Battery storage definitions: a glossary of BESS terminology

Battery basics

BESS - Battery Energy Storage System

Rechargeable battery that stores power provided from various energy sources for later use. The system can be discharged as needed for grid support and backup power.

Grid/power grid/electricity grid

Network of power lines for the transmission and distribution of energy over a geographical area.

Battery specs

Capacity retention

Expressed in %, this metric measures how efficient a battery is in holding a charge after repeated (dis)charge cycles.

Coloumb/Faraday efficiency

Ratio of the total charge drawn from a battery to the total charge supplied to a battery over a complete cycle.

C-rate - charge/discharge rate

Rate at which a battery is charged or discharged, relative to its total capacity. A battery's C-rate indicates how quickly it can supply or absorb energy. Expressed as a unitless value, it typically comes in C/x or xC format, with x signalling how much capacity can be (dis)charged per hour.

Here are some examples:

• C-rate of 1C for a 1 MWh battery: 
  the asset (dis)charges at a rate of 1 MWh per hour -> it takes 1 hour to (dis)charge fully 
  
  
• C-rate of 0.5C for a 1 MWh battery: 
  the asset (dis)charges at a rate of 0.5 MWh per hour -> it takes 2 hours to (dis)charge fully 
  
  
• C-rate of 4C for a 1 MWh battery: 
  the asset (dis)charges at a rate of 4 MWh per hour -> it takes 15 minutes to (dis)charge fully

Cycle

The process of charging and discharging a battery energy storage system. One cycle is completed when the asset is charged to the allowed maximum and discharged to the allowed minimum. A battery's lifespan is determined by the number of cycles it can undergo while upholding satisfactory performance standards. The total lifetime is typically expressed in Full Cycle Equivalents (FCE).

DC & AC - direct/alternating current

The two types of electrical current. DC can be converted to AC and vice versa. What makes the two kinds different from one another is the flow of the electrical charge.

DC (one-directional) is used for:

• batteries in electronic devices such as smartphones and laptops
• special applications like custom motors
• electronic circuits and components such as transistors and microchips

AC (bi-directional) is used for:

• power lines supplying households, businesses and industries
• long-distance transmissions
• machines of any size

Battery systems can be both AC- and DC-coupled.

Degradation

The gradual decline of battery capacity and performance over time. Charging and discharging cycles prompt chemical reactions in the battery material, causing changes in the asset’s structure that affect storage capabilities and energy deliverability. Other contributing factors include operating temperature and (dis)charging rates. Our new optimization considers cell-specific degradation information for maximum revenue with minimum degradation. 

DoD - Depth of Discharge

Percentage of energy discharged from a battery’s total capacity. To maintain battery health, the DoD should not be higher than 90%.

Energy rating

The amount of energy a battery can store and release, typically measured in kWh or MWh. The duration of supply depends on the energy consumption of the device the battery powers.

FCE - Full Cycle Equivalent

Sum of (dis)charge events that amount to one full charge (from 0-100%) and one full discharge (from 100-0%) of a BESS. In other words, partial cycles can be added up to reach one or more FCEs.

Inverter

The BESS component that converts direct current (DC) output into alternating current (AC) electricity to make the power suitable for the grid and electrical devices.

Maximum charge/discharge

Mechanism to maximize battery life by not discharging below 10% and not charging above 90%.

Ramp rate

Indicates how fast an asset can change its electrical output. As batteries are highly rapid in their reactivity, TSO and DSOs are often limiting this speed to keep the grid stable and unaffacted by sudden drops or increases in output.

Ramp rate control

The ability to adapt the speed at which a battery changes its power output. As the grid is very sensitive to sudden changes in supply, ramp rate control helps maintain stability in a smooth and gradual manner.

RTE - Round Trip Efficiency

Percentage of energy deliverd by the battery when discharging compared to the energy supplied to the battery when charging.

SoC - State of Charge

The capacity a battery has available for use. SoC indicates how full or empty the battery is.

SoH - State of Health

The battery’s ability to retain capacity compared to its rated value before use. SoH signals how much a battery degrades over time.

Throughput

The total amount of energy a battery can store and provide throughout a defined period of time (e.g. daily, yearly, lifespan), typically expressed in kilowatt-hours (kWh) or megawatt-hours (MWh). In other words, throughput indicates how many (dis)charging cycles a battery can undergo without major loss of performance.

Warranty terms

Manufacturer conditions and compliance policies governing the performance, capacity, material and operational limitations of a battery. Examples of typical BESS warranty terms include:

Battery components

Cell

Electrochemical device that converts chemical into electrical energy. A cell is the most basic form a battery can take. It consists of a positive (cathode) and a negative (anode) electrode. Their external connection points (terminals) are separated by an electrolyte causing ions and electrons to move between the terminals (from + to - when discharging and from - to + when charging). This generates current and voltage, which allows the asset to operate.

HVAC (heating, ventilation, air conditioning) concept

Design to regulate the temperature and air quality inside a battery. A proper cooling system must be in place to keep the asset from overheating.

