We hear from two battery storage insurance industry sources about how they view the technology and the key risks they assess when designing policies.
Ross Kiddie, North America manager of Altelium’s specialist battery insurance company, said the last 5-7 years of energy storage becoming a mainstream sector is too short a period for insurance companies to understand risks and exposures based on historical data.
“Because this is an emerging and rapidly changing technology, best practices are created and created almost in real time,” he said.
Altelium’s executive chairman, Charlie Grimston, said insurance costs were nevertheless falling due to improved loss experience and a better understanding of risks. This coincides with what the battery storage system integrator said earlier Energy-Storage.news.
Kiddie added that recent high-profile thermal runaway incidents in the US and Australia have highlighted the need to understand and appreciate the risks and the role insurers can play.
According to Kiddie, insurers’ top concerns when looking at a battery storage project are:
- Design the distance between containers or cabinets.
- CAT (catastrophe) risks
- Tide and river flood
- Design conditions
- Quality of production
- Fire protection
- Fire service response plan
“Industry best practice is an end-to-end process that begins at deployment and should continue throughout the entire process from design, construction, commissioning, acceptance and monitoring. ANSI, IEEE, NFPA, and UL applicable safety standards and BESS codes must be strictly followed to be considered best practices.”
A second source in the insurance industry, who spoke on condition of anonymity, pointed out that indoor battery storage systems pose a greater risk by being concentrated in one location rather than spread out like a solar or wind farm.
The supply chain crisis also means that battery storage designs cannot be standardized (which would likely lower the cost of insurance), our source added. In an interview with Julian Jansen, EMEA Director of Development and Market Development at battery storage system integrator Fluence, he talked about the balance between standardization and customized solutions. Energy-Storage.news last year.
“It’s in growth mode and we’re seeing a reflection of (standardization) including ever larger capacities per container, multiple use cases like reactive power and load shifting, and non-lithium-ion technology like vanadium and even gravity storage. systems,” the source said.
They added that some fire safety systems, such as sprinklers, can sometimes cause more harm than they prevent. This is what happened at the world’s largest battery system in Moss Landing, California, where the battery overheating incident was actually caused by sprinklers not spraying water into the cells, which by then were operating at normal temperatures.
Both Altelium and our other source in the insurance industry emphasized the importance of projects meeting strict design standards and safety certifications. Grimston has guest blogged before Energy-Storage.news on data-driven insurance for energy storage.
Solar Media, publisher of Energy-Storage.news, will host the eighth annual event EU Energy Storage Summit in London this week 22-23 February 2023. It’s coming in a few weeks 5th Energy Storage Summit USA, March 28-29, 2023 Austin, Texas, followed by 1st Asia Energy Storage Summit to be held on July 11-12, 2023 In Singapore.