Why LTSAs Alone Can’t Guarantee Peak BESS Performance

When managing battery energy storage systems (BESS), many asset owners and operators rely on long-term service agreements (LTSAs) to ensure smooth operations and stable performance. These agreements are an important part of risk management. They define responsibilities, outline performance guarantees, and set service expectations over the system’s lifetime.

However, in practice, an LTSA can’t always capture the full picture of how a BESS behaves day-to-day. From testing frequency to data ownership, there are limitations that operators should be aware of. Understanding these gaps is key to ensuring both contractual compliance and optimal system performance.

We explain four shortcomings that operators should be aware of.

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Who Defines “Performance”?

Most LTSAs come with performance guarantees such as availability, efficiency, or capacity. But these guarantees are typically defined and verified by the supplier. That means the same party responsible for delivering performance is also responsible for evaluating it.  

Would you trust a student to grade their own exam? What does “performing as expected” then really mean, and according to whose measurements?

Operators and asset managers should be able to independently verify the performance of their BESS. They need to make sure that the reported numbers reflect actual conditions, not just contractual definitions.

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Annual Capacity Tests Leave Long Blind Spots

It’s common for LTSAs to include just one capacity test per year. While this satisfies contractual obligations, it leaves long intervals where performance data isn’t evaluated in depth.

Imagine flying a plane with one annual check-up. Technically, it is compliant but hardly reassuring for day-to-day reliability.

If performance drops during key revenue periods, the issue may remain unnoticed until the next test — long after the financial damage has been done. This is especially critical in markets where a few days of underperformance can make a significant financial difference.

To stay ahead, many operators now complement annual testing with continuous, daily estimation of KPIs like usable energy, round-trip efficiency, and State of Health (SoH) via BESS analytics.

These insights also help operators solve issues faster. Instead of waiting for the service provider to explain what’s going wrong, operators can see for themselves what’s happening inside the BESS and decide when to intervene or request maintenance.

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Preconditioned Tests Can Skew Results

Before a capacity test, suppliers often “prepare” systems. They balance modules or recalibrate State of Charge (SoC) to achieve optimal conditions. While this might be agreed in the warranty conditions and ensures repeatable test results, it doesn’t reflect how the system performs under normal operating conditions.

Real-world operations include irregular cycling, fluctuating temperatures, and variable dispatch profiles. Annual capacity tests rarely mirror true, day-to-day performance and leave operators with a false sense of security. 

For operators it’s important to capture BESS behavior continuously. Then they can identify performance drift, weak cells, SoC inaccuracies or imbalances as they emerge – not just once a year.

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Beyond the Test: Why Continuous Insight Matters

Most well-written LTSAs already define how performance and ageing guarantees are validated, usually through a contractual reference performance test (RPT).
The RPT specifies the operating window (such as SoC range, C-rate, temperature, and preconditioning) and the acceptance criteria, like net discharged energy measured at the product metering point.

This test provides the contractual source of truth for verifying capacity and degradation.

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For practical recommendations on negotiating clear, data-driven LTSAs, have a look at the BESS LTSA Guide.‍

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For operators, the challenge lies less in defining what to measure and more in ensuring that tests are executed correctly, documented transparently and supported by ongoing operational data.

Continuous monitoring complements these formal tests. It provides visibility into what happens between the scheduled tests. With ongoing insight, operators can:

• Independently verify day-to-day performance trends using their own data.

• Detect early signs of underperformance or degradation before the next official test, for example in reduced usable energy, round trip efficiency, SoC inaccuracies or imbalance.

• Understand context and root causes through component-level signals such as thermal limits, inactive strings, or imbalance spreads.

This continuous insight ensures operators don’t just see a snapshot once a year. They see the story behind it in real time. It’s not about replacing LTSAs but about complementing them with continuous and independent visibility.

The combination of contractual guarantees and continuous insight allows operators to make more confident decisions and sustain asset value over time.

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Key Takeaways

• LTSAs protect against service risk, but don’t provide full operational visibility.

• Performance definitions vary, and it’s worth clarifying them with suppliers.

• Preconditioning can mask real-world performance trends.

• Annual testing leaves long blind spots. Analytics helps to deliver a continuous and unbiased understanding of BESS performance.

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Ready to see what your LTSA doesn’t show you?

‍See how BESS Analytics helps operators uncover hidden performance issues and protect asset value. Book a demo.