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Small inaccuracies in battery state-of-charge estimates can quickly add up to financial losses, according to a new white paper from Powin and Tierra Climate. Small miscalculations in a batterys state of charge can add up to real financial losses, according to a new white paper from Powin and Tierra Climate that examines lithium iron phosphate (LFP) battery systems operating on ERCOT, the Texas power grid. The report found that for every 1% increase in state-of-charge estimation error, usable battery capacity decreased by 1.2%. Operators using market-based strategies with a high degree of arbitrage can lose nearly 1% of their total battery revenue for every 1% increase in error. “When you try to utilize the full range of the battery, thats where problems can arise,” said Michael Bennett, chief transformation officer at Powin, in a conversation with pv magazine . Therefore, strategies focused on ancillary services experience smaller (but still significant) revenue losses of 0.20% for every 1% error. Such high sensitivity to inaccurate state-of-charge measurements impacts the financing, sizing, and long-term performance of battery projects. Bennett explained that LFP batteries have a unique characteristic that makes their state-of-charge measurement difficult: a flat voltage curve across most of their range. This flat curve makes it difficult for traditional voltage-based methods to estimate charge accurately. Therefore, energy arbitrage strategies are more vulnerable to revenue losses, as they rely on full charge-discharge cycles and narrow margins to achieve revenue targets. The report also notes that overestimating the state of charge is more financially damaging than underestimating it, especially for batteries that provide auxiliary services. Bennett said overcommitting an asset can lead to real-time market penalties or forced purchases of replacement power if the bank cant pay. “If you tell the market operator that youll be able to supply a certain amount of energy… and in the end, you cant do it,” he explained, “you often have to buy that energy on the market to meet that obligation and sometimes pay penalties.” “There are financial consequences to saying you can do something when you cant,” he added. Understating, on the other hand, gives operators the flexibility to offer additional capacity if conditions allow. “You allow yourself a little leeway,” Bennett said. As battery energy storage system projects continue to scale and participate in more dynamic market conditions, improving state-of-charge accuracy is essential to maximizing value. The report recommended that operators adopt cell-level data monitoring and invest in more advanced state-of-charge estimation algorithms. Like health status, this should be monitored proactively. “You need access to the data and, at times, extensive third-party verification or backups,” Bennett said. Regulators could also play a role in standardizing expectations for state-of-charge accuracy. “We believe we will begin to see some unification across the markets so that everyone is on a level playing field,” Bennett said. Without common definitions or metrics for reporting state-of-charge errors, he added, project comparisons, metric reporting, and performance guarantees will remain inconsistent. For developers, Bennett said better state-of-charge estimation could reduce the need to oversize systems, which would lower initial costs while preserving operational flexibility. “People are starting to understand this idea,” he added. |
