“Bottlenecks in the lithium-ion cell supply chain mean our customers are looking for alternatives. Some of the OEMs who spoke at the Willis Global Renewable Energy Conference explained how they are building alternative models in their supply chains, with strategically located distribution centers around the world to get the materials and equipment they need,” Alastair Nicklin, Business Development Director, Willis Natural Resources.
Diversification
Avoiding reliance on sourcing materials from a single country creates a single point of failure for supply chains. Creating multi-regional supply chains for critical components such as battery cells and inverters reduces this reliance on a single link in the chain and allows supply chains to reorient themselves and avoid restrictive headwinds. Some developers are directing their purchases to dedicated BESS factories and vertically integrated suppliers to ensure access to raw materials and reduce competition with demand for electric vehicles (EVs).
Recycling
Exploring alternative raw materials and investing in battery recycling technologies are concrete ways to reduce dependence on limited resources. Lifecycle strategies such as second-life and recycling partnerships are used both to manage end-of-life risks and to create a secondary material flow that cushions future supply disruptions.
Long-term contracts
Long-term framework agreements, volume commitments and early cost fixation with key suppliers are used to secure production slots and cushion volatility in prices and delivery times. Contracts increasingly incorporate supply chain protections, such as diversification requirements, intervention rights, alternative supplier options, and clearly allocated risks of delay and change in law. Entering into long-term supply agreements with Tier 1 suppliers is a key strategy to ensure pricing and availability.
Offshoring
A lasting impact of the COVID-19 pandemic is the shift from a “just in time” to a “just in case” supply chain model. Increasingly, battery manufacturers and developers are exploring local manufacturing capabilities through partnerships and government incentives to reduce geopolitical risks. Even though larger centers, such as China, offer cheaper production, offshoring, although at potentially higher costs, can pay off by reducing costly supply chain disruptions. Risk managers will need to leverage sophisticated scenario modeling to make informed decisions.
Cyber risk management
Cyber networks across supply chains have multiple points of failure, creating a large area of exposure that can shut down operations. Some suppliers view diversification of supply as a cybersecurity check, avoiding over-reliance on hardware and software from a single jurisdiction and mixing domestic and international suppliers to reduce systemic exposure. Implementing secure firmware and software protocols, multi-step authentication, and encrypted communications all help prevent supply chain cyber threats.
Technology and artificial intelligence
Many battery energy storage companies and software companies use AI and machine learning tools to predict technical and supply chain issues. Speaking at our Global Renewable Energy Conference 2025, Eric Liu, CMO and CEO of Huangneng BATTERO, REPT BATTERO, explains: “Battery management systems enhanced by AI and cloud analytics monitor temperature, voltage, current and other telemetric data in real-time to detect abnormal patterns and predict faults such as thermal runaway, loss of capacity or imbalance before they cause problems. breakdowns or fires. Electrochemical Impedance Spectroscopy is used by Prime Batteries to analyze battery behavior, study corrosion and electrode kinetics, support real-time data to monitor machine health and indicate any potential risks.
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Battery management systems enhanced by AI and cloud analytics monitor temperature, voltage, current and other telemetric data in real time to detect abnormal patterns and predict failures such as thermal runaway, loss of capacity or imbalance before they cause outages or fires.
Eric Liu
| Marketing Director and CEO of Huangneng BATTERO, REPT BATTERO
Risk management: A comprehensive and comprehensive strategy
Resilient developers implement project-specific quality control plans spanning the entire lifecycle, from cell production to container integration and commissioning, to detect quality or process issues before they result in failures and delays in the field. Regular audits and spot checks allow BESS companies to identify any supply chain vulnerabilities that need to be addressed. This is an essential foundation of a solid risk management strategy.
Supported by sophisticated data and analytical tools, such as Willis’ Supply Chain Diagnostic, manufacturers, developers and other supply chain BESS companies can assess and measure critical risks, such as natural disasters, terrorism and pandemic, throughout the lifecycle of product supply chains. The tool allows risk managers to sort, group and prioritize risks by geography, asset type and risk category. With a central platform, risk managers can analyze risks from a business continuity perspective, providing timely insight into possible failure points before risks crystallize.
With this forward-looking view of supply chain vulnerabilities, risk managers can use data to make informed decisions about developing a resilient risk strategy.
Although comprehensive end-to-end supply chain insurance solutions are developing, multiple coverages combine to create an overall risk transfer strategy.
- Startup delay
- Business interruption
- Possible interruption of activities
- Parametric insurance
- Trade disruption insurance
- Strikes, riots and civil unrest
- Cyber
- Commercial credit
- Sea cargo
Knowing which products are relevant and appropriate, and at what levels of cover, are all questions that a trusted renewable energy insurance broker can answer.
To find out how to create a tailored supply chain risk management strategy, contact our team.