Today, we’re thrilled to sit down with Christopher Hailstone, a renowned expert in energy management, renewable energy, and electricity delivery. With his deep knowledge of grid reliability and security, Christopher offers unparalleled insights into the evolving landscape of energy storage systems. In this conversation, we dive into the nuances of battery technology, exploring the critical distinction between energy density and usable energy, the hidden challenges of high-density systems, and the strategies asset owners can use to maximize value in a competitive market.
Can you start by explaining what you mean by the “density trap” in the energy storage industry?
I’m glad you asked about that. The “density trap” refers to the industry’s obsession with packing more megawatt-hours into fewer boxes, chasing higher energy density as if it’s the ultimate goal. On the surface, it looks like a win—fewer enclosures should mean lower costs and smaller footprints. But in reality, it often leads to operational headaches. Higher density doesn’t always translate to better performance or savings once you’re out in the field. It’s like focusing on the size of a car’s gas tank without considering whether you can actually use all that fuel effectively.
Why does the idea of higher energy density seem so appealing at first, and where does it fall short?
It’s appealing because, theoretically, cramming more capacity into less space suggests efficiency—less hardware, smaller sites, maybe even lower upfront costs. Who wouldn’t want that? But the shortfall comes when you dig into logistics and real-world use. Some of these ultra-dense units are incredibly heavy or complex, making them a nightmare to transport or install. You end up with unexpected shipping costs or integration challenges before you’ve even turned the system on. It’s a classic case of the numbers looking great on paper but not holding up in practice.
How does usable energy differ from energy density, and why does it matter more for battery storage systems?
Usable energy is the amount of stored energy you can confidently and consistently dispatch when it’s needed, whereas energy density is just about how much total energy you can pack into a given space. The distinction is critical because usable energy directly ties to value—whether that’s supporting the grid or generating revenue. Density might tell you the size of your tank, but usable energy is like having an accurate fuel gauge. Without knowing what you can actually use, you’re just guessing, and that guesswork can cost you.
Can you share a simple example that illustrates why usable energy is the key metric over total capacity?
Absolutely. Imagine you’ve got a 100-megawatt-hour battery system. On paper, that’s your capacity. But due to inefficiencies, cell imbalances, or degradation, you might only be certain you can dispatch 80 megawatt-hours. If you’re bidding into a capacity market, you’re likely to play it safe and bid just that 80, leaving 20 megawatt-hours stranded. That’s energy you’ve paid for but can’t monetize. Usable energy is about closing that gap so you’re not leaving money on the table.
You’ve pointed out that higher energy density doesn’t always mean lower costs or better performance. Can you unpack that a bit?
Sure. The assumption is that denser batteries mean fewer units, smaller sites, and less capital expenditure. But that’s not the full picture. For one, these high-density units can be so heavy or unwieldy that shipping and installation become major hurdles. Then, once they’re in place, if they can’t discharge at their full rated power due to thermal issues or other limitations, you might have to oversize your system just to meet commitments. That wipes out any perceived savings from having fewer enclosures and can even increase costs through added complexity.
What are some specific risks asset owners face when there’s uncertainty about a battery system’s usable energy, especially in capacity bidding markets?
Uncertainty in usable energy is a revenue killer in capacity markets. When you bid ahead of time, even a small doubt about your system’s deliverable capacity can force you to underbid. Say you’ve got a 100-megawatt-hour system but bid only 80 to be safe—that’s 20 megawatt-hours of potential revenue lost. Across global markets like the U.S. or Europe, where thousands of megawatt-hours are bid daily, those losses add up fast. It’s not just about missing out on money; it’s also about reduced competitiveness and trust with grid operators.
What are the main causes of uncertainty in battery performance, and how can they be addressed?
Uncertainty often stems from things like state-of-charge errors, where you misjudge how much energy is actually available, or cell imbalances, where some cells degrade faster than others. Over time, degradation from temperature or usage patterns also plays a role. The good news is these issues are manageable with the right tools. Advanced hardware and software, like integrated battery management systems and predictive analytics, can detect imbalances or performance drops early. Real-time monitoring lets operators rebalance cells or adjust operations proactively, preserving output and reducing surprises.
How can asset owners ensure they’re getting the most value from their battery systems over the long haul?
It starts with asking the right questions. First, they need to nail down how much usable energy their system can truly deliver—not just the nameplate capacity, but what’s dispatchable under real conditions. Then, they should focus on building confidence in bidding that energy into the market, which might mean investing in better monitoring or analytics. It’s also about balancing short-term revenue with long-term health—optimizing usage patterns or cooling systems to minimize degradation over a 20-year lifespan. A connected ecosystem of hardware and software can make all the difference here.
Looking ahead, what is your forecast for the future of energy storage systems in terms of balancing usable energy and density?
I think the industry is on the cusp of a shift. Future tenders and contracts will increasingly prioritize systems that prove reliable, usable energy over raw density stats. We’ll see more emphasis on integrated solutions that provide certainty—better forecasting, real-time management, and lifetime optimization. Density will still matter, but it’ll be a secondary metric to operational value. Asset owners who adapt to this mindset, focusing on dispatchable energy and long-term performance, will be the ones leading the market in the coming years.
