Why do BESS Operators need an independent tech solution, early?

In this piece, we explain how owners of battery energy storage systems (BESS) must change how they approach asset management in response to increased market complexity.

The business of battery energy storage systems (BESS) has fundamentally changed

Growth in energy storage systems around the world is gathering pace. Assets have become larger and more complex, as have the amounts of money involved and the types of deals being done. This means that BESS operators need to change their approach to asset management. BESS owners and operators have spent most of the last decade finding their feet, figuring out systems on the fly and using generic low-tech digital tools. It has been easy to outsource the management of their BESS assets to third parties, which offer highly-bundled services. Most of these services cover three main areas:

EPC contracting: To help operators get assets developed and built.

O&M contracting: To help operators maintain and service their assets. 

Route-to-market: To help operators ensure assets are well monetised.

By outsourcing in these three areas, BESS owners have been able to minimise their effort to take assets through the operational and ownership lifecycle. They have been able to meet their outsourcing needs with a relatively small number of contractors.

However, the deficiencies of this approach are now becoming clear. In such a highly fragmented market, it has become tougher for BESS owners to track data around: how their projects are performing, and it is near impossible to demonstrate the efficiency of their outsourcing efforts.

This is why working with an independent BESS portfolio management platform early, can help. We support BESS owners to move beyond passive outsourcing and a reliance on multiple third parties; and ultimately become more active asset managers. This helps to boost profitability, maximise asset value and attract investment on better terms from the top. We ensure that our customers procure their supply chains in such a way that demands value from the outset, both in terms of cost savings and efficiencies. Many of our customers have taken the strategic decision to adopt an independent tech solution long before energisation, in order to secure transparency of their own data throughout the asset lifecycle. Establishing this insight (as a first step) enables the tools and workflows to be very sharp before the BESS assets even come online. Independent tech gives BESS operators more control As the power balance shifts in the industry from supply chain vendors (e.g., of equipment, services, and monetisation) towards asset owner-operators funded by large inflows of capital, the role of an independent technology platform in the hands of the asset owner/operator is now absolutely critical. Origami’s software solution – including a digital backbone and a suite of increasingly powerful product applications – is fundamentally decoupled from, but interfaces with, supply chain vendors and their associated systems. In this way, our system puts full transparency and ownership of physical and financial data directly into the hands of the BESS owners and enables them to take informed actions based on unique insights. As a result, Origami’s system provides valuable business benefits both internally and externally:

• It's a powerful BESS portfolio management tool for internal users to enable operational excellence to help deliver attractive through-life returns on asset investment, while simultaneously managing key risks; and

  
  

• It's a modern digital environment with clear, standardised interfaces for external 3rd parties, enabling more robust supply chain management, oversight, and frictionless change, across the portfolio and through an asset’s lifecycle.

In short, our independent BESS portfolio management platform provides physical and financial insights to help asset owners and investors to seize opportunities in all markets and geographies.

It is now common to see individual BESS deals worth at least £1bn each, and we see no shortage of investor appetite to participate in the sector. Even so, BESS operators need to be proactive and transparent about asset management if they want to unlock investment at the most attractive rates. Institutional investors will demand this, as they seek to comply with more stringent reporting requirements about their activities.

This is good risk management. Institutional investors need to do sensible, long-term deals for their shareholders, and assets of 100MW-500MW are inherently riskier than their smaller counterparts because more investment is concentrated in fewer assets. An independent digital platform enables BESS operators to satisfy these investors from day one. BESS asset owners and operators need to find ways to reduce costs and improve potential asset value. Asset owners (with strong internal capabilities), will be able to show that they can be effective - if they've already established access to actionable real-time data, which is tailored to match the lifecycle strategy.

This shift is underway

We see BESS owners and operators starting to deconstruct bundles of services offered by their third-party suppliers. Working with Origami can empower them to provide more services in-house, rather than outsourcing to someone else. This is vital if they're going to thrive in a complex industry which is fighting between slow buildout and rapidly developing tech.

Origami provides a cutting-edge independent BESS portfolio management platform which combines the physical and financial worlds to allow Asset Owners and Operators total visibility of their portfolio of assets across all markets, creating actionable insights, streamlining performance and generating optimal risk-adjusted returns throughout the asset lifecycle. ​

The Origami Platform is a modern digital environment with clear, standardised interfaces for all 3rd parties, enabling more robust supply chain management, oversight, and frictionless change from the beginning.