VIEWPOINT: Battery Storage Is Going Vertical

The following Viewpoint is written by Eric Svahn, principal at SGA

Cities are where the highest electricity demand occurs as dense populations, commercial activity, and critical infrastructure draw heavily on the grid—often simultaneously. That strain is intensifying as electrification accelerates across buildings and transportation, and as extreme weather events drive sharp spikes in heating and cooling demand.

During these peak-load moments, grid systems are pushed to their limits, exposing vulnerabilities in transmission capacity and response times. In response, utilities are increasingly turning to utility-scale battery energy storage systems (BESS) that feed directly into the utility network, locating them closer to urban areas. 

For these facilities, proximity is critical. As urban demand continues to grow, locating utility-scale, grid-connected storage closer to dense urban areas can reduce transmission losses, deliver faster response during peak events, and strengthen overall grid reliability. However, the open land required for traditional field installations simply isn’t available in metro areas—forcing developers to rethink how BESS are built. 

Why Traditional Battery Storage Doesn’t Work in Cities

BESS have typically been designed as horizontal, containerized installations with rows of units spread across large, open parcels of land in suburban or greenfield settings—typically triple the land of vertical equivalents. These layouts depend on ample space with limited surrounding development, conditions that are increasingly rare in dense urban environments.

In cities, available land is scarce and expensive, zoning regulations are more complex, and sites must compete with higher-value uses such as housing or commercial development. Furthermore, battery storage works best when located close to an electrical substation, because that’s where power connects to the grid. However, in dense metro areas, land near substations is often scarce, built out, or zoned for other uses. As a result, the traditional model of battery storage doesn't translate to the realities of cities, making clear that the only viable option is building up.

Building vertically is a new approach, and many municipalities haven’t even encountered it or had it presented to them. Reconfiguring the traditional approach, vertical battery storage facilities are multi-story, enclosed facilities, particularly designed for the restrictions of urban environments. By stacking batteries, land use is reduced, making a smaller lot more feasible. 

Engineering the Stacked System

Vertical BESS represents a fundamental shift in both infrastructure planning and building design. These facilities are highly organized systems where every component’s placement affects performance, safety, and efficiency. In a stacked configuration, batteries generate DC (direct current) power that travels through cabling to inverter banks, which convert it to AC (alternating current) and feed transformers that increase the voltage to match grid requirements. Optimizing these pathways is critical for reliability. Short, logical circuits reduce energy loss and ensure the system can respond quickly to peak-load events.

Stacking batteries also introduces structural and spatial challenges. Racks weighing tens of thousands of pounds must be supported by reinforced slabs and structural systems, with floor-to-floor heights designed to accommodate cabling, piping, and ventilation. Thermal management, explosion prevention, and separation between battery rooms and control spaces are carefully engineered to keep the facility safe and resilient. In essence, the building functions like a circuit board where each element, from battery rack to transformer to cabling, is positioned for maximum efficiency and reliability.

Sustainability Benefits

BESS play a critical role in advancing the sustainability of the electric grid. By storing excess energy from renewable sources like solar and wind when generation is high and releasing it when demand peaks, BESS help reduce reliance on fossil-fuel power plants and smooths the variability of renewables. Storage also shifts electricity use to times when low-carbon power is available, avoiding the need to run backup fossil generators and lowering overall CO₂ and pollutant emissions.

By storing energy when it’s cheap or clean and discharging when it’s expensive or dirty, BESS help optimize energy use pattern, slower costs, and reduce overall emissions. Their fast response also enables ancillary services, such as frequency regulation and voltage support, that enhance grid reliability without burning fuel.

As new energy codes are revised to meet carbon reduction goals, building systems are increasingly required to be fully electrified. BESS play a key role in enabling this transition. By providing flexibility and grid support, BESS help ensure that electrification goals can be met with clean, low-carbon energy rather than fossil-fuel backups, making compliance with sustainability codes practical and effective.

Navigating Municipal and Regulatory Unknowns

Incorporating the BESS into an enclosed building is a new frontier. Few have been built, and they proposed new issues regarding fire protection by local municipalities. Municipalities in denser communities are skeptical about the benefits and the hazards that these BESS systems bring or can create. Zoning codes, building classifications, and permitting processes were typically written for conventional industrial buildings or horizontal, containerized systems, leaving gaps when projects propose multi-story, enclosed battery facilities.

Successfully navigating these regulatory unknowns requires extensive coordination and education. Architects, engineers, and code consultants play a critical role in guiding city officials, fire departments, and utility stakeholders through the design, safety, and operational principles of stacked BESS. 

For example, fighting a lithium-ion battery fire, whether in an electric vehicle (EV) or a building BESS, is very different from fighting a typical gasoline or electrical fire. The main concern is thermal runaway — a chain reaction inside the battery cells that can cause re-ignition hours later. Current firefighting strategies for EV fires involve pulling the car to an isolated area and pouring water on it to keep it cool and contained. Car batteries are well protected inside the vehicle, making it more difficult to extinguish. In a building, the batteries are extremely heavy and cannot be moved. Fire protection systems are therefore designed as high-hazard, with increased water flow. If a building BESS catches fire, firefighters are unlikely to enter the battery room. Instead, they would suppress the fire from outside the space. The high volume of water, from the high-hazard sprinkler system and the additional hose streams, would require effective drainage and removal from the room.

Beyond on-site fire response considerations, battery systems must undergo compartmentalized testing before deployment. The exact battery configuration is assembled and then stress-tested—typically by overloading a battery and initiating a fire—to evaluate system performance under failure conditions. A BESS is made up of smaller, brick-sized batteries, arranged on shelves, and stacked into racks—making containment strategy central to overall system safety. The stress test results provide data on how effectively thermal events are contained, measuring whether a fire spreads from one try and one rack to another.

Vertical BESS projects are also accelerating the shift away from traditional design-bid-build toward integrated EPC (engineering-procurement-construction) and construction management-led delivery models, where design, procurement, and construction occur in parallel. This is to accommodate the rapidly evolving technology and high complexity of urban battery systems, allowing the project to adapt to site-specific conditions, regulatory requirements, and operational constraints without delays. 

A New Frontier

Unlike traditional industrial buildings, vertical BESS must accommodate highly technical systems while responding to site constraints, zoning regulations, and community concerns. By treating energy storage as both a building and an infrastructure system, architects help ensure that vertical BESS projects are operationally efficient, integrated, and contextually appropriate for the urban environment. 

Transforming how cities manage and deliver energy, these facilities allow utilities to manipulate energy flows more efficiently while providing customers with lower costs, reliability, and cleaner, smarter energy management. As urban populations and electrification continue to grow, the need for energy storage near demand centers will only increase, making vertical facilities an attractive and practical solution for cities moving forward. 

Eric Svahn, principal at SGA, concentrates on the commercial and life sciences markets. Although he is involved in every project phase, his specialty is construction documentation and construction administration.