FM Global conducts fire research on a lithium-ion battery storage system at its research center
Source: © 2019 FM Global. Reprinted with permission. All rights reserved.
When a 2-MW battery array in Surprise, Ariz. caught fire and subsequently exploded on April 19, it highlighted a troubling reality for the nascent energy storage industry: the sector's momentum, marked by record numbers of deployments, falling prices and expanding state mandates and incentives, could be derailed by a series of well-publicized and, in some cases, little-known incidents involving runaway fires.
As projects proliferate, driven by demand for solutions to integrate intermittent renewables into grid operations and to offset the need for fossil fuels, the industry is being forced to acknowledge that fires, most of them linked to lithium-ion batteries, are occurring with troubling frequency. Incidents over the past year include the blaze in Arizona along with more than 20 energy storage systems that have reportedly caught fire in South Korea, putting the world's hottest energy storage market on ice amid a safety probe. Fires linked to lithium-ion batteries also have hit Europe and Australia.
The events, particularly in South Korea, have begun to take a toll on energy storage companies. Quarterly financial results of two of the world's biggest producers of lithium-ion batteries, LG Chem Ltd. and Samsung SDI Co. Ltd., both South Korea-based, have suffered, adding urgency to the development of enhanced safety standards.
Forced to suspend battery storage installations in South Korea in January, LG Chem's energy solutions business lost 148 billion South Korean won, or roughly $124 million, in the first quarter of 2019, following seven straight quarters of profits. The company does not expect growth to resume in South Korea until the second half of 2019, after the country's Ministry of Trade, Industry and Energy completes an investigation into the causes of the fires, an audit of installed systems and revision of safety standards.
As part of that process, "400-or-so" projects remained offline as of late April, LG Chem CFO Ho-Young (James) Jeong said in a conference call with analysts. After initially forecasting about 80% growth in its energy storage division this year, "it would be challenging to reach around 50% growth," the CFO said.
Samsung SDI's business was also down in the first quarter: net profits fell to 55 billion South Korean won from nearly three times that a year ago, the company reported April 30.
"Because of the fire issue, the domestic [energy storage] market is struggling," Young-No Kwon, an executive vice president at Samsung SDI, said on an earnings call.
'Something is going to happen'
In the United States, an investigation continues into the April 19 fire and explosion at Arizona Public Service Co.'s 2-MW Surprise Battery Storage System that injured a team of firefighters and caused two other plants to temporarily shut down as a precaution. It was the Pinnacle West Capital Corp. subsidiary's second significant blaze at a lithium-ion battery installation after a pilot project was destroyed in a 2012 fire.
Analysis of the 2012 incident revealed critical system design flaws, including a lack of proper ventilation and an inadequate monitoring system, an APS official said in an email. Those shortcomings were supposedly corrected in subsequent installations, but that did not prevent the latest disaster.
The probe into the April blaze looms large for APS, which plans to add at least 850 MW of batteries by 2025, including at existing and new solar farms, and the U.S. storage industry as a whole, given the current dominance of lithium-ion batteries for new projects.
Arizona Public Service's 2-MW battery storage project in Surprise,
Source: Arizona Public Service Co.
Analysts at IHS Markit expect grid-connected storage installations in the U.S. to nearly double to 712 MW in 2019, making the U.S. the world's largest battery storage market, as South Korea struggles to overcome its market collapse in the first half of 2019. More than 2,000 MW of energy storage systems will be coupled with solar arrays in the United States between 2019 and 2023, IHS forecasts.
Amid this surge, product safety and fire experts are stepping up research to understand, prevent and respond to fires at energy storage installations, building partly on research into incidents involving electric vehicles, airplanes and consumer electronics.
"In general, it's a very safe technology," Ken Boyce, a principal engineer at product safety certification, testing and advisory firm UL LLC, said in an interview. Lithium-ion battery cells fail at a rate of only around one in every 12 million, he said. Unfortunately, with billions of cells now being installed each year, that means "something is going to happen," he said.
UL's research into "the physics of failure" have revealed repeated problems with the flammable electrolyte in lithium-ion batteries that can cause "thermal runaway," according to Boyce, when an overheated cell turns into a self-perpetuating cascade. The problem can be triggered by internal defects or external stress factors, such as temperature, that cause one compromised cell to ignite adjacent ones, risking a large-scale fire.
Boyce calls thermal runaway his top safety concern related to lithium-ion batteries. It can also affect other battery types.
UL is among a host of energy storage stakeholders working on enhanced safety practices through a new initiative launched in Phoenix in April, just days before the APS fire in Surprise. Technology and fire safety experts seek to incorporate lessons learned from such failures into updated codes, standards and products.
Mutual insurance provider FM Global Inc. has conducted fire experiments at its research campus in Rhode Island, working with the National Fire Protection Association, or NFPA, to create guidelines for managing risks associated with warehouse storage of lithium-ion batteries used in consumer electronics. FM Global now is bringing its expertise to understanding and minimizing fires involving grid-connected lithium-ion battery storage systems. The work is helping to inform the NFPA's 2020 update of a code for energy storage installations.
"There is a surge happening and we have to be prepared," said Christian Dubay, a vice president and chief engineer at the NFPA. In addition to developing codes and standards, the non-profit organization has created training programs to help first responders react appropriately to fires involving lithium-ion batteries, which can expose people to burns, electrical shocks and toxic substances.
With a rising number of incidents involving lithium-ion batteries, developers of alternative energy storage technologies are making a case for what they say are more benign chemistries. For example, Lockheed Martin Corp.'s growing energy storage business, which currently integrates systems using lithium-ion batteries from external suppliers, is preparing to launch its own flow battery. Using external tanks and an aqueous electrolyte solution, the technology is safe and stable, according to Richard Brody, director of sales and marketing for energy storage at Lockheed Martin.
"Unlike lithium ion, we don't have a flammable electrolyte," he said.
"Fires are bad for everybody, but people like the fact that our battery is a fire quencher not a fire starter," said Hugh McDermott, senior vice president of business development and sales for storage startup ESS Inc., a flow battery company backed by German chemicals giant BASF AG.
Some lithium-ion battery alternatives, however, have also gone up in flames, cautioned UL's Boyce, noting a 2012 blaze in Hawaii that involved advanced lead-acid batteries installed at a wind farm.
Still, lithium-ion has fueled the battery-storage revolution and continues to be, by far, the most commonly deployed technology. And industry officials continue to lose sleep over possible future fires.
"Lithium-ion batteries can burn," said Ben Ditch, a fire researcher at FM Global. "The fact is the hazard exists. ... It is something a lot of us have been worried about for some time."
As of May 22, US$1 was equivalent to 1,190.44 South Korean won.