[ARTICLE 7] HOW TO SELECT THE RIGHT SOFTWARE SOLUTION FOR BESS ASSET MANAGEMENT

This article is the last article of a seven-part series on energy storage systems where we explore the questions we should be asking, the assumptions we should be validating and the things we should be monitoring to ensure the successful deployment of this important new asset class.

This week, we focus in on the most important things to consider when selecting an asset performance management (APM) software solution for battery energy storage system (BESS) asset management – one that provides tools and insights that asset managers can rely on as they monitor and manage the performance of this new asset class.

First we’ll define how energy storage assets differ from other renewable assets. Then we’ll discuss the asset management tools needed to optimally manage a BESS asset over the life of the asset: operating status, asset performance, modeling, maintenance and scheduling.

The three articles closing out this series on energy storage systems wouldn’t have been possible without contributions from Anand Narayanan, VP of Asset Management at Arevon. Arevon is a leading provider of asset management services to owners of utility-scale, industrial and commercial renewable energy generation assets.

ENERGY STORAGE ASSET DIFFERENCES

Although energy storage assets share many similarities with other renewable energy asset classes, some key differences influence how the system can be deployed into the market:

1. Optionality – The energy storage asset class has many operating scenario and market deployment options available to it
2. Operating duty and asset life – The energy storage asset’s useful life is highly dependent on its operating duty

The inherent operating flexibility of the energy storage asset is a double-edged sword. It can be deployed into a variety of markets – resulting in a variety of different operating duties. As a result, the same asset could be cycled 1000 times and last 5 years in one market or be cycled 4000 times and last 20 years in another.

To effectively manage the storage asset’s optionality, the asset manager will need access to lots of operating data. There will likely not be one operating strategy for the life of the storage asset. Asset managers will need to be constantly reviewing historical operating data to select the best current and future operating strategy for each project.

WHAT KINDS OF INFORMATION SOLUTIONS ARE NEEDED?

Other than the asset performance management (APM) platform, likely the most important software tool for the energy storage asset manager is their “what-if” tool. What-if tools provide asset managers with a software solution from which they can run forward and backward-looking (back-casting) operating scenarios and evaluate the financial results.

What-if tools are often complex Excel spreadsheet models that are custom developed by developers and asset managers. The value of what-if tool results is directly proportional to the accuracy of the underlying model and its input assumptions. For the what-if tool to be useful, input assumptions and model parameters such as system availability, round trip efficiency, operating costs and battery module estimated life must be informed by actual operating data results.

If the what-if tool is the asset managers most important economic analysis tool and its value is dependent on good operating assumptions, how do we ensure it is fed with the best possible information?

The following asset management tools are needed to optimally manage the asset over its life:

1. Operating status
2. Asset performance
3. Modeling
4. Maintenance
5. Scheduling

Let’s review each of these information tools in order.

OPERATING STATUS

The asset manager needs to have full visibility into the current state of the BESS equipment. Though the BESS likely came with a monitoring system from the system integrator, the asset manager may want to aggregate and consolidate all this information into a common APM solution.

There are number of good reasons to do this, with the following being most important:

• One shared platform for employees to learn and use means faster employee ramp-up and fewer information silos
• A consistent and standardized set of dashboards, displays, reports and KPIs
• Reduced project cost by not having to pay twice for the monitoring application
• Reduced IT risk – not all storage vendors will survive

The monitoring system should provide historical and real-time visibility into equipment status, production, operating events and safety as well as operational KPIs like availability, cycles and state of charge. All operating parameters should be available for trending – for any time period and at high sample frequencies. Assets should be easily found via search and via a hierarchical tree view, and all asset metadata should be visible from a common asset registry.

In addition to monitoring actual equipment production and operating duty, the monitoring system should track actual vs. warranty and actual vs. design operating parameters and make these easy to compare using charts and histograms.

For example, if monthly and annual cycles are warranted limits, charts of the actual vs. specified cycles should be available to the asset manager so they can easily see if the system is being run within the specified operating envelope. If energy throughput is a warranted limit, throughput trends vs. limits should be graphically displayed and notifications should be triggered if these limits are ever exceeded.

