US battery storage systems are evolving into lower fire risk technology: analyst

Safety concerns are not expected to have a significant impact on US battery energy storage system capacity additions in the near future, an S&P Global Commodity Insights analyst said after one of the largest BESS facilities caught fire in California.

Battery storage capacity saw significant growth in the US in 2024, with total capacity jumping 81% year on year in the third quarter of 2024 to 26 GW. While incidents like the Jan. 16 Moss Landing firespark concern, the market has evolved significantly in recent years, according to Henrique Ribeiro, principal analyst of batteries and energy storage at Commodity Insights.

"Incidents with battery storage are rare, but no system is 100% failproof," Ribeiro said.

BESS facilities like Vistra Energy's Moss Landing typically rely on lithium-ion battery cells, which have flammable electrolytes. Physical abuse, inappropriate use or cell defects can lead to fires.

The Moss Landing fire continued to at least Jan. 22 when Vistra reported a "limited amount of smoldering" at the location. Vistra previously said the cause of the fire has not been determined. The company did not provide capacity outage figures by press time.

The Moss Landing facility also caught fire back in 2021 and 2022. In other cases, one Warwick, New York, storage facility from Convergent Energy caught fire in June 2023. A lithium-based storage facility in Surprise, Arizona, exploded back in 2019.

Opposition in local communities to new BESS projects "is not new and could grow further" after the Moss Landing incident, Ribeiro said.

Democratic Assembly member Dawn Addis of California wrote a letter to the state's public utilities commission on Jan. 22 calling for an independent investigation into the Moss Landing fire. Addis introduced a bill that would deny pending applications for new BESS and re-examine the safety qualifications for this type of project. The bill also proposes to prohibit new BESS from being constructed within 3,200 feet of schools, hospitals and housing.

"The Moss Landing facility has represented a pivotal piece of our state's energy future, however this disastrous fire has undermined the public's trust in utility scale lithium-ion battery energy storage systems," Addis said in the letter to the California Public Utilities Commission.

However, the market has "evolved significantly" since the Moss Landing installation was concluded in 2020, Ribeiro said. The facility uses lithium nickel manganese cobalt oxides, or NCM, cells indoors, but since then it became standard to use lithium iron phosphate cells, or LFP, outdoors, he said. LFP operate at lower temperatures, and the outdoor installation also helps reduce risk and minimize impacts of a fire.

Liquid cooling is becoming increasingly popular in BESS launches, and AI is being deployed to help detect risks of thermal runaway, Ribeiro added.

Lithium prices remain under pressure going into 2025 after a year of continued decline in the prices of lithium carbonate and lithium hydroxide. Lithium carbonate prices in the US have dropped 27% to date from $15,400/mt when Platts, part of S&P Global Commodity Insights, began assessments on Jan. 31, 2024.

However, supply constraints are on the horizon for lithium, with the International Energy Agency saying in December it expects a supply deficit by 2035.

In preparation for future bottlenecks, alternative BESS tech that avoids lithium and other critical minerals are under development, Ribeiro said.

However, "the vast majority of these technologies is still many years away from commercialization," he said, with sodium-ion technology being an exception while "still lacking the required scale in order to become cost competitive."