BESS: key risk factors
As the energy crisis continues and the world transitions battery containers, with a minimum of 4.5 metre spacing.
to a carbon-neutral future, Battery Energy Storage If a project site is constrained by the available space
Systems (BESS) will play an increasingly important between containers, suitable fire walls between them
role. BESS can optimise wind & solar generation, whilst can help to prevent propagation.
enhancing the grid’s capacity to deal with surges in
energy demand. BESS are able to store excess energy If a project’s thermal runaway exposure is not
in periods of low demand and can be discharged into effectively managed, insurers could impose thermal
the grid during periods of high demand. Operators are runaway or fire sub limits, higher premium ratings and
able to receive a higher price per Megawatt hour for increased deductibles.
their stored energy; this provides financial incentives for
meeting surging energisation needs. Combined with the Probable Maximum Loss
continued fall in Lithium-ion prices over the last decade, Probable Maximum Loss (PML) is an insurer’s risk
this has made BESS an increasingly attractive sector. analysis of a project’s ‘worst case’ loss scenario. For
BESS projects, the PML is likely to be a thermal runaway
So what’s the catch? Lithium-ion batteries are seen to be event that causes the total loss of one or more battery
combustible and hazardous. There have been a number containers. The PML could be calculated as follows:
of high-profile BESS insurance claims in recent years, so
insurers require projects to demonstrate first class risk • Loss Scenario 1: a project has 4 containers with
mitigation and planning. a value of £1,000,000 each. There is less than 1.5
metre spacing between containers, and no fire walls
Thermal runaway & site layout installed. Insurers could foresee in their risk analysis
When insurers are reviewing a BESS project, their that with inadequate spacing, fire would spread to all
primary concern is thermal runaway. Thermal runaway 4 containers and would result in a total loss of all 4
is an uncontrolled exothermic reaction that raises cell containers, valued at £4,000,000.
temperature and can propagate between cells, occurring • Loss Scenario 2: a project has 4 containers with a
when a cell achieves elevated temperatures. Thermal value of £1,000,000 each, spaced 4.5 metres apart.
runaway can occur due to mechanical and electrical Underwriters could take the view that only one
breakdown, thermal failure, internal/external short container will be lost if there is a thermal runaway
circuiting, or electrochemical abuse, leading to a fire. event, as the spacing adequately addresses the
chances of fire propagation between containers. The
During the design and planning phase, the project’s PML is therefore limited to the 1 container valued at
layout of the battery containers is of crucial importance; £1,000,000.
insurers would like as much space as possible between
Renewable Energy Market Review January 2023
The lower the PML that insurers think a project has, the Fire crews may look to contain a thermal runaway event
more favourable the of terms of coverage available. rather than extinguishing it. If a thermal runaway event
Early engagement on the project layout is highly has occurred, the batteries could be heating up at 100s
recommended, so that developers can be advised on the of degrees a minute. Fire fighters will look to cool the
best separation measures for their site design. areas around the battery in containment measures,
aiming to reduce the radiant heat. The containment
Industry standard: UL9540a measure will allow the battery to burn itself out but not
Insurers will always ask for proof that the manufacturers spread to adjacent containers. It can take several days
batteries have undergone successful UL9540a testing for the batteries to cool and be fully extinguished, so
- the UL9540a is a test method for evaluating thermal it’s important that the site has sufficient access to water
runaway fire propagation in BESS. The batteries sources.
are tested on how capable their fire suppression
technologies are at preventing thermal runaway from Conclusion
spreading. The UL9540a is not a type certification The continued development of BESS will be at the
that are typical of wind turbines; however, successful centre stage of a clean and secure energy future.
testing demonstrates that the batteries meet the current Providing effective risk solutions will go hand in hand
industry safety standards. with the future development of this sector. Although
there are risks and hazards involved, early engagement
Battery Management System (BMS) and thorough planning can mitigate the risks and help
Insurers will review the Battery Management System’s maximise the BESS potential.
ability to identify, control, and eliminate potential risk
scenarios. Battery Management Systems should have:
• Recording, monitoring, and analysing of the battery’s
recharging/discharging rate, to prevent over-charge/
discharge - this helps identify abnormal battery
conditions and maintain optimum battery health
• Fire detection systems which are industry standard
Chris Ketley is a Renewable Energy Account
certified, such as NFPA855 or equivalent
Executive & Broker, Natural Resources,
• Effective suppression systems that can isolate cells WTW London.
when critical imbalances have been identified, cutting [Link]@[Link]
the flow of electrons or ions from the affected cells
• Remote offsite monitoring, allowing for 24/7
surveillance of the site
• Cyber security
Container design
Gases being given off by battery cells are an early
indicator that a thermal runaway event is occurring,
so early detection of gases is critical before a build-up
can become volatile. In conjunction with the
BMS, the containers should have some of the
following characteristics:
• Sensitive monitoring and sensor systems which can
detect gases such as methane and hydrogen
• Ventilation systems which are able to remove
flammable gas to prevent a build-up which could result
in explosion
• Temperature and moisture management systems
which can maintain the optimum conditions for
the batteries
Fire response
Emergency response planning should be undertaken
in collaboration with local fire services. Insurers will
ask for a detailed fire response plan and confirmation
that the local fire department is trained to deal with
electro-chemical fires, as well as having planned a means
of response.
Renewable Energy Market Review January 2023
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Renewable Energy Market Review January 2023