About The Author With over a decade in the energy sector, I focus on sustainable energy storage solutions. Beginning my career in R&D on the Tubul Air project, I later moved to Vattenfall for power plant engineering and Samsung SDI for system engineering of Li-ion battery systems. In 2017, I founded Cellution Energy and Cellect Energy, where I am the Managing Director, providing IT solutions for energy asset operations. I hold a Bachelor's in Mechanical Engineering and a Master's in Sustainable Energy Systems. My notable achievements include developing innovative battery technologies and planning the first utility scale energy storage systems in developing markets. Cellect Energy was recognized with the Highly Commended Start-up of the Year Award at the 2023 Energy Storage Awards. My work is rooted in innovation, sustainability, and efficiency.

In today's rapidly evolving energy market, battery energy storage systems (BESS) are becoming indispensable. Whether you're a battery manufacturer, an independent power producer, or an asset manager, understanding battery performance warranties is crucial. This white paper explores the intricacies of battery performance warranties and provides insights into their benefits, challenges, and practical applications. What Is A Performance Warranty? A performance warranty ensures that a battery system meets specific operational and performance criteria over a defined period. These criteria often include maintaining a certain state of health (SoH), energy throughput, and operational cycles. Additionally, performance warranties can also include guaranteed round-trip efficiency and operational availability. Round trip efficiency refers to the ratio of energy discharged by the battery to the energy used to charge it, ensuring minimal energy losses. Operational availability guarantees that the battery system will be ready to operate a certain percentage of the time, ensuring reliable performance and uptime for critical applications. Essentially, it’s a guarantee from the manufacturer or supplier that the battery will perform as advertised, which is vital for financial and operational planning.

Advantages Of Having A Performance Warranty 1. A More Secure Financial Model A performance warranty provides the certainty that your battery system will operate for the planned duration or lifetime. This information is critical during the project planning phase and the operation to ensure a certain return on investment (ROI). Additionally, incorporating a minimum energy throughput per year or over the warranty period into your economic model adds another layer of financial security. Furthermore, round-trip efficiency, which typically decays over time, and operational availability are two additional factors that significantly influence a project's financial gains. As round-trip efficiency reduces, the amount of usable energy decreases, potentially affecting revenue. Similarly, high operational availability ensures that the battery system is ready to perform when needed, thereby maintaining consistent financial returns. These elements underscore the importance of a comprehensive performance warranty in securing the financial viability of a battery energy storage project. 2. Certainty About Meeting Tender Requirements Participating in tenders often demands the provision of a guaranteed energy capacity. For example, the German Innovation Tender InnAus requires a specified energy capacity over a 20- year period. A performance warranty ensures these criteria are met, thereby securing payments throughout the warranty duration. 3. Ability to Fulfill Service Contract Requirements In the United Kingdom, participation in the Capacity Market requires energy storage systems to meet certain energy capacity criteria over specified periods. One notable example is the Capacity Market auction, which mandates that participants deliver a predefined energy output consistently over the duration of the contract, typically spanning one year or more. A performance warranty ensures that your BESS can meet these stringent requirements, thereby securing capacity payments and contributing to the stability and reliability of the grid. By guaranteeing the required energy capacity and operational reliability, performance warranties play a pivotal role in helping asset owners and operators comply with market regulations and achieve financial predictability. 4. Compare Suppliers By Price And Performance Performance warranties play a crucial role in evaluating battery suppliers by providing a comprehensive overview of both performance and price. These warranties enable you to assess different systems on various parameters, ensuring that you make an informed decision. For instance, a system with a lower capital expenditure (CAPEX) might initially seem attractive due to its lower upfront cost. However, it could come with trade-offs such as reduced energy throughput, a shorter guaranteed lifetime, lower round-trip efficiency (RTE), or decreased availability. These factors are important to consider as they directly influence the long-term value and reliability of the investment. A system with higher energy throughput and longer guaranteed lifetime is likely to offer better performance over time, potentially leading to a higher return on investment (ROI) despite the higher initial cost. Similarly, a higher RTE ensures that less energy is lost during the storage process, making the system more efficient and cost-effective in the long run. By conducting a thorough comparative analysis that includes these performance metrics, you can avoid the pitfalls of focusing solely on the upfront cost. Instead, you can evaluate the overall impact on your project's ROI, ensuring that you choose a system that aligns with your long-term goals and performance expectations. This holistic approach not only optimizes your investment but also enhances the reliability and efficiency of your energy storage solutions.