Sungrow Energy Storage White Paper Foreword Amid the accelerating global energy transition, energy storage is evolving from a technological breakthrough tolarge-scale deployment, emerging as a strategic enabler for achieving carbon neutrality. At the same time, rapidindustry expansion is accompanied by increasingly complex safety and reliability challenges. Traditional single-layerprotections and short-term cost-driven approaches are no longer sufficient to address system-level risks, represent-ing a critical constraint on sustainable development. In response, leading authorities—including the International Electrotechnical Commission (IEC), the National Fire Pro-tection Association (NFPA), and China’ s National Energy Administration—have successively upgraded regulatoryframeworks, signaling the industry’ s shift toward “system-level, full-lifecycle” safety standards. As an independent third-party inspection, testing, and certification organization, TÜV Rheinland recognizes that certi-fication extends beyond compliance: it is a strategic safeguard for quality and safety. Throughout the full product life-cycle—from research and development to manufacturing, deployment, and eventual decommissioning—we applyrigorous, science-based methodologies with a global perspective. This approach not only provides authoritative veri-fication for products but also strengthens the industry’ s overall safety framework, facilitating the concurrentadvancement of innovation and risk management. The holistic safety concept presented in this white paper responds to the evolving safety requirements of the energystorage sector. In spatial terms, it ensures comprehensive protection from battery cells through to the power grid; intemporal terms, it establishes full-lifecycle oversight from development to decommissioning. Guided by technologyand grounded in responsibility, TÜV Rheinland remains committed to partnering with the industry to advance energystorage toward a high-quality, sustainable future. Weichun Li Senior Vice President,Solar & Commercial Products, Greater China, Global Power Electronics Business of TÜV Rheinland Contents Energy Storage Development Trends and Challenges3441.1Scaling Up: High-Capacity, High-Density Energy Storage Systems1.2Rising Challenges: Higher Risks in Large-Scale Plants Risk Landscape of Energy Storage Systems6 72.1Battery Level: Potential Thermal Runaway Risks 72.2 Electrical Level: Arc and Insulation Failure 82.3 System Level: Weak Fault Isolation and Coordination 82.4 Grid Level: Insufficient Stability and Support Capability Energy Storage All-Dimensional Safety Architecture10 113.1 Battery-Level Safety Architecture 163.2 Electrical-Level Safety Architecture 203.3 System-Level Safety Architecture 233.4 Plant-Level Safety Architecture 303.6 Full Lifecycle Safety Support System Conclusion37 Energy StorageDevelopment Trends and Challenges Scaling Up:High-Capacity, High-Density Energy Storage Systems1.1 From a market perspective, the global energy transition is accelerating. The integration of a high proportion of renewable energyis creating new opportunities for energy storage. According to BloombergNEF, global cumulative energy storage installedcapacity is expected to increase twelvefold by 2035 compared to 2024, reaching 7.3 TWh. At the product level, the capacities of individual battery cells, containers, and plants are continuously increasing. In 2021, thecapacity of mainstream cells was around 280 Ah, the capacity of individual containers was around 3 MWh, and the scale ofindividual plants was in the range of hundreds of MWh. By 2024, the capacity of battery cells has increased to over 500 Ah,the capacity of individual containers has exceeded 6 MWh, and the scale of individual plants has surpassed the GWh level. 1.2Rising Challenges: Higher Risks in Large-Scale Plants As energy storage expands, system safety has become an increasingly significant concern. Clean Energy Association (CEA)'s2024 statistics indicate that 70% of safety design defects in energy storage systems originate from the system and modules,while 30% stem from the cells. This not only exposes the widespread industry misconception that equates cell safety withoverall system safety, but also reflects the pervasive nature of system safety risks. According to public data, as of H1 2025, there have been 125 recorded energy storage fire incidents globally, posing severechallenges to life and property safety. Fire risks in energy storage systems span all levels, from battery and electrical components to the overall system, and persistthroughout the entire lifecycle, including transportation, installation, commissioning, grid connection, and long-term operation. 2021—Energy storage plant fire incident inChinaThermal runaway in batteries 2024—Energy storage plant fire incident in theUnited StatesFire suppression system defects 2021—Energy storage plant fire incident inAustraliaArcing 2024—PV-plus-storag