degradation strategy, his response was simply, “Most owners are going to run their batteries into the ground. The only concern is for the market and making money. They are surprised later when the batteries don’t last as long as expected—fingers get pointed.” Unfortunately, this philosophy is the norm and not an outlier.

Managing the total cost of ownership (TCO) of a battery energy storage system is a balancing act. To optimize the TCO, it’s imperative to integrate the degradation costs associated with different cycles into the operational equation. This is where the concept of a digital twin emerges as a powerful tool. By replicating the physical system in a virtual environment, you can track and consolidate cycle costs across systems. This opens avenues for a more nuanced understanding of how each cycle impacts the overall health of the energy storage system.

Armed with this knowledge, the operation becomes a dynamic process, fine-tuned to extract the maximum total value from the asset. It's an approach that transcends the traditional focus on income generation and shifts the paradigm to a holistic consideration of the entire asset life cycle, factoring in both the economic benefits and the inevitable costs associated with aging and augmentation

1 Modo Energy, The Landscape for ERCOT BESS

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