Maximizing Energy Storage  Profitability

Maximizing Energy Storage  Profitability

Getting on the right foot for BESS project success

By John Zetterstrom & Walker Wentzler

Energy storage is on the brink of yet another record-breaking year. Despite kinks in the supply chain from tariffs or interconnection issues, growth continues to escalate across the US energy storage market. After enjoying 100% growth between 2022 and 2023, analysts say the market could see 45% growth in 2024. Battery energy storage system (BESS) growth is outpacing wind and solar as utilities balance renewables with grid resiliency. For utilities planning BESS capacity additions, finding the right EPC and O&M partner is key to a successful project. Three considerations stand out as utilities explore their options:

I. RELIABILITY IN YOUR PARTNERS

Reliability extends well beyond components. Success requires getting the right stack of partners on your side to design, source, build, and maintain high- performing BESS. Energy storage contends with rapidly evolving technology, safety codes, permitting standards, and other risks. Partnering with a single- source, technology-agnostic partner ensures your team has visibility into — and can proactively address — changing dynamics and project pitfalls, including:

• Changing technology - Battery hardware components make up a large portion of system cost. With BESS technology seeing updates every 6 months, it’s critical to stay ahead of technology trends, understand product gaps and functionality, and optimize how to apply them.
• Accountability - Managing complex variables such as on-time delivery, gaps in product functionality, or scope issues between various providers creates complexity best handled by an experienced, singular partner.
• Regulatory understanding - Evolving safety standards result in noncompliance risks. Your EPC partner must demonstrate a deep knowledge of safety codes and an enthusiastic engagement with AHJs, early and often is always best.
• Procurement risks - Look for a partner that can leverage a deep supply network to ensure on-time delivery while maintaining flexibility in the face of logistical risks, as well as experience traversing the never-ending contemplation of tariff risk.

II. FUTURE-PROOFING AUGMENTATION

Batteries degrade over time. Acknowledging that the only constant is change itself makes planning for the future more art than science. SCADA integration, Energy density, and drastic storage medium technology shifts are all ripe for changes in the coming years. Future-proof your BESS augmentation to ensure a smooth transition to next-generation technology advantages and grid integration through:

• Designing with flexibility in mind.
• Steering clear of proprietary energy management systems designed for today’s technology.
• Keeping future augmentation in mind with your balance-of-plant design. Consider tactics like flexible tie-in points that allow for feeder level augmentation or expand your BESS with a medium-voltage design that won’t require a complete overwork of the existing substation.
• Ensuring adequate access for maintenance is often overlooked but is critical for augmentation and service.

III. BALANCING RISK, COST, AND REASON

Energy storage can pose risks and asset owners need measures to manage them. Some utilities may try to cover their BESS assets with a cookie-cutter approach that can either fall short or overspend needlessly.

With fire safety, for example — do sprinkler or suppression systems provide the most value in remote, uninhabited areas? Other design or product- level features provide more bang for your buck while also not introducing additional points of failure.

Future-proofing schemes, like large arrays of spare conduits, can be a waste of capital if not strategically placed.

Ultimately, what works for one site will not make sense for another. With in-house engineering capabilities, DEPCOM Power customizes each system, treating the design as if it will own the plant itself. We assess each unique project to deliver smart designs that are verified with results based on our extensive experience.

DEPCOM’S ONE-SOURCE PARTNERSHIP

Looking across the full lifecycle, DEPCOM delivers on every aspect – from expert design and engineering to strategic sourcing, construction rigor, and long-term service agreements. Our guiding focus is to maximize BESS profitability while carefully managing associated risks.

Our partnership approach goes well beyond what you may expect from an EPC. Few conduct thorough on- site visits to quality check overseas battery suppliers, or partner with BOP OEMs to customize electrical enclosures. Even fewer offer our unique bankability, a result of being backed by Koch Industries, the second largest privately held company in the country.

Whether you are a utility just entering the BESS ecosystem or an experienced asset owner, DEPCOM’s one-source partnership delivers a turnkey experience anchored in market-leading value and support.

About the Authors: John Zetterstrom serves as DEPCOM’s VP of Business Development working to provide quality EPC services to developers, IPPs, and utilities. As DEPCOM’s Energy Storage Capability Leader, Walker Wentzler oversees system engineering and design. DEPCOM Power has more than 5 GW of utility solar EPC experience and 2 GW of assets under development.