Faulty state of charge (SOC) readings could be costing investors up to $1 million per battery, with inaccurate SOC readings meaning battery operating strategies could be wildly misconstrued – in addition, if SOC readings are wrong, BESS assets could fail to meet contractual regulations and face financial penalties
One of the biggest challenges battery storage investors find themselves grappling with is ensuring that they obtain accurate state of charge (SOC) readings for batteries in their fleet. Faulty state of charge readings can cause huge financial losses and could mean that a battery could lose as much as approximately £750,000 ($1 million) per year. To put this in context, in Great Britain, revenues have been reported in the range of £36,000 to £88,000 per MW per year. In 2024, the average size of battery projects being submitted into the planning system was 68MW. So, a 68MW battery would generate annual revenue in the range of £2.4 million to £6 million. At the lower end of that scale in particular, a shortfall of £750,000 a is significant loss.
Why exactly are SOC readings so important from the perspective of revenue generation? Inaccurately estimating SOC can lead to wildly misconstrued strategies for operating battery assets – underestimate SOC during times of peak demand and battery energy storage system (BESS) assets will forego highly profitable trading opportunities. This is the type of underutilisation that plagues many BESS assets and results in substantial lost revenues. An additional problem is that, in the majority of cases, grid services and power contracts demand precision in energy delivery – therefore, a BESS asset that fails to meet its contractual obligations as a result of a faulty SOC reading could be subject to financial penalties, not to mention being at risk of suffering damage to its credibility.
Overpaying on battery hardware capex by 25 per cent
How do BESS asset operators go about mitigating these risks? Some put in place depth-of-discharge limits that are too conservative – for example, confining operations to the 10–90 per cent SOC range. The effect of this is that the asset’s usable capacity and revenue potential is drastically cut. As battery analytics company Accure has put it: “Viewed from another perspective, these assets effectively overpaid their battery hardware capex by up to 25 per cent.” Another concern is that inaccurate SOC estimation can have an adverse impact on warranty coverage because the battery management system records higher cycling than actually occurred.
In the last week, Fluence has highlighted the issue of storage operators commonly withholding up to 15-25 per cent of their asset’s range (7.5-12.5 per cent from maximum charge and 7.5-12.5 per cent from minimum discharge) in an attempt to avoid financial penalties. Their worry is founded on concerns about reliable performance at the high and low ends of their assets’ range – consequently, revenue “embedded in the asset’s cash flow models, which is essential for investment decisions, is increasingly being adjusted down”, Fluence said. Capacity is held back because inaccurate SOC signals lead to uncertainty among storage owners and operators as to the actual energy available to dispatch from their asset at the point of submitting bids into the market.
SOC imprecision as high as 30 per cent
Substandard SOC readings are a common challenge. It affects lithium iron phosphate-based (LFP) batteries in particular. In a nutshell, determining SOC is reliant on accurately measuring voltage and current, but voltage and current sensors in battery systems are typically not accurate enough to facilitate dependable SOC measurements. This problem is exacerbated when batteries spend long periods in the middle SOC range. Added to this is the issue that the ageing of cells is not easy to measure, and to make matters even more complicated, cells age at different rates.
The upshot is that inaccuracy when making SOC readings is all too common. Fluence has warned that, while plus or minus 3 to 5 per cent SOC inaccuracy is typical for many operators on many days, some storage owners have reported SOC imprecision as high as plus or minus 15 per cent, and even plus or minus 30 per cent in extreme cases.
Now the industry is on a mission to tackle the issue, with some storage operators turning to cloud-based predictive battery analytics in an effort to tackle the problem. With up to 30 per cent of battery assets’ revenue on the line, it’s a problem that can’t be solved quickly enough.
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