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.
