This article is article three 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.
In last week’s article on energy storage, we discussed the information gaps operators are challenged with as they operate and maintain battery energy storage systems (BESS) and what can be done to close those gaps.
This and next week, I’ll share key insights gathered from operators about the kinds of monitoring and decision-support tools they are looking for in managing the long-term performance of this new generation of energy storage systems.
Part I covers warranty and performance monitoring, including warranty parameter tracking, module and unit temperature monitoring and performance guarantee tracking. Stay tuned next week for Part II, where we’ll dig into tracking other key BESS operating parameters, regulatory and commercial monitoring, and equipment monitoring and safety.
I would like to thank Michael Eyman and Josh Corbitt of Origis Services and Ken Kim of Origis Energy for their expertise and contributions. Origis is a leader in operating and maintaining solar and energy storage systems throughout North America.
As we discussed in our last article, warranty monitoring for the BESS asset class is complex – and the responsibility for tracking warranty compliance falls on the shoulders of the operator. Though the operator is usually responsible for warranty administration in the energy industry, the stakes are higher for the BESS asset due to the high volume of operating parameters that must be tracked to provide evidence of warranty compliance.
Additionally, most energy conversion assets have limits built into their control system logic that prevent operation outside of warranty limits. This is not the case for the battery asset, as a person could easily operate within some control system equipment limits and still void the warranty by over-cycling or over-discharging the system.
And, unlike other energy conversion assets, the operator of the battery storage system usually does not have their “hands on the throttle” of the battery charge/discharge controller. Typically, battery scheduling and dispatch is performed by the scheduling coordinator or PPA offtaker of the system. This puts the operator in the uncomfortable position of having responsibility for – but not full control over – the warranty management of the battery system.
Considering these challenges, what kinds of data and monitoring tools are BESS operators looking for to help them manage this asset? The following are a few of the most important asks.
As noted above, the operator is responsible for tracking BESS operating parameters over the life of the project – not only to ensure the safe and reliable operation of the asset, but also to have ready evidence available should there be a warranty claim or dispute. Were battery system warranty limits ever exceeded? Battery OEMs and system integrators will require this data to review warranty claims from the owner or operator of the system, and the current industry standard is that all these operating parameters will be sampled and aggregated no less than once every 15 minutes.
It should be noted that various stakeholders have warranties in a BESS project, including a wrap warranty provided by the EPC, a unit warranty provided by the system integrator and a battery warranty provided by the OEM. Though any combination of the three may monitor warranty parameters during the life of the project, the operator is in the best position to perform the monitoring on behalf of the owner.
Why is this? Because the operator is impartial and the operator role persists over the life of the asset, whereas every other stakeholder sheds warranty responsibility as time goes on. If and when the owner trades out operators over the life of the asset, predefined data storage, governance and handover terms should be written into the operating agreement to ensure that there is continuity of warranty administration and operating data over the life of the project.
As a minimum, all operating parameters that are explicitly included in the design and operating manuals of the battery system should be included in the warranty parameter tracking database, including information about battery charge/discharge and what entity performed the control function when dispatching the unit, even if indirectly.
For example, if the trading desk of the schedule coordination (SC) entity authorizes battery cycling that is outside of the warranty terms, it is important that this is logged electronically in the system to be able to later identify where warranty term violations may have occurred. It very important that the operator and the SC both have historical and forecasted battery cycle operating data visibility to avoid exceeding warranty operating limits.
We recommend that data sampling and storage be performed at the most granular level possible to support warranty claims. Though most warranty parameters specify operating temperature limits at the system level, it is prudent to collect and consolidate data at the unit or module level if the sensor data is available. Then, if a dispute arises and the OEM argues that a battery module or cell temperature excursions occurred, the operator is able provide as much evidence as possible to contradict this claim. It is interesting to note that BESS operating temperature data to support warranty claims will likely grow to over a terabyte of data storage over the life of the project.
Like warranty claim information, tracking of performance guarantee information can be complex from a monitoring and data administration perspective. Though performance guarantees are typically project-specific, operators will want to track the following information and store 5-15 minute consolidated data in the asset performance management (APM) system:
To monitor the vendor’s guaranteed battery capacity degradation rate requires periodic capacity testing of the system with data corrected to the same test conditions as the initial capacity test. It is important that the operator explicitly follow the test requirements of the capacity test procedure and that the test results are normalized in the same manner as the initial system capacity test.
How the actual system degradation is calculated and reported on after receiving the results of these periodic tests should be explicitly described in the performance guarantee language. For example, is a “true-up” period included in the performance guarantee where overperformance during one period can be banked against underperformance in another time period? Does failing the annual degradation rate test in any given year constitute a payout, or is the guarantee based on the cumulative degradation rate of the system? All this detail must be explicitly called out in the performance guarantee to avoid ambiguity when a warranty claim is filed.
Another typical performance guarantee provided by battery vendors is the system’s round-trip efficiency (RTE), which is the fraction of energy put into the storage system during the charge cycle that can be retrieved during the discharge cycle. Like the capacity test, specific test procedure language with data normalizations, if any, need to be included in the performance guarantee.
The battery energy level at the charge and discharge endpoints as well as the state-of-charge (SOC), number of cycles and system temperature will need to be recorded for the charge/discharge cycles. Ideally, the battery’s thermal management system can maintain the unit at 25 degC during the test period.
The best way for the operator to manage this data collection and guarantee calculation is to have predefined test reports configured in the APM that collect the data at the sample frequencies described in the test procedure. The data can then either be exported to the test procedure spreadsheet where data reduction and calculations are performed, or, ideally, the APM can generate the final report at the click of a mouse.
Definitions of an energy system’s availability vary widely. Therefore, it is very important that the term is defined in the performance guarantee and that the method of calculating it is specified. The guarantee language should specify if it is a time-based or energy-based availability guarantee. Will the evaluation envelope be at the module, converter or system level? Will there be exclusions for unavailability events that are outside the control of the operator, such as grid outages?
Like the capacity and RTE tests, the operator needs to acquire a large volume of operating data, consolidate that data in accordance with the guarantee conditions and calculate pass/fail for each evaluation period. Unlike the capacity and RTE guarantees, additional time-stamped transactional data will need to be collected and stored in the APM to align operator and SC actions with system operations during the year.
We recommend that all unit and system unavailability operating events are automatically categorized by type, responsibility and controllability. This will allow the operator to easily assign contractual excusability to events that are outside of their contractual control and responsibility when calculating system availability. Like the other guarantees, a predefined performance guarantee availability report should be configured in the APM for easy access and evaluation by all project stakeholders.
We still have much to learn about the safe, reliable and economic operation of the new and very important energy storage asset class. If large-scale application of hybrid energy storage systems were deployed in Texas, the recent grid failures likely could have been averted. The industry needs to equip owners and operators with the tools and information they need to safely and reliably manage this asset of today and tomorrow.
Stay tuned next week for Part II of this article. In it, we’ll continue to discuss the tools and information operators need to manage this new asset class. As always, your feedback is appreciated.
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.