The dangers of lithium-ion batteries for businesses

Fire and Rescue NSW (FRNSW) recorded 272 lithium-ion battery-related fires in 2023, at a rate of 5.2 a week, which has led to a surge in insurance claims¹.

“We are seeing a surge in incidents involving e-bikes, battery-powered golf buggies, and aftermarket phone chargers, all of which utilise lithium-ion batteries. These fires often result from improper battery handling, charging issues, or faulty equipment, causing significant property damage and safety risks, according to NewSure General Manager, Brett Edmonds.

“Many of the fires linked to lithium-ion batteries stem from charging practices that don’t align with Original Equipment Manufacturer (OEM) specifications. A growing issue is the use of cheap, poor-quality batteries and chargers, often purchased online from overseas suppliers that offer no warranty and don’t meet Australian Standards. Even when a quality battery is used, pairing it with an aftermarket charger – or vice-versa – poses significant risks. To mitigate these risks, we recommend purchasing batteries and chargers from well-known, reputable brands through local vendors”, Edmond says.

Understanding the risks: What makes lithium battery storage dangerous?

Lithium batteries are popular for their high energy density and long lifespan, but these same attributes also pose significant risks, particularly when stored improperly. The risk of fire is a critical concern, influenced by several factors, including:

• Quantity of batteries: The larger the quantity of batteries stored, the greater the risk, especially if they are not properly spaced out.
• Battery chemistry: Different lithium chemistries have varying levels of reactivity, especially with oxygen. Some types of lithium batteries are more prone to thermal runaway – a condition where the battery overheats and catches fire – than others.
• Energy Rating and State of Charge (SOC): High-energy batteries or those stored at a high SOC are more likely to experience thermal runaway if damaged or exposed to extreme conditions.
• Storage spacing and arrangement: Proper spacing and arrangement of batteries are crucial to prevent the spread of fire. Businesses should adhere to guidelines limiting storage footprint and height while ensuring sufficient spacing between storage piles.
• Handling and integrity: Rough handling or breaches in battery integrity, such as punctures, significantly increase the risk of thermal runaway.

Best practices for lithium battery storage

According to the ACCC, rare but serious fire hazards from lithium-ion batteries are increasingly occurring and businesses as well as consumers should choose, check, use and dispose of the batteries safely.

To mitigate the risks associated with lithium batteries, businesses must implement rigorous safety protocols. Below are some recommended best practices:

Minimise on-site storage

To reduce fire risk, businesses should limit on-site storage of lithium batteries to incidental quantities. This includes limiting the storage footprint to 20m², keeping storage piles to a maximum height of 1.8 meters, and ensuring at least 3 meters of open space between piles and other combustibles. Off-site storage options, such as temperature-controlled containers or secure third-party facilities, should be considered for larger storage needs.

Implement special handling procedures

Proper handling is crucial to prevent damage to lithium batteries. Businesses should establish strict inventory handling methods, ensuring that batteries are not damaged during handling and that damaged stock is identified and isolated immediately. For forklifts and other material handling equipment, any physical damage to the battery or its enclosure should be reported promptly.

Utilise specially designed storage cabinets

On-site storage should be done in specially designed cabinets that offer integrated fire extinguishing systems, off-gas management, and pressure relief designs. These features help control smoke and fumes in the event of a thermal runaway incident, providing an added layer of safety.

Upgrade fire safety systems

Traditional fire suppression systems may not be sufficient for lithium battery fires, particularly in bulk storage situations. Upgrading to specialized sprinkler systems, such as in-rack sprinklers and more robust ceiling sprinklers, is advisable. Segregating storage into dedicated areas can further help contain potential fires.

Maintain optimal charge levels

Storing batteries at a high state of charge increases the risk of thermal runaway. Businesses should store lithium batteries at a charge level between 30-50% and regularly monitor and adjust charge levels to ensure safety.

Control temperature and environment

Temperature control is essential for safe lithium battery storage. Storage areas should be kept within the recommended temperature range of 10-27°C. Installing climate control systems or temperature monitoring devices can help maintain consistent environmental conditions.