Current and historical operating parameters should be available in a report and easily exported so they can be directly fed into the what-if model to maintain its accuracy.

ASSET PERFORMANCE

I distinguish asset monitoring (knowing the status of the equipment) from asset performance (knowing the past, present and future health of the equipment). Monitoring asset performance is not only a good O&M practice. It also ensures the asset manager’s what-if tool is accurately reflecting actual – not theoretical – energy storage performance.

The following are some of the key asset performance monitoring items your APM should be capable of:

• Equipment health – Monitors how efficiently the storage equipment is storing and converting charged energy to discharged energy. If system round-trip-efficiency (RTE) assumptions are off in your model, the spread between stored energy cost and discharged energy price needs to be even greater if the project is to make a profit. The asset manager will want to know overall system RTE trends as well as the ability to drill down into module, string and bank efficiencies if possible
• Equipment reliability and life assessment – Monitors system uptime (availability), mean-time-to-failure, forced outage rate and battery module useful life. Project economics are highly sensitive to these metrics so it is important that asset managers know where failures are occurring, how often and if OEM battery life assumptions are comparing favorably with field experience
• Advanced analytics – Provides performance analysts and asset managers with deep insights into equipment performance and impending failures. With trustworthy advanced analytics tools, O&M costs can be materially reduced by shifting from corrective and preventive maintenance practices to condition-based maintenance

MODELING TOOLS

Though the asset manager’s modeling tools are important for any renewable energy asset class, they are arguably most important for the nascent energy storage asset class. Two important economic modeling tools persist beyond project financing for the energy storage project: 1) the what-if tool, and 2) the back-casting tool. In last week’s article (and above) we discussed the purpose of the tools and how they need to be frequently updated with historical operating data.

MAINTENANCE SYSTEMS

Though maintenance systems are used by the operator to plan and schedule their field service work, it is important that the asset manager has real-time visibility into the maintenance plans of each project. The asset manager needs to know about both planned and unplanned equipment maintenance as well as have visibility into all maintenance work orders – both past and upcoming.

If maintenance costs or frequencies are not aligned with the budget or plans, the asset manager should be automatically notified to ensure O&M operator compliance and operating assumption validity.

SCHEDULING TOOLS

Current and future status of the battery system equipment needs to be visible to the asset manager at all times via the asset maintenance/management application integrated into the APM platform.

• Planned – or preventive – maintenance covers equipment maintenance that is planned well in advance and may or may not require some or all of the project equipment to be offline to perform the maintenance tasks. The operator and asset manager need to coordinate planned maintenance during periods of low energy prices in the market to minimize the opportunity cost of the maintenance. The asset manager should know at all times what equipment maintenance is planned in the near- and long-term – without having to call the operator. The operator’s maintenance calendar should be visible from the APM for all equipment as well as for the historical work orders performed on the equipment.
• Unplanned – or corrective – maintenance covers equipment repairs, evaluations or restarts that are not planned. Even more important than knowing about upcoming planned maintenance outages, the asset manager needs real-time visibility into all unavailability events in the battery system via automated notifications and simple dashboards in the APM.
• Cycle and duty accounting – Automated battery system operating cycle measurement and accounting is critical to the successful operation of the equipment. Likewise, historical operating duty – including C-rate, depth of discharge and energy throughput reports and trends – needs to be automatically generated so asset managers can make adjustments to dispatch plans and costs if appropriate.

SUMMARY

As a former fossil power and then solar power asset manager, I started my research into the energy storage asset class thinking it would be pretty simple. I mean, how complicated is a battery? I know better now.

The energy storage asset class is providing a different electric product for the grid than other renewable power asset classes and its inherent optionality demands constant feedback of qualified operating data into its dispatch models.

Asset managers who pay attention to the details will be rewarded with successful project returns; those that don’t may be seriously disappointed. This young asset class promises to be an important part of decarbonizing the global electrical grid. As such, we need good operating data, insightful key performance indicators and innovative asset management practices that ensure its success.

Authors

• Steve Hanawalt, EVP and founder of Power Factors
• Anand Narayanan, VP, Asset Management at Arevon

Steve Hanawalt is EVP and founder of Power Factors. For more articles like this, follow him on LinkedIn or check out the rest of our blog.