For years, battery innovation has largely been measured by improvements in chemistry. Increasingly, companies believe the next gains will come from software.

Those themes emerged during a recent Barclays energy transition roundtable marking the tenth anniversary of Unreasonable Impact, Barclays’ programme supporting high-growth climate technology businesses. Investors, entrepreneurs and sustainable finance specialists discussed how software, battery management systems and repurposed EV batteries could improve battery performance while helping electricity systems make better use of renewable generation.  

Although the technologies differ, they share a common objective. For example, Brill Power, an Oxford University spin-out company, has developed battery management software that optimises the performance of individual battery cells, extending battery life and improving utilisation. Meanwhile, Connected Energy repurposes EV batteries that are no longer suitable for transport, deploying them in stationary energy storage systems without modifying the batteries themselves. Both approaches are designed to increase the value each battery delivers over its operating life.  

The discussion also reflected a broader shift in the battery market. Manufacturing capacity continues to expand, but participants argued that the next phase of innovation will depend increasingly on how battery systems are managed, integrated and deployed. As battery manufacturing continues to scale, the industry’s next opportunity may lie less in producing more batteries than in making better use of the batteries already in service.  

Software can unlock more from every battery

A battery pack is only as strong as its weakest-performing cells. Although individual cells may be manufactured together, they do not all age at the same rate. Over time, differences in temperature, charging cycles and operating conditions cause some cells to degrade faster than others, limiting the performance of the entire battery pack.  

This is the problem Brill Power set out to solve. Rather than treating every cell identically, its battery management system continuously monitors the condition of individual cells and adjusts the current supplied to each one according to its health profile. By balancing the performance of stronger and weaker cells, the system improves utilisation while helping extend battery life and reduce ownership costs.

As Christoph Birkl, CEO and Founder of Brill Power, explained, the technology was developed after researchers at the University of Oxford recognised that battery utilisation was often constrained by individual cells. ‘Our technology wants to avoid that weakest link issue,’ he said.  

Birkl said he believes that this is where companies outside the world’s largest battery manufacturers can compete. Rather than trying to produce lower-cost battery cells, he argued that opportunities increasingly lie in the software and control systems that improve battery performance. As he put it, the aim is to make batteries “not just cheap but also smart”.  

An EV battery’s useful life doesn’t end on the road

When an EV battery loses around 20% of its capacity, it may no longer deliver the driving range motorists expect. That does not mean the battery has reached the end of its useful life, however. For less demanding applications, such as stationary energy storage, it can continue operating for many years.  

This is the opportunity Connected Energy, a specialist in repurposing electric vehicle batteries for stationary energy storage, has built its business around. Rather than dismantling or rebuilding batteries removed from vehicles, the company redeploys them in commercial energy storage systems without modifying the battery packs themselves.  

Like Brill Power, Connected Energy’s competitive advantage lies in software. Its control systems enable batteries with different operating histories and health profiles to operate safely and effectively within the same stationary energy storage system. This extends battery life while reducing the cost of deploying energy storage.  

The commercial opportunity is growing as larger numbers of electric vehicle batteries reach the end of their automotive lives. Connected Energy has already developed a pipeline of 700MWh of stationary energy storage projects scheduled for deployment over the next three to four years, illustrating how quickly the market for repurposed batteries is expected to expand.  

Why smarter batteries matter now

The technologies discussed at the roundtable are designed to address a wider challenge facing electricity systems. As renewable generation increases and electricity demand grows, networks need greater flexibility to balance supply and demand. Battery storage will play an important role, but participants argued that software and intelligent controls will be equally important in determining how effectively those batteries perform.  

‘Last year in the UK, we curtailed 10TWh of clean power from North Sea offshore wind.’ – Daniel Hanna, Group Head of Sustainable and Transition Finance, Barclays

Daniel Hanna, Group Head of Sustainable and Transition Finance at Barclays, illustrated the scale of the challenge by noting that around 10 TWh of electricity generated by UK offshore wind farms was curtailed last year because the grid could not absorb it. Making better use of renewable generation will require more storage capacity, but also battery systems capable of responding quickly to changing conditions on the network. 

