22nd April 2022

Battery Energy Storage Systems for a Sustainable Future

Battery Energy Storage System

Every year on April 22, the world celebrates Earth Day, the modern environmental movement that came to life in 1970. Since then, we’ve witnessed a half-century of mobilization for action to combat climate change. 

According to the European Commission, carbon emissions are one of the leading causes of climate change and one of the key levers to combat climate change is electrification: transitioning from burning fossil fuels to using electricity fueled by alternative energy sources such as geothermal, hydro, nuclear, solar, and wind.

As we move towards a sustainable future, the battery energy storage market is gaining momentum and popularity around the globe. The lithium-ion battery type attracts the highest demand among all the technologies due to its chemistry and low cost. 

But first, let’s understand the issues that come with batteries

There are several key issues associated with electrification and batteries specifically. Unless we deliberately intervene and take precautionary measures, the disadvantages of batteries could outweigh the advantages. Let’s take a look at some of the issues that arise with batteries.

A mining site at South Kalimantan, Indonesia
A mining site at South Kalimantan, Indonesia

Batteries, a necessary evil

As much as we need batteries, the extraction of their raw materials comes at a cost. About two-thirds of the world’s cobalt, for example, comes from the Democratic Republic of the Congo, and about 20% is estimated to come from sources that can be linked to unsafe working conditions and child labor. Thus, there’s a significant social and environmental cost. 

Battery production & carbon footprint

The production of the upstream battery materials generally comprises the largest share of the emissions, which are identified as 59 kilograms (kg) of CO2 equivalent (eq) per kilowatt-hour (kWh) of battery capacity. (Source: Forbes)

Recycling the batteries – are we there yet?

We’ve come a long way when it comes to batteries. Today, it is technically possible to recycle lithium batteries and give them a second life. However, it is only implemented on an anecdotal basis. Lithium batteries are not – or hardly ever – recycled. 

Batteries & economies

Batteries are one of the most expensive components of any asset. However, a lack of coordination and effective financing schemes across the value chain appears to be hampering the deployment of batteries to bring affordable, clean energy to low- and middle-income countries.

Battery Energy Storage Systems (BESS) and their Applications

According to the National Grid, battery storage, or Battery Energy Storage Systems (BESS), are devices that enable energy from renewables, like solar and wind, to be stored and released when customers need power the most.

The Battery Energy Storage Systems (BESS) applications range from FTM (front-of-the-meter) to BTM (behind-the-meter). Let’s take a deeper look into the applications of ESS in the electricity sector. 

Battery Energy Storage System
Renewable energy generating assets

FTM (Front-of-the-meter)

According to Boston Solar,  energy generation and storage systems that feed the grid, as well as the power lines used to transport that energy, are considered to be front-of-meter because the energy they provide must pass through a meter before it can be used—they are positioned in front of the meter.

Some of the FTM BESS applications are:

Energy Arbitrage

Energy arbitrage based on ESS consists mainly of the purchase of energy during periods in which the price is low (charging the ESS), to later sell that energy when the price is higher (discharging the ESS). According to Markus Dickerson, energy arbitrage is simply the Robin Hood of today’s modern world, taking cheap energy and using it during expensive times. Owners and operators (O&O) of BESS determine an arbitrage strategy that maximizes their economic benefits when participating in energy markets 

Experts believe that arbitrage as a standalone energy storage application is not very profitable but when it is combined with other applications, it can turn out to be valuable. 

Ancillary services

Reserve Capacity (Spin/Non-Spin)

As the name suggests, reserve capacity refers to keeping the power on even if a generator goes offline. This is a crucial requirement for electrical utilities. Reserve capacity, also called reserve minutes, is the number of minutes a fully charged battery can sustain a designated constant load. 

Usually all assets in the system run with a minor percentage of reserve capacity that adds inefficiencies, extra costs, and waste. Fast-acting energy storage systems such as capacitors, flywheels, and batteries can be used instead for this application, allowing generators to run closer to their rated value. 

Further, reserve capacity is split into:

  • Spinning reserve (can respond within 10 seconds)
  • Supplemental reserve (can respond within 10 minutes)
  • Backup supply (can respond within one hour)

Black Start

Black start resources are used when the grid experiences a blackout and must be restarted from scratch in case of a blackout. According to nrel.gov, this entails isolated power stations being started individually and gradually reconnected to one another to form an interconnected system again. Energy storage systems are ideally suited for black start applications because they can be run in standby mode and independently to re-energize the other grid systems. A good example of a black start is – a diesel generator that may be started with a local battery.

