Battery state of health impacts revenue, safety and operations

A new report from SaaS provider 3E lays out strategies to manage battery degradation.

Inaccurate state of health (SoH) measurements of battery energy storage systems (BESS) can negatively impact battery safety, impede accurate asset evaluation and result in financial losses. 

A new report from Brussels-based 3E, a renewable energy technology and SaaS company, unpacks why SoH is a critical measure of battery performance, reliability and lifespan, breaks down different estimation techniques and explores how digital twins can enhance SoH monitoring and analysis. 

SoH refers to the ratio between a battery’s actual capacity and its nameplate capacity; though the metric can’t be directly measured, it plays a large role in how companies maintain their BESS and perform financial modeling and valuation.  

The report explains that SoH is directly tied to battery degradation, which is influenced by a variety of thermal, chemical and electrical processes that evolve as the battery changes overtime and experiences calendar aging and cyclic aging. As batteries degrade for many reasons, including high temperatures and high resting states of charge, finding a way to accurately measure SoH is critical.  

But estimating a battery’s SoH is difficult due to variability in battery chemistries, manufacturers and operating conditions. 

Experimental, lab-based techniques like charge/discharge tests can be valuable ways to produce accurate results without high amounts of computation required, but their results are generally difficult to replicate. On the flip side, models are flexible, scalable and ideal for real-world applications but are data-intensive 

Some battery management systems (BMS) do use linear cycle-based estimation as a proxy measure. However, this method provides limited insight, as it doesn’t measure the depth of discharge or thermal conditions, among other factors. It also masks degradation mechanisms, making it difficult to find problems until it’s too late.  

The report notes many risks of inaccurate SoH measurements: Thermal runaway becomes a larger risk as batteries approach their end of life, and state of charge calculations are less accurate without firm SoH data. And, a mismatch between a battery’s estimated SoH and its actual SoH can have significant financial consequences, as evidenced by one example cited in the report where there was an eight percent difference. 

“Considering an installation of 50MWh, day-ahead prices of €50/MWh and approximately one cycle per day,” the report said, “This eight percent mismatch can result in around €73,000 [approximately $79,500] of lost revenue because of an inaccurate estimation.” 

It also suggests several corrective, preventive and predictive strategies to decrease degradation and proactively monitor SoH.  

First, regularly updating BMS and repairing auxiliary systems like temperature controls ensures that improvements can be implemented properly. Though it is possible to instantly increase a system’s overall SoH by replacing individual modules with low SoH, the report notes that this can substantially increase operating expenses and should be a last resort.  

Additionally, regular maintenance and frequent capacity testing can optimize resources, improve information sharing among stakeholders and provide qualitative insights. This does require taking the BESS offline, however, so the potential for negative financial implications remains.  

The report also suggests modeling degradation with physics-based digital twins; this cost-effective approach can measure simultaneous thermal, electrical and chemical changes to provide continuous, measurable monitoring of a battery’s degradation and map how different battery components interact to improve or worsen degradation rates.