From Strategy to Spec Sheet: Redefining Energy Storage Requirements in a Dynamic Market (Part 1)

Identifying requirements is critical in designing and implementing a battery energy storage system (BESS). Done well, the system meets promised performance, lifecycle, and revenue. Done poorly, even the best project can face underutilization, compliance delays, or premature degradation.

Meeting changing and often conflicting BESS requirements is rarely straightforward. For example, a project built for frequency response may later need to support longer-duration shifting; a warranty condition may restrict operating flexibility; a permitting authority may interpret fire codes differently midway through commissioning.

These changes often require adjusting battery characteristics. Yet, the traditional approach to battery pack design means owners must pay for costly redesign and retrofitting or risk compromised performance and business outcomes.

Advanced battery technology, such as Tanktwo’s software-defined batteries (SDBs), will provide owners and operators with the agility to align business goals, compliance needs, and technical realities as BESS requirements evolve post-implementation. Rather than locking a BESS into a narrow duty profile, SDBs offer greater flexibility in defining, managing, and satisfying BESS requirements throughout a solution's lifecycle.

This article explores the nuances in identifying BESS requirements and how advanced battery technologies contribute to building agile and resilient systems.

Translating business cases into technical specs

Every BESS project should be grounded in a business case. However, turning intent into technical specifications can be a complex endeavor. Your requirements must capture the immediate application (e.g., frequency regulation, peak shaving, renewable shifting, or backup resilience) and anticipate how those needs may evolve over the system’s 10–20 year lifecycle.

At a minimum, the project team must define parameters such as power capacity (MW), energy capacity (MWh), cycle profile (e.g., frequency, depth of discharge, and throughput), response time (e.g., ramp rate and latency), and availability targets tied to revenue contracts.

Defining these parameters isn’t too challenging at a given point in time. However, they’re rarely static: A BESS optimized for two-hour renewable shifting today may have to deliver four-hour discharges tomorrow. Markets and interconnection agreements may alter response-time obligations mid-contract. Warranty constraints can force conservative operating envelopes, limiting revenue generation.

Translating business goals to technical requirements is not a one-time process, but an ongoing balancing act.

However, traditional battery packs don’t provide the agility to adapt because fixed cell chemistries and configurations lock in performance. Once deployed, adjusting to new requirements typically means over-provisioning capacity, costly repowering, extensive downtime, or, in some cases, accepting underperformance.

How advanced battery technology solves the challenge:

SDBs built on TBOS are chemistry-agnostic and modular at the cell level, allowing owners to configure or reconfigure capacity and behaviors to meet evolving requirements. Operators can dynamically adjust performance characteristics without wholesale redesign. They can align technical specifications with changing business objectives more fluidly and cost-effectively than conventional approaches allow.

Multi-use case stacking and conflicting demands

To maximize return on investment (ROI), developers increasingly stack use cases, such as combining frequency response with renewable shifting or demand charge management with backup resilience. While stacked applications multiply revenue streams on paper, they create conflicting requirements that are difficult to reconcile in practice.

For example, frequency response demands rapid, shallow cycling, with thousands of micro-discharges per year. Meanwhile, renewable shifting requires longer, deeper discharges. When both services are assigned to the same asset, the battery must withstand a high throughput of shallow cycles without sacrificing its ability to handle deep, sustained discharges. 

Conventional battery technology is poorly suited to handle such a balancing act due to fixed chemistries and rigid pack formats. Engineers often design their solutions around one profile while compromising the other — shortening useful life, inflating oversizing costs, or constraining the asset’s ability to fully participate in stacked markets — while leaving operators limited levers to stay agile.

How advanced battery technology solves the challenge:

SDBs and TBOS allow operators to adapt dynamically to shifting duty cycles. By monitoring each cell’s state of health (SoH) in real-time, the system intelligently routes and balances degradation across cells, preserving performance under mixed use cases. Additionally, predictive analytics flag cells approaching their stress limits, enabling proactive replacement or reconfiguration before failures impact availability.

The capabilities allow engineers and operators to pursue use case stacking while minimizing trade-offs. They can satisfy previously conflicting requirements to extend the useful life of a system while protecting project economics.

Grid, compliance, and safety requirements

Many BESS solutions must address the realities of grid interconnection and safety regulation. These requirements are often the hardest to predict during the early design phase, yet the most disruptive when overlooked.

Grid interconnection requirements can vary widely across utilities and markets. Some specify strict voltage and frequency ride-through capabilities, while others impose fast-ramping obligations or black start capability. Requirements may also evolve mid-project, as market operators refine participation rules or revise ancillary service protocols.

After each adjustment, engineering teams must verify that the battery system can deliver the necessary response times and operating envelopes, which impact the project timeline and costs.

Moreover, we must address complex safety and compliance requirements. Standards such as NFPA 855, UL 9540, UL 9540A, and IEC 62933 continue to evolve, and their interpretation by local authorities having jurisdiction (AHJs) can differ from one site to the next. What works in one region may not get approval in another. 

Developers must also consider siting and integration, which depend on fire separation distances, enclosure design, thermal runaway testing, and access requirements for first responders.

Conventional battery packs don’t provide sufficient compliance adaptability. Once a pack is certified for a specific chemistry and format, adjustments to meet new standards or AHJ interpretations often require costly redesign and/or re-certification. These constraints lock owners into conservative design options to hedge against regulatory uncertainty.

How advanced battery technology solves the challenge:

SDBs built on the Tanktwo Operating System (TBOS) feature a modular, chemistry-agnostic architecture to help developers and operators adapt to changing regulations. For example, you can adjust battery parameters via a software interface to meet regulatory and safety requirements without ever needing access to the hardware.

Enhanced monitoring and fault detection provide the data transparency that regulators demand, while flexibility and agility translate into simpler permitting. The technology supports a system that can maintain compliance and grid participation value even as requirements shift, avoiding costly retrofits and project delays.

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Support modern BESS deployment with advanced battery technologies

We’ll continue to explore how advanced battery technologies support shifting BESS requirements in the next installment. Ready to redefine how you design and develop BESS solutions for increased agility, reliability, and resiliency? Learn more about our Battery Advisory Services and see how we can help you refine your requirements.