Applications: Battery Energy Storage Systems (BESS)
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Sources and links on page 150 (4)
Links embedded in the original report PDF, including citations and other references. These destinations have not been independently reviewed. Links open in a new tab.
- https://www.nortonrosefulbright.com/en/knowledge/publications/e295e9d2/the-bess-is-yet-to-come
- https://www.accure.net/battery-knowledge/third-party-battery-warranty-management-benefits
- https://www.dnv.com/article/energy-storage-capacity-warranties-beyond-the-fine-print-200339/
- https://www.energy-storage.news/complexity-and-risk-of-bess-warranties-prohibitive-for-some-asset-owners/
Text on page 150
ESS Technology Bankability - Degradation, Cycle-life And Product Warranties / Guarantees
Workmanship Warranties: Most BESS Manufacturers, together with EPC contractors, offer a ‘workmanship warranty’ that covers a period following the system’s reaching Commercial Operations Date (COD). Most commonly this warranty is valid for 1-3 years, covering initial defects and component failures (short-term).
Performance Guarantees: Beyond COD, manufacturers typically offer performance guarantees for their systems under a separate Long Term Service Agreement (LTSA). These guarantees allow for a certain level of guaranteed degradation, verified by a capacity test, conducted annually. The most common terms for an LTSA are warranties:
7,200 cycles over 20 years (equivalent to 1 cycle per day), although some manufacturers are offering warranties up to 10,000 cycles over 25 years
Typical degradation from 100% at COD to approximately 70% in year-20
Typical round-trip efficiencies
Guaranteed Availability of 97% or more, outside of the system’s scheduled maintenance hours
Corrective Maintenance: Most LTSAs do not cover corrective maintenance, which is the result of an unexpected event in the system’s operations, although some contracts offer a higher-priced ‘Extended Warranty’ which does include a larger payment to account for corrective maintenance work.
Insurance Requirements: Insurance is typical at several tiers of the project: manufacturers insure their expected degradation levels, EPC contractors hold insurance policies to cover for unforeseeable issues in construction, and projects transition to operational project insurance once the project has reached COD.
Bankability: All of the above policies, warranties, and guarantees have become more standardized in the industry, resulting in greater confidence for finance of utility-scale energy storage projects; collectively this is a sign of the industry maturing and becoming more bankable.
Source: PowerSwitch, Norton Rose Fulbright, ACCURE, DNV, Energy Storage News
Extracted from the PDF; charts and images may read imperfectly.
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