Air-Cooled vs. Liquid-Cooled Utility BESS: A Nordic Engineering Perspective

As utility-scale battery energy storage systems (BESS) become integral to grid stability and renewable integration in the Nordics, system designers must weigh not only capacity and compliance, but also thermal management. Two predominant technologies—air-cooled (e.g., Huawei ESS 1.0) and liquid-cooled (e.g., Huawei ESS 2.0)—represent different approaches to thermal regulation. This post outlines the scientific and operational differences between the two, focusing on heat transfer efficiency, system performance, and cost implications under Nordic climatic conditions.

Thermal Principles: Air vs. Liquid Cooling

Air and water (or a dielectric liquid) differ by orders of magnitude in their ability to transfer and store heat. The key distinctions lie in their physical properties:

• Specific heat capacity: Water's value is 4.18 kJ/kg·K, compared to 1.0 kJ/kg·K for air. This means water can absorb over four times the heat energy for the same temperature increase.
• Thermal conductivity: Water conducts heat about 24 times better than air, allowing for much faster heat removal from the source.
• Density: Water is approximately 1000 times denser than air, enabling more compact and efficient thermal management systems.

These properties mean liquid cooling systems can remove heat much faster and more uniformly than air, which is especially relevant at higher power densities and in thermally sensitive applications like Li-ion storage.

System Design Implications

The choice between air and liquid cooling has a direct impact on the physical design and energy density of the BESS.

ESS 1.0 (Air-cooled)

• Cooling is managed via forced convection and ventilation, pushing air across battery modules.
• Heat removal can be uneven, creating thermal gradients across cells and racks, which can accelerate degradation.
• Requires more buffer space between components for airflow, leading to lower overall energy density.
• More susceptible to external temperature swings and dust or moisture ingress through ventilation systems.

ESS 2.0 (Liquid-cooled)

• Uses a closed-loop fluid circuit to circulate a coolant directly to heat plates attached to battery modules.
• Maintains a very narrow thermal gradient (often < 3°C) across all battery modules, ensuring uniform cell temperatures.
• Enables a compact, high-energy density container design, achieving approximately 4.5 MWh per 20-ft container.
• Better suited to variable or cold outdoor conditions due to controlled internal heat distribution and the option for active pre-heating.

Performance & Reliability in the Nordic Context

Low ambient temperatures in Nordic countries pose dual challenges: the risk of internal condensation and increased self-consumption for heating to maintain optimal battery temperatures.

Huawei’s liquid-cooled ESS 2.0 is designed to operate down to -30°C with minimal auxiliary heating losses. In contrast, an air-cooled system like ESS 1.0 must rely more heavily on electric heaters, which significantly impacts its net round-trip efficiency (RTE).

RTE

• ESS 2.0 (Liquid-cooled): Achieves up to 90.3% RTE at a 0.5C discharge rate due to efficient thermal management.
• ESS 1.0 (Air-cooled): Reaches around 85.5% RTE under similar conditions, partially due to less efficient heat handling and higher auxiliary power consumption.

Cycle Life

• ESS 2.0 (Liquid-cooled): The system's superior thermal uniformity reduces localized cell degradation, which can extend the operational life by 10–30% under comparable use cases.

Cost Considerations

While performance is critical, the economic case is equally important.

• CapEx: Liquid cooling adds system complexity (e.g., pumps, fluid circuits, heat exchangers), increasing the upfront capital expenditure by approximately 10–20%.
• OpEx: The higher efficiency and lower auxiliary power demand of liquid-cooled systems lead to a reduced lifecycle cost of storage (LCOS). Improved longevity further enhances the long-term economic benefit.
• Site Planning: The higher energy density of ESS 2.0 reduces the required land footprint and installation overhead. This is particularly relevant for grid-connected sites in constrained urban or industrial areas.

Industry Trends & Alternatives

Globally, major manufacturers like Tesla (with its Megapack) and Fluence are also converging on liquid cooling for their utility-scale systems. The primary drivers for this trend are improved RTE, enhanced safety (better thermal runaway prevention), and longer asset life. However, air-cooled systems remain a viable, cost-effective option for less demanding applications in milder climates or where upfront cost is the primary driver.

Conclusion

In the Nordic region—where grid services demand precision, winter operation is non-negotiable, and land use is often restricted—liquid-cooled BESS systems like Huawei’s ESS 2.0 offer clear and compelling performance advantages. The benefits in efficiency, longevity, and operational reliability typically outweigh the higher initial investment.

Still, air-cooled designs may remain relevant for short-duration, less intensive applications where budget is the paramount concern.

Ultimately, system selection should be based on a holistic analysis of:

• Project duration and service profile (e.g., FCR, aFRR, peak shaving)
• Local climatic conditions and temperature extremes
• Available footprint and grid interconnection limits
• Long-term O&M strategy and LCOS priorities