Lithium Batteries: Business Fire Hazards

When Lithium Batteries Ignite: The Business Impact of Battery Fires

Since load-shedding was introduced in South Africa in late 2007, businesses have been forced to seek alternative power solutions to maintain operations. Solar panels and lithium batteries have become popular, offering a lifeline during power outages. However, these solutions come with their risks, as Eugene, CEO of Axiom Hydraulics, experienced firsthand. "With all honesty, this fire was the most traumatic thing I’ve ever experienced in my life," he lamented.

A Tragic Turning Point: June 16, 2023

On June 16, 2023, Eugene’s professional world was turned upside down when a fire erupted at his hydraulic factory.

That day, Eugene was celebrating his wife’s birthday with a family trip to the mall when an alarm notification on his phone interrupted their plans. The CCTV footage revealed a horrifying scene—smoke and flames engulfing his workshop. Eugene immediately alerted emergency services and rushed to the factory. By the time he arrived, the fire was an uncontrollable inferno, barring any entry to the property.

Eugene stood in disbelief as he watched his life's work—and the livelihoods of 40 employees—being consumed by flames. Axiom Hydraulics, a pillar in the community for 60 years, faced a catastrophic disruption. The potential impact on their loyal clients and the broader community was staggering.

Reflecting on the event, Eugene admitted that, despite being aware of fire risks, he had never grasped the full extent of such a disaster until it struck. This tragedy underscored the critical importance of comprehensive insurance coverage and risk management for businesses.

Identifying the Cause: Lithium Batteries

The forensic investigation into the Axiom fire pinpointed a failure in one of the factory’s lithium batteries as the ignition source. A malfunction in the battery's management system led to sparks that ignited nearby wooden racking, causing the fire's rapid and devastating spread. The incident highlighted the challenges of dealing with lithium battery fires, as traditional firefighting methods proved ineffective against the unique properties of these batteries.

Broader Risks of Lithium Battery Fires in Business

Lithium battery fires pose significant risks, particularly for businesses that rely on these systems for energy security. Since June last year, four significant lithium battery fires have resulted in damages exceeding R45 million. Understanding the common causes of these fires is crucial for business owners seeking to mitigate potential risks.

Key Risk Factors for Lithium Battery Fires in Businesses

1. Incorrect Installation: The surge in demand for alternative energy solutions has led to a proliferation of installations by unqualified personnel. Ensuring certified professionals install solar systems and lithium batteries is crucial for businesses. Compliance with all applicable regulations and manufacturer guidelines is not optional but essential. Any deviation can pose severe risks, as seen in cases where improper spacing between inverters and batteries has led to overheating and subsequent fires. Business owners must insist on a valid electrical compliance certificate and a thorough inspection test report.

2. Thermal Runaway: Thermal runaway is a critical concern in lithium battery safety—a chain reaction within the battery that causes rapid increases in temperature and pressure, often leading to fires. This phenomenon can be triggered by several factors:

• Internal Short Circuits: These can result from physical damage or manufacturing defects within the battery cells.
• Overcharging and Over-discharging: Exceeding the recommended charging or discharging rates for batteries can lead to instability and fire risks.
• External Heat Sources: Batteries placed near high ambient temperatures or other heat-generating devices are at risk of overheating and igniting.
• Ageing and Wear: Over time, the components of lithium batteries degrade, increasing the likelihood of failures that could trigger fires.

Businesses must conduct regular inspections and maintenance to identify and address potential risks associated with their lithium battery systems.

3. Proximity to Combustible Materials: The Axiom Fire underscores the importance of maintaining safe distances between lithium batteries, inverters, and combustible materials. Storing flammable items within two meters of these systems can significantly amplify the risk of fire spread in the event of an ignition.

4. Tenant Awareness and Compliance: Property owners leasing space to businesses must ensure tenants know the lithium battery system risks and adhere to safety protocols. Failure to communicate these dangers and enforce compliance can lead to serious consequences, including the potential denial of insurance claims following a fire.

Business Lessons Learned and Moving Forward

The fire at Axiom Hydraulics is a stark reminder of businesses' vulnerabilities when relying on lithium battery systems. To safeguard against such devastating incidents, businesses must prioritize proper installation, regular maintenance, and strict adherence to safety guidelines. Additionally, comprehensive insurance coverage is indispensable in managing the financial fallout of such disasters.

By understanding the risks and implementing robust preventive measures, businesses can protect their operations and those who depend on them, ensuring continuity even in the face of unforeseen challenges.

Adapted from a story originally reported by CIA.

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