According to the U.S. Energy Information Administration, renewable energy sources such as solar and wind are projected to generate 44% of all power in the United States by 2050, increasing the need for battery energy storage systems (BESS). The popularity of BESS is easy to understand: It’s renewable, relatively low cost to install, resilient, efficient and quickly transfers energy from charge to discharge as needed. However, BESS do present certain risks including fire associated with battery electrolyte chemicals.
When BESS first showed up over a decade ago, they were primarily in power generation settings. Today, solar and storage installers and project developers are expanding them to commercial operations, including retail settings such as large superstores, warehouses and data centers. The technology is also expanding quickly with plans to increase utility-scale battery capacity over the coming years.
What are the risks of BESS?
The potential risks of BESS include electrical-related failures, electrocution, combustible gas release and explosion. Most BESS units are powered by lithium-ion batteries, which can experience thermal runaway, where batteries can release flammable gas and ignite when overheated or suffering a short circuit. This cascading effect triggers other nearby cells to fail and produce excessive heat and combustible gases, particularly when there is physical damage, manufacturing defects, short circuits and excessive battery overcharge.
BESS are also susceptible to mechanical and electrical breakdowns, which can render the system non-operational. They can be vulnerable to damage caused by poor handling or improper installation by solar installers or project developers.
Reducing risk of fire loss due to BESS misuse
Risk from fires can be reduced by adhering to NFPA 855 standards for all new BESS installations. These standards were released by the industry in 2020 after research by NFPA’s Property Insurance Research Group found fire hazards with lithium-ion batteries. The standards apply to the design, construction, operation maintenance and installation of BESS with the goal to reduce potential risk associated with the use of BESS.
Best practices for project developers installing BESS containers
It is important to install all new BESS containers on the exterior of critical buildings. The containers should be configured at a minimum of 25 ft from the nearest exterior wall or roof overhang and not in line with any building openings such as windows, doors and vents. Additional BESS containers should be positioned at a minimum distance of 10 ft between other battery energy storage system units/containers.
When BESS units must be placed near a critical building or adjacent storage units, installers should enhance the exterior wall to meet a 2-hour fire resistance rated assembly complete with 90-minute fire rated doors or windows. In addition, a 2-hour concrete fire wall should be provided between the unit and structure and extend past each end horizontally by half the width of the largest container and extend vertically above the height of the container by a minimum of 3 ft.
Outfit BESS with proper exhaust ventilation
In addition, installers should fit exhaust ventilation in the BESS to release off-gasses caused by a developing lithium-ion battery fire and reduce potential for excessive heat, which can lead to thermal runaway. BESS configured within small rooms, enclosures, or containers where flammable gas can exceed 25% of the lower flammable limit (LFL) should be protected with either explosion suppression or deflagration venting designed and installed within requirements of NFPA 69 Standard on Explosion Prevention Systems and NFPA 68 Standard on Explosion Protection by Deflagration Venting.
Install proper detection systems
It is also important to install continuous gas detection within the enclosure, which would activate the mechanical exhaust system upon detection of methane, benzene, ethane, ethylene, hydrogen, hydrogen sulfide and carbon monoxide, all of which are common off-gases from an early thermal runaway event.
For larger capacity units, solar power installers can integrate smoke and fire detection in accordance with NFPA 72 using very early warning smoke detection (VESDA) or radiant-type detection within the container.
Install sprinkler protection systems
Where strong water supply exists, project developers should consider protecting larger BESS capacity units with automatic fire sprinkler protection to enable adequate cooling and reduce the potential for the battery arrangements from reaching thermal runaway. Alternatively, some BESS units are now available with a pre-piped deluge sprinkler system with a connection on the exterior unit, which enables the responding fire department to connect and provide the water supply for the deluge system.
A partner with experience
While it is not easy to predict if a BESS will fail or be disrupted, it is essential for solar and storage installers to take proactive measures to help protect their company and assets. Partnering with an experienced insurance company can be beneficial to the mitigation efforts undertaken by project developers. At The Hartford, for example, risk engineering specialists know the unique risks and challenges that many businesses face. When it comes to BESS, the insurer can work with agents and brokers to help solar installers and project developers better understand the risks and help prevent issues from happening through innovative technology and specialized insurance solutions.
Stacie Prescott is Head of Energy at The Hartford. Throughout her more than 30-year career in insurance, she has gained extensive underwriting experience insuring the energy industry.
Kenneth Travers, CFPS, ARM is Technical Manager – Property and Product Specialist for The Hartford. He has more than 43 years of experience in the risk engineering field developing and delivering loss control engineering services and assessment tools for complex businesses with a focus in natural catastrophe, business impact, supply chain and fire protection engineering applications.
The information provided in these materials is intended to be general and advisory in nature. It shall not be considered legal advice. The Hartford does not warrant that the implementation of any view or recommendation contained herein will: (i) result in the elimination of any unsafe conditions at your business locations or with respect to your business operations; or (ii) be an appropriate legal or business practice. The Hartford assumes no responsibility for the control or correction of hazards or legal compliance with respect to your business practices, and the views and recommendations contained herein shall not constitute our undertaking, on your behalf or for the benefit of others, to determine or warrant that your business premises, locations or operations are safe or healthful, or are in compliance with any law, rule or regulation. Readers seeking to resolve specific safety, legal or business issues or concerns related to the information provided in these materials should consult their safety consultant, attorney or business advisors. All information and representations herein are as January 2024.
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