Properly designed systems offer cost savings and resilience with minimal risk 

Lithium-ion batteries, ubiquitous in smartphones and laptops, are also helping the grid soak up wind and solar power. California’s grid-connected battery fleet has grown 20-fold to 5,000 megawatts since 2019, and it is expected to increase tenfold by 2050 to meet our climate goals. Here in San Diego, SDG&E recently built four battery-powered microgrids. 

Batteries are also being installed by businesses to provide improved reliability and cost savings – a combination that is particularly appealing in San Diego. Electricity rates have soared as SDG&E has invested in underground power lines and other grid-hardening measures, and demand charges based on a business’s peak usage rank among the highest in the country. 

These costs threaten the competitiveness of energy-intensive businesses in San Diego’s world-leading biotech, defense, and high-tech manufacturing sectors. A growing number of these companies are turning to batteries as a cure for electricity cost anxiety, with a combination of state incentives, diverse cost-saving applications, and financing solutions ensuring that the investment more than pays for itself. 

Businesses can use batteries to avoid excess demand charges by drawing power from on-site storage instead of the grid during hours of peak electricity use. Batteries can also charge when power is cheap for later use during more-expensive hours of high grid demand, with added savings when batteries are charged by on-site solar panels. Participation in virtual power plants (VPPs) may provide additional revenue-generating opportunities.

Despite these cost advantages, there have been some local concerns about the safety of batteries following a fire at the large-scale Valley Center Storage Facility. In rare cases, typically resulting from defective products or poorly installed or managed systems, lithium-ion batteries can experience “thermal runaway” events when one battery cell catches fire and causes others to ignite. 

Power plants, transmission lines, and other energy technologies we depend on every day have inherent safety risks, but these risks are mitigated through regulations, technology improvements, and experience. Misperceptions of the relative safety risks of newer technologies are understandably common, but the reality is that battery adoption is skyrocketing worldwide because properly-executed projects have proven extremely safe.

Battery safety starts with codes and standards. California has established rigorous battery fire safety standards under California Fire Code (CFC) 1207 and standards for their proper installation under California Electrical Code (CEC) 706. These highly-detailed standards cover specifications for wiring, clearances, fire suppression systems, emergency management systems, and much more, and they are regularly updated based on real-world experiences. 

While these standards are set at the state level, responsibility for certifying compliance and issuing permits lies at the municipal level with local authorities having jurisdiction (AHJ) such as fire marshals. Some jurisdictions – including San Diego – are considering supplementary standards, including more clearances, sprinkler systems, and battery-specific training for local AHJs. Increased engagement from AHJs can be helpful, but adding requirements to already-strict state and national standards can add unnecessary costs without demonstrable safety benefits.

Another driver of safety improvements are batteries themselves. All battery systems deployed in California are certified under Underwriters Laboratory (UL) 9540, which tests products for safety against impacts, temperature swings, and other risks. These standards are continually updated to reflect the latest technology developments, with industry leaders like Tesla often raising the bar for what’s possible. For instance, Tesla’s innovative liquid cooling systems have earned their Megapacks partial exemptions from New York’s stringent fire safety rules. 

The final ingredient for battery safety is an experienced project developer. Our company Scale Microgrids has built a growing number of battery projects in California, and we’ve become deeply familiar with applicable codes and performance specifications while building relationships with AHJs, facilitating a smooth approval process with maximum confidence. Since we typically own and operate batteries sited on our customers’ properties, maintaining the highest standards of safety is essential to our business. 

On-site battery storage offers a versatile solution for managing energy costs for the businesses that power San Diego’s economy, while also enhancing resilience and providing support for the entire grid. Fortunately, the evolution of codes and standards, improvements in battery technology, and growing experience with battery systems mean that businesses don’t have to abandon plans for on-site storage any more than they have to abandon lithium-ion-powered laptops and smartphones.