The global energy landscape is undergoing a massive transformation, with increasing reliance on renewable energy sources such as solar and wind. However, one of the most pressing challenges in this transition is balancing the intermittent nature of these resources with the constant demand for power. BESS is pivotal in addressing this challenge by providing a reliable solution for energy storage. In this article, we will explain what a BESS is, what it does, its importance, how it is deployed, key regions of deployment, and the main challenges facing the industry.
What makes up a BESS?
BESS is a technology designed to store electrical energy in a chemical form for later use. These systems are made up of various components that work together to charge, store, and discharge electricity when needed.
BESS is made up from a core components including: battery cells, battery management systems, power conversion systems, energy management systems, thermal management systems and safety systems.
1. Battery cells
These are the fundamental building blocks of the system. Most modern BESS use lithium-ion cells, though other technologies such as lead-acid, sodium-sulfur, and flow batteries are also used in certain applications. Each battery cell consists of an anode, cathode, separator, and electrolyte, which enable the storage and release of electrical energy through electrochemical reactions.
2. Battery management system (BMS)
The BMS ensures the safe and efficient operation of the battery by monitoring individual cells and controlling charge and discharge processes. It protects the battery from overcharging, overheating, and short-circuiting, while also optimising performance and lifespan.
3. Power conversion system (PCS) inverter/converter
BESS usually store energy in DC (direct current) form, but most grid applications require AC (alternating current) when connecting to the grid. The inverter converts the stored DC energy to AC when discharging and AC to DC during charging.
4. Energy management system (EMS)
The EMS controls the flow of energy between the battery, the grid, and other energy sources. It helps optimise energy dispatch based on market conditions, grid requirements, and system health, ensuring efficiency and profitability.
5. Thermal management system
Batteries operate efficiently within a specific temperature range. The thermal management system keeps the batteries within this range by cooling or heating them as needed.
6. Safety systems
Given the risks associated with high-energy storage, BESS includes a variety of safety mechanisms to prevent fires, explosions, or leaks. These include fire suppression systems, robust containment structures, and sensors for monitoring environmental conditions.
What does a BESS do?
BESS provide a wide range of services to the grid, utilities, and end-users. Primarily, BESS store energy generated during periods of low demand or excess supply, such as during sunny or windy conditions, and release it when demand is higher. This function helps balance supply and demand while reducing dependence on costly and environmentally harmful fossil fuel-powered peaking plants.
BESS also stabilise the grid by providing frequency regulation. Power grids require stable frequencies (e.g., 50 Hz in Europe or 60 Hz in the US), and deviations can lead to instability or blackouts. By quickly injecting or absorbing power, BESS maintain grid stability and prevent disruptions.
Storing energy during periods of low electricity prices and discharging it during high-price periods, a process known as peak shaving, helps reduce demand charges for businesses and utilities. Load shifting, which involves moving energy usage from peak to off-peak times, eases pressure on the grid and improves energy efficiency.
Acting as backup power sources, BESS provide electricity during outages or in areas with unreliable grid connections. Unlike traditional generators, they are cleaner, quieter, and more responsive, making them an ideal option for uninterrupted power supply (UPS) applications.
Integrating renewable energy sources is another key role of BESS, as they store excess energy produced during sunny or windy periods and supply it during times of low renewable generation. This smooths the supply curve and enhances the reliability of renewable energy systems.
In the event of a widespread grid failure, BESS can facilitate black starts by supplying the energy needed to restart power plants without external power, enabling faster recovery from outages. BESS also support voltage control by injecting or absorbing reactive power to maintain the grid’s voltage levels. This service is essential to prevent fluctuations that could damage infrastructure and equipment.
Why is BESS important?
The importance of BESS extends across multiple sectors, driven by the global shift toward decarbonization and the transition to a more sustainable energy future. Several key factors underscore the significance of BESS in today’s energy landscape.
BESS plays a critical role in the energy transition by making the grid more flexible and resilient. As solar and wind power are intermittent and cannot be dispatched on demand, BESS ensures energy can be stored and used when needed, facilitating the smooth integration of renewable energy into the grid.
By reducing reliance on gas or coal-powered peaker plants, BESS helps cut carbon emissions. Storing excess renewable energy that might otherwise go to waste further reduces the need for fossil fuels, contributing to a significant reduction in greenhouse gas emissions.
Enhancing grid reliability is another key benefit of BESS. Modern power systems depend on services like frequency regulation, voltage support, and black start capabilities to adapt to fluctuations. These features make the grid more resilient to extreme weather events and unexpected demand spikes, ensuring stable electricity supplies and supporting national security and economic stability.
Supporting the development of decentralised energy systems, BESS allows communities, businesses, and homes to generate, store, and use their own energy. This decentralisation reduces strain on central grids while promoting energy independence and localised resilience.
As the cost of energy storage declines, BESS offers both economic and environmental advantages. By optimising renewable energy use, reducing electricity bills through peak shaving, and creating new revenue opportunities in electricity markets and grid services, BESS provides a compelling economic benefit.
How do BESS get put into the ground?
The deployment of a Battery Energy Storage System is a complex, multi-step process involving a wide array of actors along the value chain. Here’s a breakdown of how a BESS moves from concept to commissioning:
Battery cell manufacturing
The journey of a BESS begins with the production of individual battery cells. This process primarily takes place in specialized factories, often located in countries like China, South Korea, and Japan, which dominate the global battery manufacturing market. Companies such as CATL, Panasonic, and LG Chem are major players in this space. The cells are created through intricate chemical and mechanical processes, where raw materials like lithium, cobalt, nickel, and graphite are processed and assembled into electrochemical units.