Demand for that flexibility is also increasing. Damian Payiatakis, Head of Impact Investing for Barclays Private Bank and Wealth Management, identified energy security, energy affordability and rising electricity demand from AI and data centres as key drivers of battery investment. Batteries are no longer viewed simply as storage assets. They are increasingly expected to help balance electricity networks, support renewable generation and respond to changing patterns of demand.  

For Payiatakis, that calls for a broader approach to planning energy infrastructure. Rather than funding individual technologies in isolation, he argued that governments and investors should consider how generation, storage and electricity networks work together as a system.  

Energy bottlenecks are changing

Producing battery cells is no longer the only challenge. Participants argued that delivering battery storage projects increasingly depends on the infrastructure, equipment and supply chains that sit around them. Global manufacturing capacity for battery cells now exceeds demand, but delays to relatively ordinary components can still slow projects significantly.  

Birkl rejected the idea that battery cells themselves are in short supply. Instead, he pointed to the complexity of the wider supply chain, where delays to relatively ordinary components can hold up entire projects. Matthew Lumsden, CEO and Co-Founder of Connected Energy, highlighted long lead times for electrical equipment such as industrial transformers, fuses and sockets, noting that some components can now take up to three years to procure. Delivering battery storage projects, he argued, increasingly depends on managing every part of the supply chain rather than simply securing battery cells.  

Participants also argued that regulation has not always kept pace with new business models. Lumsden noted that current policy often treats battery repurposing, reuse and recycling as a single activity, despite each playing a different role in the circular economy. As a result, incentives intended to encourage sustainable investment do not always support companies extending the useful life of EV batteries through stationary energy storage.  

For the panel, these challenges reinforce a broader point. As battery technology becomes more mature, commercial success will depend increasingly on integrating software, infrastructure, regulation and supply chains into a coherent energy system rather than improving battery chemistry alone.  

Better systems, not just better batteries

Throughout the discussion, participants returned to the same conclusion: improving battery performance remains important, but no single technology will solve every challenge facing modern electricity systems. Different storage technologies, software platforms and control systems each have a role to play, depending on whether the priority is balancing short-term fluctuations, storing renewable generation for longer periods or improving network resilience.  

Payiatakis argued that the starting point should be the problem being solved rather than the technology itself. Instead of assuming lithium-ion batteries are always the answer, he suggested governments, investors and developers should consider how different technologies work together within the wider electricity system. Hanna pointed to Barclays’ investment in Energy Dome, whose compressed CO₂ technology can provide more than 12 hours of energy storage. He cited it as an example of how different storage technologies are likely to play complementary roles as electricity systems become more dependent on renewable generation.  

For Birkl, that systems perspective also defines where future innovation is likely to emerge. ‘When you talk about batteries, there are cells and there are systems,’ he observed. ‘Everything beyond the cell leaves a lot of room for innovation.’  

The future of battery innovation

The discussion began with software, but it ended somewhere much broader. Battery chemistry will continue to improve, yet participants argued that future gains will increasingly depend on how batteries are managed, connected and deployed within the wider electricity system. As renewable generation expands and electricity networks become more complex, extracting more value from every battery may prove just as important as producing the next generation of battery cells.

• Further reading: 'Balancing the boom: how European grids are adapting to abundant solar power' . Europe’s solar expansion has exceeded expectations, helping to reduce emissions and strengthen energy security. But as rooftop and utility-scale generation continue to grow, grid operators, policymakers and consumers are confronting the challenge of managing periods when electricity supply exceeds demand, writes Charlie Bush. 
• 'Electrification and security: two big themes emerge from the latest Statistical Review of World Energy’. Leaders of the Energy Institute and partners recently discussed the findings of the 2026 Energy Institute Statistical Review of World Energy, which launched on 30 June. The Statistical Review is produced by the Energy Institute with Ember and in collaboration with KPMG and Kearney. New Energy World Senior Editor Will Dalrymple MEI reports.