GCube study charts BESS ‘failures’, warns insurers need confidence on risks

GCube study charts BESS ‘failures’, warns insurers need confidence on risks

GCube study charts BESS ‘failures’, warns insurers need confidence on risks 1024 628 Energy Storage Journal

February 22, 2024: More than half of BESS failures happen within the first two years of operation, according to analysis published by renewable energy projects insurance underwriter GCube yesterday.

GCube said its report* — Batteries Not Excluded: Getting the insurance market on board with BESS —  is based on analysis of 12 years of public BESS failure data

However, the company said underwriters are increasingly supporting the battery storage sector, but need confidence about the management of thermal runaway risks, public safety liabilities and transportation “challenges”.

GCube itself expects BESS assets to represent 30% of its underwritten renewables portfolio by the end of this year.

Key findings include that, overall, the market now has around 10 failures reported on average each year — a 10=fold increase compared to 2016.

While this escalation suggests an expanding battery market, it also highlights the absence of well-established safety and reliability procedures.

GCube says while the statistics broadly align with industry growth, there is concern that failure trends may persist as the market deploys larger 100MW+ utility-scale assets, leading to increased financial losses for owners, developers, and insurers.

“This concern arises from a recurring pattern in rapidly expanding market segments, where new technologies often face challenges related to quality control — a dynamic recently observed in the offshore wind market,” the report said.

GCube urges developers and owners to take measures including ensuring sufficient spacing between battery modules and careful selection of the most appropriate battery tech for projects.

Fraser McLachlan, GCube founder and CEO, said: “We don’t want to repeat the mistakes of the past of allowing growth in deployment and technological scale to take priority over quality control, and the large-scale losses and market destabilisation that result from that.”

Energy Storage Journal reported last November that the Pacific Northwest National Laboratory had issued guidance to help planning chiefs prepare for the safe expansion of energy storage systems in the US.

The lab offered it said real-world examples of how communities have dealt with BESS projects to date — including dealing with risks of system failures and fires.

*GCube’s full report is online.

Photo: GCube