Applications: Battery Energy Storage Systems (BESS)

ESS Technology Bankability - Degradation, Cycle-life And Product Warranties / Guarantees

Workmanship Warranties: Most BESS Manufacturers, together with EPC contractors, offer a ‘workmanship warrantyʼ that covers a period following the systemʼs reaching Commercial Operations Date COD. Most commonly this warranty is valid for 13 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 systemʼs scheduled maintenance hours

Corrective Maintenance: Most LTSAs do not cover corrective maintenance, which is the result of an unexpected event in the systemʼs operations, although some contracts offer a higher-priced ‘Extended Warrantyʼ 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.