By Adam Shinn, data science manager, kWh Analytics, Michael Cograve, agency principal, Renewable Guard & Ross Kiddie, senior risk manager, Renewable Guard
The energy landscape is undergoing a profound transformation, with battery energy storage systems (BESS) at the forefront of this change. The BESS market has experienced explosive growth in recent years, with global deployed capacity quadrupling from 12GW in 2021 to over 48GW in 2023. These sophisticated systems are revolutionising how we generate, distribute, and consume electricity, offering unprecedented flexibility and efficiency to power grids worldwide.
The trajectory of BESS growth shows no signs of slowing. According to Lloyd’s article in the 2024 Solar Risk Assessment [1], the industry is poised for a staggering 13-fold expansion, with an additional 181GW either planned or under construction.
This surge is driven by several key factors, capturing the attention of developers and investors alike. The intermittency of renewable energy sources such as wind and solar power has created a pressing need for storage capabilities to balance irregular supply with demand. BESS offers crucial grid stabilisation services and enables the delivery of more clean energy.
However, with these opportunities come significant challenges. The rapid growth of the BESS industry has outpaced the development of comprehensive safety standards and regulations. The technology itself, while advancing quickly, still faces issues related to energy density, cycle life and overall performance. Perhaps most critically, BESS installations face a unique risk in the form of thermal runaway events, which can lead to fires and explosions if not properly managed.