Battery module and pack assembly
Once the cells are produced, they are assembled into modules and then into larger battery packs. This assembly process is usually handled by battery manufacturers or energy storage solution providers. During this stage, battery management systems (BMS) and thermal management systems are integrated to ensure safety and optimal performance.
System design and integration
After the battery packs are created, they are integrated into the larger energy storage system. This includes designing the power electronics (like inverters and transformers) and control systems (such as the EMS) that allow the BESS to interact with the grid. Engineering firms and system integrators play a crucial role in this stage, ensuring that the system meets technical and regulatory requirements.
Site selection and development
Selecting a suitable site for a BESS is a critical step. Factors such as proximity to the grid, land availability, and local regulations all influence where a system can be built. Utilities, project developers, and energy companies are key players in site selection. Environmental impact assessments and grid connection studies are also conducted to ensure the project’s feasibility.
Construction and installation
Once a site is selected, the construction and installation phase begins. This involves civil engineering work (such as preparing foundations, installing containers or enclosures, and setting up power connections) as well as the actual installation of the battery units and associated equipment. At this stage, electrical contractors, engineers, and equipment suppliers work together to build the system.
Testing and commissioning
Before a BESS is fully operational, it must undergo rigorous testing and commissioning to ensure it functions as intended. This includes testing the performance of the batteries, control systems, safety features, and grid interactions. Regulatory bodies and utilities are typically involved in this process, ensuring the system meets all operational and safety standards.
Operation and maintenance
Once commissioned, the BESS enters the operation phase. Regular maintenance is required to ensure optimal performance and longevity, including monitoring the health of the battery cells, BMS, and other components. Remote monitoring systems are often used to track performance in real-time, allowing operators to quickly address any issues.
Where are the key regions in deploying BESS?
BESS is being deployed globally, but several key regions are leading the way.
North America
The United States is a global leader in BESS deployment, driven by state-level mandates (such as California’s aggressive energy storage goals), federal incentives, and the growth of renewable energy. Large-scale projects are being implemented across the country to support grid stability and renewable integration. Canada is also seeing growth, especially in provinces focused on clean energy transitions.
Europe
Europe is another major hub for BESS, with countries like the UK, Germany, and Spain leading deployment efforts. The European Union’s focus on achieving climate neutrality by 2050 has spurred investment in storage, with BESS playing a critical role in balancing the grid as more renewable energy comes online. Germany has a particularly strong residential energy storage market, driven by its large solar PV capacity.
Asia-Pacific
China is the largest producer of batteries and is rapidly expanding its BESS capacity to support its renewable energy ambitions. Japan and South Korea are also key players in the BESS market, both in terms of manufacturing and deployment. Australia has emerged as a leader in integrating BESS with solar energy, particularly in remote areas and off-grid applications.
China leading the way
China’s energy storage market has experienced steady growth, positioning itself as a key player globally in terms of capacity and technological advancements. While the share of renewable-paired projects has seen a slight decline compared to 2023, policy support remains consistent. Under the “14th Five-Year Plan,” China aims to achieve over 1,200GW of combined wind and solar capacity by 2030, highlighting the need for large-scale storage solutions to stabilise the grid and manage renewable fluctuations.
Many provinces have introduced requirements for new renewable projects to include between 5% and 40% of storage capacity, with discharge durations between 1 and 4 hours. These measures aim to mitigate issues like renewable curtailment and grid imbalances. The newly implemented Energy Law provides a clearer regulatory framework, streamlining project approvals and promoting market-driven electricity pricing. These changes are expected to improve the profitability of storage projects by enabling revenue generation through services like peak shaving and frequency regulation.
In the commercial and industrial (C&I) sector, demand for energy storage is increasing as businesses look to reduce electricity costs and enhance energy resilience. Ongoing electricity market reforms in China are widening the peak-to-off-peak price differential, making energy arbitrage more viable. Additionally, several provinces offer subsidies for C&I storage projects, encouraging investment in battery systems for cost savings and backup power.
Looking ahead, China’s energy storage market is projected to maintain strong growth, with annual capacity additions likely to surpass 240GWh by 2030. This expansion is driven by sustained policy support, evolving market mechanisms, and continuous improvements in battery technology.
What are the main industry challenges?
Despite the many benefits of BESS, the industry faces several key challenges.
Cost
Although battery costs have dropped significantly in recent years, they still represent a major portion of the overall project cost. The price of raw materials, manufacturing complexities, and supply chain constraints can all drive up costs. Additionally, grid-scale storage projects require significant capital investment, which can be a barrier to widespread deployment.
Safety
Safety is a critical concern in BESS deployment. Lithium-ion batteries, the most commonly used type, can pose fire risks if they are overcharged, overheated, or damaged. High-profile incidents, such as battery fires in grid storage systems, have highlighted the need for robust safety protocols and advanced battery management systems.
Performance and longevity
The performance and lifespan of battery systems are still areas of concern, particularly in applications requiring frequent charging and discharging cycles. Over time, batteries degrade, which can reduce their efficiency and capacity. Research is ongoing to develop more durable battery chemistries and to improve the overall reliability of storage systems.
Grid connection and regulation
Connecting a BESS to the grid can be complex, with regulatory hurdles varying by region. In some areas, outdated grid infrastructure may struggle to accommodate large-scale energy storage systems. Moreover, the regulatory frameworks governing energy storage are still evolving, and in many cases, the market rules have not caught up with the technology.
Conclusion
BESS is transforming the energy landscape by enabling a more flexible, reliable, and sustainable power grid. From storing excess renewable energy to stabilizing the grid, the role of BESS is crucial in the global shift towards decarbonization. While challenges related to cost, safety, performance, and regulation remain, ongoing innovations and investments are making BESS more accessible and viable. As deployment increases in key regions such as North America, Europe, and Asia-Pacific, BESS will continue to play a central role in the energy transition.
