The true cost of poor BESS O&M

Battery energy storage is increasingly central to how renewable portfolios are financed, operated and optimised. Yet while capital deployment, revenue modelling and route-to-market strategies are often treated with precision, operations and maintenance is still too frequently viewed as a controllable cost rather than a core value driver.

For asset owners, IPPs and fund managers, that mindset creates a gap between expected and realised performance. On paper, the numbers stack up. In reality, small inefficiencies, missed interventions and inconsistent operational practices begin to compound. The result is not usually a single failure, but a gradual erosion of value that often goes unnoticed until it becomes material.

What follows are five of the most common and least visible ways poor BESS O&M impacts project returns.

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1. Loss of availability and missed market revenues

Availability is the foundation of any BESS revenue strategy. Whether assets are participating in the Balancing Mechanism, frequency response, DC markets or wholesale trading, revenue depends on the system being available at the right time, not just operational in a general sense.

Poor O&M practices often lead to subtle but persistent availability losses. These may come from delayed fault response, unresolved alarms, or systems left in suboptimal states following minor issues. Individually, these events may seem insignificant, but over time they reduce the asset’s ability to respond when market conditions are most favourable.

The financial impact is not limited to lost dispatch opportunities. It also includes reduced confidence from trading partners and optimisation providers, who rely on predictable performance. In competitive markets, even marginal reductions in availability can translate into disproportionate revenue loss.

2. Accelerated degradation through poor operational strategy

Battery degradation is inevitable, but the rate at which it occurs is highly sensitive to how the system is operated. Thermal management, depth of discharge and state of charge strategy all play a critical role in preserving long-term performance.

Without structured O&M oversight, these variables are often left unmanaged or are driven purely by short-term revenue objectives. Operating outside optimal temperature ranges, cycling aggressively without regard for long-term impact, or maintaining inappropriate state of charge windows can all accelerate degradation.

The consequence is a reduction in usable capacity earlier than expected, which directly affects revenue potential and project lifespan. In many cases, this degradation is not immediately visible in headline performance metrics, making it harder to identify and correct before it becomes embedded.

3. Warranty voidance and loss of manufacture support

Warranty frameworks for BESS assets are detailed and conditional. They rely on adherence to specific maintenance schedules, operational parameters and reporting requirements. Failure to meet these conditions can invalidate warranty coverage, often at the point where it is most needed.

Missed preventive maintenance, incomplete records or deviations from recommended operating practices can all create grounds for dispute. When issues arise, asset owners may find that claims are rejected or significantly reduced due to non-compliance with warranty terms.

This shifts financial risk back onto the asset owner, turning what should be a protected asset into an exposed one. In large-scale systems, the cost implications of even partial warranty loss can be substantial.

4. Insurance implications and claim challenges

Insurance providers are placing increasing scrutiny on how BESS assets are maintained and operated. As the sector matures, insurers are refining their requirements around risk management, documentation and compliance.

Inadequate O&M practices can lead to higher premiums, stricter policy conditions or, in some cases, limited coverage. More critically, in the event of a claim, insufficient maintenance records or evidence of poor operational practices can result in disputes or outright rejection.

From an asset management perspective, this introduces an additional layer of financial risk. Insurance is often assumed to be a safety net, but its effectiveness is closely tied to the quality of O&M execution.

5. Reputational impact with off-takers and lenders

Beyond direct financial performance, poorly managed assets can affect relationships with key stakeholders. Off-takers, lenders and investors expect a level of operational discipline that aligns with the scale and importance of the asset.

Persistent underperformance, unplanned downtime or inconsistent reporting can erode confidence. For lenders, this may translate into increased scrutiny or tighter covenants. For off-takers, it may affect contract renewals or future agreements.

In a market where credibility and track record are critical, reputational impact can have longer-term consequences that extend beyond a single project.

Shifting the perspective on BESS O&M

The common thread across these risks is not failure in the traditional sense, but a lack of structured, proactive management. BESS assets are complex systems that require consistent attention, clear processes and a strong understanding of how operational decisions influence financial outcomes.

Treating O&M as a cost centre often leads to reactive approaches, where issues are addressed as they arise rather than prevented. In contrast, a value-driven approach to O&M focuses on maintaining availability, preserving asset health and ensuring compliance with both warranty and insurance requirements.

This shift does not necessarily require significant additional spend, but it does require a change in how O&M is prioritised and executed. The return on that shift is typically realised through improved performance, reduced risk and greater confidence from stakeholders.

A practical step:

For many asset owners, the challenge is not recognising the importance of O&M, but understanding how their current approach measures up.

AMP Trust has developed an O&M Health Check designed to provide a structured view of asset performance, maintenance practices and potential risk areas. It offers a practical starting point for identifying gaps and prioritising improvements.

If you are responsible for BESS assets and want to understand how your current O&M approach may be impacting performance and returns, you can download the O&M Health Check or arrange a free site audit with the AMP Trust network.

Final thoughts:

In BESS, value is not only created at the point of investment or through market participation. It is protected and sustained through how the asset is operated every day.

Small gaps in O&M do not always show up immediately, but over time they shape the difference between expected and realised returns. Recognising that early, and acting on it, is what separates well-performing assets from those that gradually fall short.

Get in touch

Brett Baber Chief Executive Officer & Co-Founder of Thanos Renewables

Brett is a seasoned leader in utility-scale renewable energy with deep experience across solar, battery energy storage systems (BESS) and project delivery.