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EU’s Battery Passport ‘will give energy storage investors more clarity on bankability’ of projects

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The European Union’s Battery Passport, which will make all of the components of devices placed into the market traceable, will be a useful tool for investors in energy storage, Energy-Storage.news has heard.  

The digital passport system is being introduced as part of the European Union’s (EU’s) Batteries Regulation and as such, compliance will be mandatory. The regulation came into force in August last year, broadly welcomed by the energy storage industry as represented by prominent trade associations.

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The rules include requirements on things like carbon footprint labelling and recycled content, supply chain transparency and health and safety labels. The regulation is considered a key part of delivering the EU’s Green Deal package.

The passport is perhaps the most radical aspect of the regulation from a technological point of view, requiring QR codes to be put on components and materials that give access to crucial data on the batteries.

While that should give transparency and accountability on everything to do with how sustainable the equipment’s manufacture and materials are, the passport will also be crucial for investors, Maher Chebbo of Univers told Energy-Storage.news.

Chebbo was among the panelists speaking about the topic this morning at the Energy Storage Summit EU, hosted in London, UK, by our publisher Solar Media.

Ahead of that session, Energy-Storage.news spoke with Chebbo, who is managing director for Europe at Univers (formerly known as Envision), a digital decarbonisation solutions provider.

The passport is necessary, Chebbo said, because: “we want to trace end-to-end the whole history of the batteries, from the initial design to the manufacturing to the [expectation once it is placed] on the market”.

Chebbo has for the past three years chaired a European Commission (EC) group on the “digital use cases, digital technologies needed to make the batteries of Europe competitive and innovative”. The passport was decided as one of seven key technologies with the potential to do that.

Also speaking on the panel this morning were Patrick Vrank, project lead on the Batteries Pass Consortium which is delivering the passport and Richard Wagstaff, head of project development at UK-headquartered energy storage investor-developer Gore Street Capital.

Project engineer Vrank offered updates on the development of the passport. A major milestone was reached last Spring when the first content guidance was created, and Vrank encouraged the audience to visit the Battery Pass website for the latest information.

Wagstaff said meanwhile that the passport and the wider Batteries Regulation were very welcome, particularly as the fund Gore Street manages has mandates of its own to meet sustainability criteria. The regulation would help Gore Street stay in line with that, although of course, the implementation may be a complex proposition and Wagstaff said questions remain about the timelines for implementation and how that would affect upcoming procurements.

Chebbo told Energy-Storage.news in the interview beforehand that the passport will track and display data that includes “identification data, basic characteristics, and also the context how the battery lives, for the performance and the durability”.

The latter, he said, will enable the industry to extend the battery lifecycle to “as long as possible”.

“So that rather than saying this battery will live for eight years, it could live maybe for 12 years, and extend the performance of the battery as well, that it could charge more, be more effective in the discharge as well.

In other words, while the passport will place some burden on the industry to comply, there will also be definite advantages in terms of helping investors better understand how batteries can be used in various use cases, their expected lifetimes and ultimately their investability as an asset.

“Everything is correlated here. So, the insurance companies, the investors battery energy storage system (BESS) assets, they’re expecting to have a decent IRR out of their investment. Whether it’s 5%, 7%, 10% of the investment, and to be able to see the bankability of the battery energy storage project, you need to calculate the whole capex during the development phase,” Chebbo said.

“Then when you commission the BESS, you have all the OPEX and all the expenses on a yearly basis of the BESS. All of that, you need to calculate it. You need to know how long the life of the battery is. You need to know how much capacity you could use and the performance. How much are you going to spend on the maintenance of the battery? The battery passport will help in the repair, measuring and predicting the end life, it will also help in the health of the asset. It helps also in the safety,” Chebbo said.

“So definitely, this is crucial for the bankability calculation that you would give during the business case at the beginning for an investor.”

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