
Page | 001 PROPERTY MATTERS Content What are large battery storage systems? 1 Loss events 2 Loss causes 3 Fire protection 3 Checklist for underwriters 5 Conclusion 6 About This Newsletter Created for our clients, our Property Matters publication provides an in-depth look at timely and important topics affecting commercial and personal lines of property insurance. OCTOBER 2021 Large-Battery Storage Facilities – Understanding and Underwriting the Risks by Leo Ronken, Gen Re, Cologne As efforts to decarbonize the global economy gather pace, new large-battery storage facilities are being built around the world at lightning speed. Intended to support the expansion of renewable energies and compensate for power fluctuations in energy grids, the U.S. Department of Energy has recorded more than 1,600 storage facility projects worldwide, including nearly 600 lithium battery facilities.1 In Australia, approximately 56 facilities have been constructed or are in planning stages, each with a capacity of more than 10 MW and a storage capacity of more than 10 MWh.2 However, with the technology involved still in its relative infancy, little information is available on which to base risk assessments from an insurance perspective. This article aims to provide a useful overview of losses to date, important fire protection measures, and underwriting guidelines for Property underwriters tasked with evaluating the exposure of these facilities. What are large battery storage systems? Strictly speaking, the correct term for these facilities is “large-scale accumulator storage systems”. They consist of one or more modules in which accumulators are combined into groups. The individual batteries usually fill floor-to-ceiling racks and the overall storage capacity is usually only limited by the space available to accommodate the storage modules. Such systems have storage capacities upwards of approximately 50 kWh. They are constructed as standalone objects, either indoors or outdoors and contain all the components necessary for their operation (e.g. battery systems, power electronics, energy management, extinguishing system, air conditioning, containers, etc.). A Berkshire Hathaway Company
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