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BESS: Mitigating the rising risk of thermal runaway

The speed of battery storage growth requires an understanding of exposures such as fires caused by thermal runaway incidents. Learn strategies to mitigate thermal runaway risks.

Electric cable inserted into car for charging closeup. Environmental protection safe fuel for cars concept

This is the second article in a four-part series on battery energy storage systems. Read the first article here.

Energy storage and rechargeable batteries are key to unlocking the potential of renewable energy. Lithium-ion batteries are already facilitating the integration of renewable energy supplies into the grid. This is a rapidly evolving field, and as with all developing technologies, some trends and pitfalls are beginning to emerge.

One risk is fires caused by thermal runaway, which are causing meaningful losses in the industry and a tragic loss of life in some cases. It’s imperative that battery energy storage system (BESS) users understand this risk and the steps they can take to mitigate it.

What is thermal runaway?

Batteries have long been a big part of our lives, and now power many items used in our daily lives such as our cars, laptops, and mobile devices. These small-scale batteries (such as Ni-Cad and Li-ion batteries) are fairly robust and have limited power and duration.

BESS are batteries deployed on a much larger scale, with enough power and capacity to provide meaningful storage for electric grids. A BESS can be a standalone system located near transmission infrastructure, or integrated into renewable energy sources or other power generation facilities. BESS projects are also deployed as a power storage solution for remote areas of the country that are not connected to a power grid.

Whenever a large amount of energy is stored — whether in traditional liquid/gas forms or in batteries — there is a risk that an uncontrolled release of the energy could result in a fire or explosion. In batteries, thermal runaway describes a chain reaction in which a damaged battery begins to release energy in the form of heat, leading to further damage and a feedback loop that results in rapid heating.

Left unchecked, the heat generated can cause a fire. The only way to stop thermal runaway is rapid cooling of the affected cell(s). Alternatively, the affected battery module can potentially be separated, so that the reaction is allowed to reach its destructive conclusion in a safe location.

Figure 1: Thermal runaway is a chain reaction that leads to a destructive feedback loop.

Even if the fire is suppressed, thermal runaway alone can generate enough heat to damage adjacent cells and propagate the reaction. Thus, thermal management, fire suppression, and physical design layout to isolate batteries from each other are all essential elements to protect a BESS installation from a thermal runaway event in a single cell.

Large-scale battery fires have occurred in almost every jurisdiction with BESS deployments over the last few years. For example, South Korea suffered multiple destructive fire events between 2017 and 2019, which led to a government investigation and orders to shut down some units and limit the charge rates of other BESS installations nationwide.

Despite these changes, other fire events have occurred in South Korea. Additional fires in Europe and North America have highlighted that this failure mode is not unique to a particular manufacturer or design — it’s inherent in the technology.

It has been observed that the majority of fires are caused by:

  • Temperature control.
  • Inherent cell defects.
  • Damage during construction.
  • Operation of the BESS outside of prescribed parameters (for example, temperature, charge rate, and state of charge).
  • Damage due to operational negligence.

Proactively managing risks

It is clear from the number and frequency of incidents that thermal runaway and battery fires are a serious risk that must be proactively managed by the owners, operators, and constructors of BESS systems. A holistic approach in BESS design is needed for each project.

Batteries must be protected from day one of construction and there must be a zero-tolerance approach to battery abuse. Battery management systems must be sophisticated, monitored, and responded to. Gas detection, explosion prevention, fire detection, and fire suppression as well as a robust emergency response plan are essential to mitigating damage if a thermal runway event occurs.

A number of new and recently revised industry standards are relevant to the design and deployment of BESS systems. However, the technology and industry continues to develop rapidly and is constantly innovating to improve project value and safety.

We believe that standards will continue to evolve in response to learnings from events and greater understanding of failure modes in the industry. As the industry continues to develop, insurers will look more favorably on BESS projects that are built in accordance with the latest standards.

While future-proofing an installation to ensure long-term insurability can be challenging in this environment, success can be found in a holistic approach that covers all aspects of the design. A recent Marsh survey found that insurers of BESS facilities were most interested in the fire protection features, followed closely by space separation between battery enclosures.

To assess emergency response, underwriters look for evidence of detailed dialogue with emergency services and a written protocol for incidents — for example, documented pre-fire plans. Ultimately, early engagement with your risk adviser is key to ensuring that your project is well-protected, safe, reliable, and positioned to benefit from a competitive insurance placement for the long-term life of a project.

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