Module

Cluster of individual cells connected in a specific configuration to achieve the desired performance characteristics.

PCS - Power Conversion System

Technical component that ensures the flow of energy between a BESS and connected loads such as the power grid.

Rack

Physical structure that contains and organizes the modules and cells within a battery system.

Switchgear

Equipment for managing and protecting the inner-system electrical power flow.

Battery control & units

API - Application Programming Interface

Intersystem communication protocol that analyses and coordinates BESS operation with respect to involved third-party applications.

BMS - Battery Management System

Control hub that manages battery properties within the BESS. It

• monitors SoC & SoH
• balances the energy supply of individual cells and modules, adjusting charging rates if necessary
• optimizes charging processes to prevent battery damage due to over- or undercharging
• surveils battery temperature to take appropriate actions when there is a chance of overheating
• detects system errors and provides diagnostic information for maintenance and troubleshooting
• logs relevant data for performance analysis, optimization and predictive maintenance
• implements safety measures (e.g. cell disconnection or system shutdown) to counteract risks like thermal runaway, which can cause explosions
• integrates communication protocols for status reports and command transmissions between different management and grid systems

EMS - Energy Management System

Mechanism to schedule and control BESS application and activity.

kW - kilowatt (1000 watts) · MW - megawatt (1 million watts) · GW - gigawatt (1 billion watts)

Units of power measuring at which rate energy is being produced or consumed. The kW/MW/GW specification indicates how much power a battery can absorb or provide.

kWh - kilowatt-hour · MWh - megawatt-hour · GWh - gigawatt-hour

Units of power measuring at which rate energy is being produced or consumed per hour. The kWh/MWh/GWh specification indicates how much power a battery can absorb or provide in a 1-hour time window.

Utility meter

Device that measures the amount of utilities - such as eletricity or water - consumed by an industrial, residential or commercial user. Meter and utility meter are often used interchangeably.

Battery use cases

Ancillary services

Support functions provided to the electricity grid to ensure stability, reliable power supply and renewable integration. These services include:

• frequency containment
• frequency restoration
• replacement reserves
• voltage and reactive power control
• congestion management
• redispatch

Black start capability

Ability to reactivate (parts of) a power system like the grid in the event of a blackout.

Demand response

Grid support with consumption units such as batteries or washing machines. It involves the adjusting of energy consumption in response to a signal from the TSO. For example, several aggregated shopping malls can react to a prompt for grid relief by temporarily turning off heavy power-consuming machines.

Frequency regulation

Automated adjustment of BESS power output to keep grid frequency at a consistent 50 Hz.

Load shifting

Coordinating a battery’s energy usage patterns with low price rates. This means moving BESS charging times to non-peak hours to save money while consumption stays the same. For instance, 3pm likely offers better prices than 9am as morning household demand will have died down considerably by then. Conversely, the battery is discharged during hours with high prices to maximize earnings.

Peak shaving

Reducing BESS energy use during expensive consumption windows. Peak shaving is about consuming less to save costs. At the same time, batteries can also be employed to compensate for peak shaving use cases of other assets.

Redispatch

Amendment to the nominated output schedule of a BESS or power plant by the TSO.

Voltage and reactive power control

Keeping the pressure that pushes electricity steady and securing the “behind-the-scenes” energy needed to perform this task.

Battery setup & technology

Battery pooling

Aggregation of multiple single battery systems into one large virtual unit. It can be thought of as VPP consisting solely of batteries.

BTM - behind-the-meter

Energy system on the end consumer’s side of the utility meter. BTM refers to all residential power assets, from solar panels on the roof of a family home to a Tesla Powerwall in the basement.

C&I (commercial & industrial) battery

BESS designed for commercial use. Such an asset is meant to support a core activity of an industrial setting like a factory, school, office, hospital or data center.

Co-located battery

A battery storage facility installed alongside a second energy producing unit, especially solar generation. Please note that the term ‘co-located’ should be treated as a developing concept as it is currently a subject of disagreement and controversy.

DER - distributed energy resources

Individual small-scale energy assets and technologies that can be aggregated within a localized area for broad application (VPP). Examples include solar panels, wind turbines, CHPs (combined heat and power) and storage systems.

Grid-scale battery

A large BESS with direct connection to the power grid.

FTM - front-of-the-meter

Energy system on the utility or grid side of the meter, typically power plants, wind farms or large-scale battery storage. FTM battery activities are separately metered, whereas BTM logs only total consumption.

LDES - long-duration energy storage

BESS designed to provide energy for extended periods of time, typically hours or days, compared to the shorter, more traditional durations.

Overdimensioned battery

A commercial battery unit with more capacity than what is needed for the intended use or purpose in an industrial setting. The leftover capacity is ideally suited for revenue diversification in the markets.

Renewable integration

Share of power in the grid that comes from renewable sources. The advancement of the energy transition depends on a sustainable, flexible electricity system, and batteries are among the main facilitators for it.

