Data availability is a critical factor in underwriting battery energy storage systems (BESS) because it directly impacts the ability to assess the system’s operational performance, reliability, risks, and financial viability. Several dimensions illustrate the role of data availability in this context:
Detailed Understanding of System Performance and Risk
- Underwriting BESS requires a much more granular understanding of power markets and system operations compared to traditional renewables like wind and solar. Accurate performance data helps underwriters evaluate how the BESS will function under different market and operational conditions.
- Data on system performance and availability is among the top priorities for battery storage professionals, highlighting its importance in maintaining operational reliability and ensuring safety.
- Comprehensive historical data on the operation, performance, and failure rates of BESS is scarce but crucial for accurately assessing risks and underwriting policies.
Enhancing Battery Analytics and Predictive Maintenance
- Access to extensive and high-quality battery data allows investors and underwriters to leverage sophisticated battery analytics tools that optimize asset performance, predict failures, and improve safety.
- Early integration of battery analytics—starting from project planning and commissioning phases—relies on timely and comprehensive data access, enabling proactive identification and resolution of potential issues before they escalate.
Risk Assessment and Underwriting Criteria
- Detailed data informs critical underwriting considerations such as site conditions, plant construction year, exposure to natural hazards, and compliance with manufacturer maintenance guidelines.
- Access to internal system metrics (e.g., cell internal resistance, leakage detection) guided by manufacturer specifications supports informed risk management and underwriting decisions.
Data Access Agreements and Strategic Planning
- Negotiating clear agreements with system providers (OEMs, integrators) regarding data access is vital to ensure continuous availability of relevant data for ongoing monitoring and analytics.
- This strategic approach to data accessibility maximizes the benefits of analytics, enhancing the efficiency, safety, and lifespan of the BESS investment, and supports the underwriting process by providing reliable risk profiles.
In summary, data availability underpins the underwriting of battery energy storage systems by providing the necessary insights into system reliability, performance, and risk exposure. Without detailed and continuous data, underwriters face challenges in accurately pricing risk and ensuring coverage aligns with the asset’s true operational profile. Therefore, establishing strong data governance and access frameworks is fundamental to effective BESS underwriting and risk management.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-role-does-data-availability-play-in-underwriting-battery-energy-storage-systems/
