Battery Technology Criteria for BESS (Part 2)

Part 1 of this series discusses how various system-level criteria in the real-world environment impact Battery Energy Storage Systems (BESS) design and selection. We also explain why, thanks to the Tanktwo Battery Operating System (TBOS), operators can change cell types, battery chemistries, and suppliers on demand to increase resilience against supply chain crises while future-proofing operations.

Let’s continue our journey and explore operational and lifecycle considerations, economic and business model factors, and strategies to future-proof a BESS solution.

Address operational and lifecycle considerations

Designing and deploying a BESS is just the beginning. Once it’s live, its value depends on how well you operate, maintain, and evolve it over time to maximize performance and reliability while lowering the total cost of ownership and optimizing long-term ROI.

1. Cycle life and degradation

All batteries degrade, and understanding the degradation pattern can help you optimize system use, plan maintenance, and avoid unexpected downtime or replacement costs. Many factors impact degradation, including battery chemistry, calendar aging, cycle aging, thermal stress, depth of discharge (DoD), and charge rates. 

The good news is that Tanktwo’s predictive analytics and yellow flagging capabilities take the guesswork out of forecasting and managing degradation. The insights empower operators to perform “just in time” maintenance to minimize unplanned downtime while eliminating the wastage and high cost of “just in case” replacements.

2. Warranty coverage and risk allocation

Don’t treat warranty as just fine print — it should be a core component of your BESS's financial and risk strategy to protect against early degradation, manufacturing defects, and performance shortfalls. Align warranty terms with your use cases and watch out for hidden limitations like usage profile assumptions or environmental conditions. 

Log all operating data to prove compliance if you need to file a claim. TBOS’s data-driven approach and extensive logging capabilities complement your strategy, enabling you to collect data and compile reports with the right information.

3. Operations and maintenance (O&M) strategies

Your O&M strategy should cover preventive maintenance, performance monitoring, fault detection and diagnostics, system calibration, and component replacement. The right approach helps ensure optimal performance, extend lifespan, and minimize risk.

Again, TBOS’s extensive dashboard and robust AI-powered predictive analytics simplify battery O&M. Operators can track degradation, throughput, and efficiency, set alerts for faults or thermal thresholds, perform “just in time” parts replacement, and automate reporting to comply with warranties and regulatory audits.

4. Repowering and system upgrades

Repowering involves replacing, augmenting, or upgrading parts of the BESS (e.g., battery modules and inverters) to extend lifespan, improve performance, adapt to shifting requirements, or capture new revenue opportunities. 

Battery type and chemistry compatibility used to be a primary hurdle. However, our software-defined battery (SDB) technology, which enables operators to mix and match cells of different ages and chemistries, makes upgrading battery cells as easy as stacking Lego blocks.

5. End-of-life management

Degraded performance, outdated technology, or regulatory changes will eventually render any BESS non-viable. Planning for end-of-life (EOL) from the start can reduce costs, improve sustainability, and ensure regulatory compliance. For example, you may choose vendors with a robust EOL plan and recycling partnerships.

However, the best way to minimize wastage is a cradle-to-grave approach through which we can squeeze every last drop out of life in a cell. But how? TBOS’s granular management logic and battery analytics match each cell in an ecosystem with operational requirements and demands based on its state of health (SoH). The cell will be deployed and redeployed for various applications until it’s no longer viable, eliminating the second-life problem altogether.

Consider economic and business model factors

BESSs are capital-intensive assets with a long lifespan. It isn’t enough for a system to perform technically. It should also make long-term economic sense. You must, therefore, consider financial frameworks, market participation models, and risk management strategies in your decision-making process.

1. CAPEX vs. OPEX tradeoffs

A BESS's upfront capital expense (CAPEX), including battery modules, inverters, containers, energy management system (EMS), and installation, is significant, but it’s only half the story. Operating expenditures (OPEX) over the system’s 10 to 20+ year life may exceed initial costs.

Financial modeling should include degradation curves, replacement cycles, maintenance costs, and energy throughput limits. Selecting components based solely on CAPEX can result in a higher total cost of ownership (TCO) or premature system failure, leading to costly downtime and high replacement expenses.

2. Monetization models

Different use cases need different revenue models, each with unique technical and economic requirements. These models include demand charge reduction, time-of-use arbitrage, frequency regulation, capacity markets, resiliency-as-a-service, and virtual power plants (VPPs).

Your revenue model will dictate everything from chemistry choice to dispatch strategy. For example, high-cycle services (e.g., regulation) require long-lived, fast-response chemistries (e.g., LFP, flow), while long-duration load shifting might benefit from sodium-sulfur technologies.

3. Incentives and regulatory drivers

Federal and state incentives may impact a project’s financial feasibility. Meanwhile, clean energy standards may create new revenue opportunities for grid-supportive storage. However, maximizing incentive value may require specific design and deployment considerations.

For example, you may need to configure your EMS to comply with reporting standards or work with vendors with a compliance and data management track record.

4. Financing structure and bankability

Storage financing has matured significantly, but investors and lenders still seek risk-managed, technically validated projects. For example, you may reduce a system’s TCO by increasing longevity, improving reliability, and lowering maintenance costs.

You may also enhance a project’s bankability by using proven technology with strong warranties, ensuring data transparency, implementing remote monitoring to support financial oversight, and providing insurance and risk allocation clarity, especially for high-throughput or grid-facing systems.

5. Scalability and portfolio economics

Economies of scale and standardization can significantly improve margins, especially for developers and asset owners with multiple sites or repeatable project types. For example, you may gain procurement leverage and streamline engineering, permitting, and integration. You can also unify monitoring to improve operational efficiency.

Support repeat deployment with modular, standardized systems to reduce time-to-market, lower soft costs, and improve operational consistency. For example, a series of standardized 5 MWh systems may outperform a single bespoke 50 MWh deployment from a risk-adjusted return standpoint.

Future-proof your BESS and set the stage for innovation

How can you make a BESS stand the test of time while battery chemistries, regulations, software, and market dynamics evolve at a breakneck pace?

Future-proof your system with modular hardware architectures to accommodate battery augmentation, inverter upgrades, or enclosure retrofits without disruptive redesign. You may implement TBOS to make your battery solution chemistry-agnostic so it can use cells with new chemistries as technology and requirements change.

Your EMS should support remote updates, API integrations, and data sharing. Additionally, leverage AI and machine learning capabilities for dispatch optimization, degradation forecasting, and market bidding. Choose a trusted vendor with a long-term roadmap and ongoing support through firmware and cybersecurity updates.

Finally, long-term stakeholder alignment is just as critical as top-notch technologies. Your partners and suppliers should provide long-term support and upgrade paths, offer transparency on roadmaps, warranties, and parts availability, and be available to help you evolve your system to meet market demand.

Choosing BESS technology with the complete picture in mind

Selecting a BESS solution is a multi-dimensional decision. It must account for performance, site constraints, safety, integration, scalability, security, lifecycle management, economics, and future adaptability.

Thanks to TBOS, BESS designers and operators can change battery cell types and chemistries on the fly, ride out supply chain crises, use predictive analytics to streamline maintenance, collect data for compliance,  improve cost-efficiency and resource allocation to lower OPEX, and more.

A sound battery strategy is the foundation of a successful BESS solution. Get in touch if you need help defining criteria for a BESS solution, creating a product roadmap, or exploring incorporating cutting-edge battery technology into your product.