Emergency response plans and training

Even with preventive measures in place, the possibility of fire or thermal runaway cannot be entirely ruled out. Businesses should develop an emergency response plan specific to lithium battery fires and ensure that operators are trained to identify early signs of thermal runaway. Formal training should cover the steps to take in the event of a fire or thermal runaway involving material handling equipment.

Incident response kits should be installed near equipment, including fire-rated blankets, heat-resistant gloves, non-combustible containment drums, and appropriate fire suppression media.

Material handling equipment using lithium batteries

A significant trend in industrial operations is the shift from traditional lead-acid to lithium-ion batteries in material handling equipment like forklifts and pallet jacks. lithium-powered forklifts offer advantages such as faster charging and longer operational life. However, this transition introduces new risks that require careful management.

lithium battery-powered material handling equipment often relies on “opportunity charging,” with decentralised charging stations throughout storage areas. This convenience comes with increased fire risk, particularly if safety standards and certifications are not met.

Certification standards for lithium battery-powered equipment

For businesses using material handling equipment powered by lithium batteries, adhering to certification standards is crucial:

• Class 1 and 2 forklifts: UL 2580, “Batteries for Use in Electric Vehicles,” a standard for testing batteries used in large electric vehicles.
• Class 3 forklifts (pallet jacks): Either UL 2271, “Batteries for Use in Light Electric Vehicle (LEV) Applications,” or UL 2580.
• Forklift applications: UL-E and UL-EE Certifications and UL 583, “Standard for Safety for Electric Battery-Powered Industrial Trucks,” are best practices.
• Battery Management Software (BMS): UL 1998, “Standard for Safety for Software in Programmable Components,” ensures that the software managing the battery system is reliable and safe.
• Firmware/Hardware evaluation and testing: UL 991, “Standard for Tests for Safety-Related Controls Employing Solid-State Devices,” is essential for safety and reliability.

The role of business interruption insurance

While implementing these safety measures is crucial, businesses must also prepare for the financial impact of a catastrophic event. This is where business interruption insurance comes into play.

Business interruption insurance can help your business continue operating if your property is lost or damaged after a catastrophic event, such as a fire. It covers ongoing costs, allowing your business to recover and rebuild without the added pressure of financial instability.

In the event of a fire caused by lithium batteries, the damage can be extensive, potentially halting operations for weeks or even months. Business interruption insurance provides a financial safety net, enabling your business to survive during the recovery period.

By combining robust safety protocols with business interruption insurance, businesses can protect both their physical assets and financial stability. This comprehensive approach ensures that, even in the face of disaster, your business can continue to operate and recover.

How to safeguard your business

The increasing reliance on lithium-ion batteries in business operations introduces significant risks that must be managed through proper storage, handling, and emergency response protocols. Businesses, particularly those using lithium battery-powered material handling equipment like forklifts, should adhere to the highest safety standards and certifications to minimise these risks.

Furthermore, incorporating business interruption insurance into your risk management strategy is essential. It not only provides financial protection in the aftermath of a catastrophic event but also helps ensure your business can continue operating during the recovery process. By combining proactive safety measures with the security of business interruption insurance, businesses can mitigate the dangers associated with lithium battery storage and safeguard their operations against potential disasters.

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References

1. 2024 Fire and Rescue NSW, Fire and Rescue NSW recording Lithium-Ion battery fires at a rate of five a week – NSW, March 2024.
2. Australian Competition and Consumer Commission. (n.d.). Lithium-ion batteries and consumer product safety, October 2023
3. Underwriters Laboratories (UL). (n.d.). UL 2580: Standard for Safety for Batteries for Use in Electric Vehicles. UL Standards.
4. Underwriters Laboratories (UL). (n.d.). UL 2271: Standard for Batteries for Use in Light Electric Vehicle (LEV) Applications. UL Standards.
5. Underwriters Laboratories (UL). (n.d.). UL 1998: Standard for Safety for Software in Programmable Components. UL Standards.
6. Underwriters Laboratories (UL). (n.d.). UL 991: Standard for Tests for Safety-Related Controls Employing Solid-State Devices. UL Standards.
7. Underwriters Laboratories (UL). (n.d.). UL 583: Standard for Safety for Electric Battery-Powered Industrial Trucks. UL Standards.

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