There’s also a growing need for on-site backup power, which battery storage, when paired with backup controls, can serve to provide. For example, Enel completed in 2022 a solar + storage microgrid at Alltown Fresh service station in Ayer, Massachusetts to support continuous power for service stations near evacuation routes across the state during emergencies. By integrating the system behind the same meter, on-site solar power will help charge electric vehicles (EVs). During a grid outage, the facility’s critical loads can continue to be powered.

Can I purchase a battery energy storage system and operate it myself?

Probably not. There are two main components to installing a battery energy storage system at your facility. The first is the technology piece, which includes both the hardware and optimization software. Similar to a GPS navigator guiding you home, the optimization software is what analyzes information in real-time to determine optimal operation of your system – like when and how much to charge and discharge at any point in time. 

The second is the operation of the hardware and optimization software to maximize the system’s value. You could capture some value by operating the system according to a set of simple rules. However, capturing the full value of a battery energy storage system requires tapping into multiple value streams, sometimes simultaneously, such as:

• Shaving demand peaks to generate energy bill savings
• Providing grid services like energy flexibility
• Applying for investment benefits (in some regions)

Capitalizing on all available value streams requires specific knowledge and expertise about using and constantly updating the optimization software, accessing wholesale energy markets, and maintaining real-time dynamic tariff libraries to unlock this full stack of value. Therefore, we recommend that organizations work with a trusted energy partner, like Enel, who can interface with the complex market dynamics and diverse set of stakeholders like grid operators, utilities, and government agencies. Enel has more than 20 years of experience in this department.

My organization doesn’t have upfront capital for battery storage – what are my options?

For certain projects, Enel can help finance for you. Enel makes this possible through flexible financing options, which are different variations on a benefit-share agreement. Under such an agreement, Enel puts up the upfront capital cost for the battery energy storage system – meaning that your organization can retain your capital on your core operations, while still benefiting from battery storage. Through the life of the contract, you split the benefits (energy bill savings and grid revenues) with Enel, according to a pre-determined split.

As a result, your organization shares in the value created by the battery energy storage system, with no downside risk. Enel recoups its original investment with its split of the generated value. This zero-capex financing model is only made possible through Enel’s ability to underwrite future (uncertain but predictable) value streams. At Enel, we are confident in our ability to deliver on the full value of battery storage – and you can rest assured that through our partnership, we have aligned incentives to drive optimal performance for the system.

How safe is lithium-ion battery storage?

Lithium-ion battery storage has a great safety record. Tesla, a top energy storage system integrator worldwide, with more than 15 GWh of installed global capacity (as of 2022), has had only three confirmed fires. None of these incidents were behind-the-meter systems that require more stringent safety standards. Based on investigation reports, these incidents were primarily caused by improper installation of the system, meaning that these risks can be entirely mitigated through proper installation and maintenance.

At Enel, we adhere to the strictest industry standards of safety:

• System design and full-scale fire testing (UL 9540 and 9540A)
• Installation standards (NFPA 855)

Beyond what industry standards require, we strive to work out of the box in the development and sharing of best practices, both internally and externally:

• Annual summit with key prime contractors to inform and share best practices
• ISO 45001 certification for our battery energy storage system research and development lab in Spokane, Washington
• Battery Management System (BMS) and internal sensors
• Environmental controls (e.g., storm water prevention plans, risk mitigation plans)
• Electrical protection (e.g., over current fusing and circuit breakers)
• Physical protection (e.g., bollards, fencing, locked enclosures, signage)

Our battery units are housed in containers, connected to the electrical grid, and safeguarded by advanced safety features, which are monitored 24/7 digitally and remotely for safe operation. Throughout the development and construction of our battery energy storage projects, we work closely with local fire departments to meet the safety requirements in our communities. Enel is a party to fire safety standards such as NFPA 855 (a member from Enel sits on the committee) and a member of the Energy Storage Association. We’ve also signed the Energy Storage Association’s Corporate Responsibility Pledge, further demonstrating our commitment to safety when deploying energy storage resources.

What happens when the batteries reach end of life? Are they recycled?

That is what we strive for. A battery energy storage system is composed of a container, batteries, a power conversion system, HVAC thermal management, fire suppression system, and other system controls and communications. At their end of life, systems are collected, sorted, and disassembled. While most of the system components can be recycled through direct processes (like for scrap metal and electronics), the battery modules require special treatment for the processing and recycling of lithium-ion batteries.

Depending on the chemistries used in the lithium-ion batteries, there are different processes for extracting and reusing the raw materials. At a high level, waste batteries are mechanically crushed, dried, and sieved into what is referred to as a “black mass.” Precious metals are then extracted from the black mass through pyrometallurgy and hydrometallurgy: 

• Pyrometallurgy – heat-based extraction and purification, in which the separation of metals is achieved through smelting in furnaces at temperatures between 1,200°C and 1,600°C. Through smelting, precious metals like cobalt and nickel can be recycled. Lithium and manganese are not recovered, because it is not economically feasible. 
• Hydrometallurgy – a water-based process, in which the metals are recovered and dissolved as salt in successive water-based concentration and purification steps.

In evaluating these processes, it’s important to consider their environmental and resource impacts. Many studies have found that hydrometallurgy is a more suitable recycling method than pyrometallurgy, as it allows for a higher recovery of precious metals with lower energy consumption, greenhouse gas emissions, minimal air emissions, and purification. However, this may change as new technologies and improvements become economically viable.

Looking ahead, Enel is committed to best practices for sustainability and circularity. At the system’s end of life, we will work with our suppliers to pursue the most sustainable recycling or repurposing applications. 

What is the Inflation Reduction Act tax credit for battery storage?

A long-awaited win in the Inflation Reduction Act of 2022 is the new eligibility of standalone energy storage for the 30% full credit investment tax credit (ITC). Previously, standalone energy storage systems had to be attached to a solar PV or wind system to be eligible for the upfront investment incentives, and they had to charge from that system 75% of the time. Now that standalone energy storage qualifies for the ITC, these requirements are no longer necessary to qualify for the incentive. 

This gives energy storage projects, like lithium-ion batteries, more siting and operational flexibility – as well as the ability to capture additional value streams like energy arbitrage, ancillary services, grid stability services, and more. Beyond the 30% full credit, there are opportunities to layer on bonus tax credits for meeting certain requirements on domestic content, energy communities, and low-income communities. Learn more about how to make the most of the Inflation Reduction Act tax credits.