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What next for battery storage integrators?

08 March 2021:

Tadgh Cullen, Solarcentury

Tadgh leads the energy storage division of Solarcentury, recently acquired by Statkraft. Tadgh is a Chartered Engineer working in a commercial role that focuses on defining business models for co-located, and standalone energy storage developments both in the UK and abroad.

When you look back at how the solar PV industry has evolved over the last 25 years, it is possible to see many similarities to the battery storage space today, particularly relating to the procurement of systems verses individual components.

Battery storage projects in the UK have been dominated by system integrators, whose role is to offer a full battery storage system including components such as: battery modules; heating/cooling systems; enclosures; balance of plant; bidirectional converters; control, communication, and management systems; and a wrap on warranties.

However, is the role of the integrator about to diminish?

One of the main hurdles previously preventing project developers from taking on an integration role is about to be overcome. Designing a heating and cooling system that manages the temperature and humidity inside a battery enclosure is critically important to maintaining the battery module warranty, and this responsibility to date rested with system integrators. However, a growing number of battery manufacturers now offer a wrap including an outdoor rated enclosure, liquid cooling, and battery modules. Significantly, this removes an enormous component from the integrator’s scope.

Is this an attempt from battery manufacturers to cut out the middleman?

Answers supporting and opposing this statement have been heard, and while this is the first step in removing the system integrator, it is only one component in a complicated system. This leads us to the single most important part of the system that allows its seamless operation, and that is the communications.

Although demanding only a small proportion of the overall system capital costs, the communications between the different components is one of the most critical parts of a battery storage system. It is responsible for taking commands, and translating them into safe actions, maximising the life of the product, and doing this in markets that are now demanding the response to be within a hundredth of a second. 

So, an entire system fully dependent on a component with limited contractual value? This is where liability becomes an integrators best friend.

The limited contractual value of the component that ties the entire system together raises challenges in terms of liability, and in particular, the value of this liability. If every component is covered by its own warranty and liability, how can we determine and agree whose liability it is? Essentially the question is, who reimburses the customer for unplanned downtime? This is a  commercial challenge, not a technical one!

Will we get to a point where the procurement of separate components represents enough of a saving to warrant the uplift in risk? The answer to this lies with the integrators and the battery suppliers. Are battery suppliers willing to contract directly and at the same price for smaller order quantities? Are integrators willing to squeeze their margins to remain competitive?

Only time will tell.