Standalone battery

Independent containerized storage units, usually charged through the grid during off-peak times but not connected to other types of generation such as solar or wind.

V2G - vehicle-to-grid

Electric vehicle batteries utilized in a streamlined (dis)charging infrastructure to create a mobile storage network with direct connection to the power grid.

VPP - virtual power plant

Aggregation of several independent energy assets such as BESS, solar and wind into one virtual unit.

Battery markets, trading & optimization

aFRR - Automated Frequency Restoration Reserve

aFRR is the secondary reserve market. It automatically reinstates the balance between electricity supply and demand following a grid disturbance. More about the aFRR market here. 

Benchmarking

Comparing costs, performance and other relevant metrics of energy assets, companies or technologies to identify opportunities for optimization.

Day-ahead auction

Marketplace where battery capacity can be traded for the next day.

DSO - Distribution System Operator

Entity responsible for reliably transmitting energy to end consumers. While TSOs work long-distance and large-scale, DSOs are more localized and low-voltage.

FCR - Frequency Containment Reserve

FCR is the primary reserve market to address grid fluctuations. It helps maintain balance between supply and demand. More about FCR and the European power market here. 

Forecasting

The process of predicting future pricing, demand and supply in the energy market based on relevant data to develop the best trading strategy for BESS commercialization.

Intraday auction

Marketplace where battery capacity can be traded for the same day.

mFRR - Manual Frequency Restoration Reserve

On-demand emergency supply service the TSO can activate to reinstate the balance between electricity supply and demand following a grid disturbance. It serves as the tertiary reserve market. More about mFRR and the European power market here. 

Rebalancing factor

Ratio of traded and physically dispatched battery capacity. Let’s simplify this and say you sell energy for 100€, and then the price drops to 60€ - in this scenario, it would be more cost-effective to buy the amount you sold in the market instead of producing it for dispatch.

Rebalancing mechanism

Market that balances electricity supply and demand for each 30-minute trading period.

TSO - Transmission System Operator

Entity responsible for reliably transmitting energy in bulk from power plants to distributors and users through the electrical grid. The TSO is responsible for keeping the grid stable at a frequency of 50 Hz at all times. For this purpose, ancillary services act in a supportive function to WS.

WS - wholesale

Marketplace where battery capacity can be traded in bulk quantities for different time periods and various applications. WS branches include day-ahead and intraday auctions, which can be stacked with other revenue streams such as ancillary services to ensure diversification. More about the wholesale market and the European power market structure here.

Financial

Bankability

The ability to make money. When a BESS project meets the requirements to be granted financing, it is considered ‘bankable’.

Battery floor price

Guaranteed revenue minimum for a commodity (e.g. electricity). Battery operators with a floor price in their trading agreement are guaranteed a minimum amount of money they will gain from their asset. However, the overall revenue split is lower because the market risk gets transferred to the trading party.

Battery tolling agreement

Long-term contract between a toller (seller) and an offtaker (renter). The toller operates the BESS (including permits, site control, maintenance etc), and the offtaker supplies the electricity to charge it. This entitles the offtaker to exert control over how the stored energy is used, while the toller has limited discharging privileges. More on tolling agreements here.

CapEx - capital expenditure

Total investment required to develop and commission a BESS project, including asset acquisition and infrastructure procurement.

Fully merchant battery

100% at the mercy of market conditions. Battery owners who take their asset fully merchant carry all of the market risk but keep a bigger revenue share.

Inefficiency factor

Metric for the loss of performance due to battery charging and discharging processes.

Innovation tender (Innovationsausschreibung)

In Germany: formal call for the development of a BESS project with specific requirements. Suitable providers can then submit their bid to enter a pool of candidates, from which one will be selected to realize the project.

LCOE - Levelized Cost of Energy

Metric for cost assessment and comparison of electricity generation from different sources for the duration of a project.

OpEx - operating expenditure

Total cost associated with the operation, management and upkeep of a battery project after its launch.

Batteries & sustainability

Battery lifecycle management / discarding

End of life management for a BESS. It is important to know how the asset will be disposed of once it's reached the end of its lifespan. Exhausted batteries can be

• disassembled
• recycled
• used for research
• given a second life
• collected by regulated waste disposal services

Battery recycling

Safe disassembly of a battery to recover valuable components for reuse in compatible applications.

Green battery

A BESS produced with minimal environmental impact and for sustainable operability. Examples include thermal, flow and gravity batteries.

Second-life battery

BESS assets that have retired from their original function to fulfill a new one. For example, a battery from an electric vehicle can be repurposed for stationary applications.

Representatives 

EASE - European Association for Storage of Energy

Leading member-supported association representing organizations across the entire energy storage value chain in Europe. EASE supports the deployment of energy storage to facilitate the cost-effective transition to a cleaner energy system.

IEA - International Energy Agency

International organization working with countries around the world to shape energy policies for a sustainable and secure future.

IRENA - International Renewable Energy Agency

Intergovernmental organization supporting countries in their transition to a cleaner energy system.

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