Other ancillary services include Voltage Support, Frequency Regulation, Resource Adequacy, etc. 

BTM (Behind-the-meter)

According to OSTI.GOV, behind-the-meter refers to the systems that are located at the customers’ sites (homes, commercial and industrial facilities). BTM systems are usually owned by customers and intended for customers’ use.

Some of the BTM BESS applications are:

Uninterrupted Power Supply (UPS)

An energy storage system can store energy that can be used when the need arises. During a power outage, this stored energy can be used to supply an uninterrupted power supply (UPS). UPS is especially useful when there are natural disasters such as the recent California wildfires which saw widespread grid power outages. Intelligently deployed energy storage systems are essential to the continued operation of hospitals and emergency services.

Increased self-consumption

The reliance on traditional energy storage systems can be reduced by installing intelligent energy storage systems at the end-users place of consumption. This can be done by stockpiling the excess solar energy generated throughout the day. In simple terms, it means producing your own cheaper solar power rather than purchasing it from an energy company. 

Increasing self-consumption is especially valuable in areas where there is limited grid connectivity. 

Demand Charge Reduction

Battery Energy Storage systems can dramatically reduce the electrical demand charges. C&I (consumer and industrial) consumers bear electricity costs not only based on the amount of energy consumed, but also on their maximum power draw. In some cases, this “Demand Charge” can make up close to 50% of their total power costs. By reducing the maximum power drawn from the grid, significant costs savings are possible. The energy is stored during low-demand times to be released (and reduce power drawn from the grid) when demand is high. Demand charge management and reduction is a significant value-generator for the C&I sector.

Proactively manage your assets in real-time and predict anomalies in advance

Altergo is an overarching platform built for ESS owners to overlook and have a sanity check on their System integrators (SI), Operations & Maintenance (O&M), and SD service providers by having real-time insights into their ESS assets. With Altergo’s predictive maintenance, you can detect abnormal situations in your operation and potential problems with your assets and their components using data analysis techniques so you can address them before they go wrong. In practice, this provides for the most minor possible maintenance frequency to avoid unexpected reactive repairs while avoiding scheduled maintenance expenses.

Altergo anticipates issues by studying historical and real-time data from many aspects of your operations and sensors.

Altergo Impacts:

  • Identifying and fixing potential problems makes your Storage system more reliable and trustworthy.
  • With a better understanding of the condition of batteries, there are fewer unscheduled outages.
  • Through continuous system optimization, battery performance improves, and battery life increases.

Learn more: Improving Battery Safety Using Predictive Maintenance

Altergo helps you to find out how to optimize the second life of your battery packs

Re-purposed EV batteries can be used in off-grid, residential applications, and distribution grid markets that help lower environmental impacts and improve the security of supply. These batteries improve material efficiency and add tremendous value to the automotive and energy sectors and society.

By 2025, second-life batteries maybe 30 to 70 percent less expensive than new ones in these applications, tying up significantly less capital per cycle. (Source: McKinsey.com)

Some of the key benefits of re-purposing batteries are:

  • High safety level
  • Reduced resource consumption
  • Affordable
  • Scalable – multiple uses
  • Reliable performance
  • Sustainability 

Altergo provides an automated second life pathway for end-of-life assets. Altergo can provide the best alternative use case for the asset based on how a battery rack has been used and stored. Altergo helps decrease the total cost of ownership (TCO) and, most importantly, allows dilution of the carbon footprint beyond its original purpose.

Learn more: An Electric Future: Second life for EV Batteries

Simulate the lifecycle of your assets and operational impacts on degradation and how to optimize it for extended life efficiently

Due to the intermittent nature of renewable energy sources, devices capable of storing electrical energy are required to increase their reliability. The increased penetration rate of the battery system requires accurate modeling to optimize performance. Thus, battery-pack modeling is essential to improve the understanding of large battery energy storage systems, whether for transportation or grid storage.

The battery pack modeling is a highly complex task as packs could be composed of thousands of cells that are not identical and will not perform homogeneously. 

Altergo’s simulation models will  help you understand: 

  • The impact of cell-to-cell variations
  • Inhomogeneous degradation
  • SOC and SOH tracking
  • Cell balancing 
  • Performance forecast
  • Predict system-level behavior


Altergo is a Modern Asset Management Platform for Energy that empowers new energy companies to create an accurate Digital Twin, a virtual replica of physical components, assets and their contracts. By unifying the internal and external data and leveraging advanced data science, Altergo significantly impacts a business’ ROI and enables companies to make data-driven decisions that improves asset life and performance.

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