In recent years, the proliferation of lithium-ion (Li-ion) batteries has revolutionised energy storage, enabling advancements in everything from electric vehicles to grid-scale Battery Energy Storage Systems (BESS). However, along with their benefits, these technologies bring unique challenges, especially when it comes to managing claims resulting from battery fires.
Understanding grid-scale batteries
Grid-scale batteries, such as those used in BESS, are crucial for storing renewable energy and stabilising power grids. Unlike traditional power sources, these batteries can be rapidly deployed and are scalable, offering significant advantages in managing the intermittency of renewable sources like solar and wind energy. Many commercial buildings now have large batteries for power back-up and energy reduction purposes.
Special risks and challenges
Despite their advantages, Li-ion batteries pose inherent risks due to their potential for thermal runaway. When a battery fire occurs in a BESS, the consequences can be severe, including substantial property damage, potential contamination of surroundings and significant interruption to operations. Fires can occur under various circumstances, including overcharging, defective equipment, overheating/exposure to heat or extreme conditions and internal defects, to name a few. Moreover, the unique nature of these fires complicates the insurance claims process in several unique ways:
1. Firefighting challenges: Traditional firefighting methods are mostly inadequate for Li-ion battery fires, which are usually left to burn out due to the self-sustaining nature of thermal runaway. This necessitates substantial volumes of water for cooling surrounding plant to avoid spread, with the result that toxic runoff must be managed, posing environmental challenges.
2. Cause investigation: Determining the cause of a BESS fire is complex. The intense heat of these fires often destroys physical evidence, leaving investigators to rely on pre-fire operational data and circumstantial evidence. This process can be prolonged and requires specialised knowledge of battery systems.
3. Interruption losses: The downtime caused by BESS fires can lead to significant financial losses, both in terms of delayed construction projects and operational shutdowns. Resuming operations often requires extensive remediation efforts and regulatory approvals.
4. Disposal of debris: Dealing with the aftermath of a Li-ion battery fire involves specialised protocols for handling and disposing of hazardous debris, which can further delay recovery efforts and increase costs.
Handling complex claims
Navigating these challenges requires a team with deep expertise in both insurance claims management and the intricate technologies involved in BESS. Sedgwick’s expert engineers stand out in this regard, equipped with the knowledge and experience to manage even the most complex claims arising from battery fires.
Learnings from the BESS fires
Recently, I was involved in the loss adjustment and management of a complex claim concerning a large BESS fire in Victoria during the commissioning phase of construction. The unit that ignited had been isolated from the supervisory control and monitoring system at the time, resulting in no records leading up to the fire or direct physical evidence. However, sufficient pre-loss SCADA data recorded during the initial charging of the unit provided enough evidence to determine the cause. The causation investigation took several months to complete, and further delays arose as local authorities needed to agree and provide sign-off before commissioning could resume.
Sedgwick’s expertise in handling complex claims
We have the ability to:
- Obtain and coordinate the best expertise available to determine the root cause of BESS fires.
- With a focus on minimising downtime, we facilitate efficient recovery processes that adhere to regulatory standards and industry best practices to mitigate operational disruption.
- Safeguard environmental stewardship by ensuring compliance with environmental regulations during debris disposal, mitigating risks and ensuring responsible cleanup efforts.
Moving forward
As the adoption of grid-scale BESS continues to grow globally, the need for specialised claims management expertise becomes paramount. Our proven track record in handling intricate claims underscores our ability to support insurers, stakeholders and affected parties through every stage of recovery. With our dedicated team of engineers and commitment to excellence, we ensure that no matter the complexity, BESS-related claims are managed with precision and efficiency.
Learn more > For more information on how we can support your insurance claims needs in the evolving landscape of energy storage, contact Guy Raynal at [email protected]
Tags: battery, Claims, commercial, Damage, electrical industry, Fire, Fire damage, Fire hazard, Fire prevention, lithium-ion battery, Property, Property damage, Restoring property