Battery Giants Rush for 1 Trillion Won ESS Bidding
LG Energy Solution, Samsung SDI, SK On Compete with LFP, Safety Innovations Ahead of Korea Power Exchange Contract
The domestic battery industry, seeking a breakthrough in the ‘chasm (temporary demand stagnation)’ of electric vehicles and batteries, has intensified competition in the energy storage system (ESS) market, entering a race for leadership. In the North American market, LG Energy Solution, which has begun mass production, is driving performance improvements through ESS, while Samsung SDI secured a large order in the domestic ESS bidding market. SK On is also preparing to produce LFP (lithium iron phosphate) batteries for ESS domestically while emphasizing safety.
ESS, a Key Growth Axis Following Electric Vehicles’
Lee Seok-hee, CEO of SK On, stated during a CEO lecture at Yonsei University in Seoul on the 20th of last month,
The ESS business is a future core growth engine following electric vehicles, adding, We will expand our technological leadership in the global market through ESS tecnology.
ESS is a system that stores electricity generated by power plants and supplies it when needed, serving as essential infrastructure for solar and wind power, which produce electricity irregularly. With steady demand in North America and Europe, the market is projected to grow by over 20% annually through 2028, centered on power grids. Notably, the rapid expansion of AI (artificial intelligence) data centers in North America, which require stable large-scale power supply, is also driving ESS demand alongside infrastructure such as power plants and transmission/distribution networks.
The CEO particularly highlighted LFP (lithium iron phosphate) batteries, immersion cooling technology, and early fire suppression solutions as key ESS strategies.
He emphasized,
Safety and reliability are the top priorities in the battery business, and stated, We will expand our influence in the global ESS market based on safety that customers can trust.
Samsung SDI announced on the 21st that it signed a memorandum of understanding (MOU) with the Korea Electrical Safety Corporation on the 20th of last month to establish a ‘safe ESS ecosystem.’ The companies agreed to collaborate on strengthening safety verification systems and building standardized management systems to elevate industry-wide safety standards. Samsung SDI previously secured approximately 76% of the total volume in the Korea Power Exchange’s first ESS central contract market bidding, outperforming competitors. This success was attributed to its high domestic procurement ratio, as it produced all NCA (nickel-cobalt-aluminum) batteries at its Ulsan plant, earning high scores in industrial contribution evaluations.
LG Energy Solution is recognized as the first to achieve results in the North American ESS market. The company recorded an operating profit of 601.3 billion won in its third-quarter earnings announced on the 14th of last month, a 34% increase from the same period last year. Even excluding the U.S. AMPC (subsidies) effect, it achieved an operating profit of 235.8 billion won. Industry sources noted, “The full-scale shipment of residential ESS in North America was key to the performance improvement,” and added, “LG Energy Solution’s preemptive establishment of ESS production bases is a clear strength over competitors.” LG Energy Solution began mass production of ESS batteries at its Michigan plant in the U.S. in June, becoming the first global battery company to do so.
◇ Impending ‘1 Trillion Won KEPCO 2nd ESS Bidding’
The ESS competition among the three battery companies is expected to intensify with the Korea Power Exchange’s 1 trillion won second ESS central contract market bidding. The project involves constructing ESS facilities capable of 6-hour charge/discharge, totaling 540 MW (500 MW on the mainland and 40 MW in Jeju). In the first project of a similar scale, Samsung SDI secured approximately 76% with NCA (nickel-cobalt-aluminum) batteries, while LG Energy Solution won 24% with LFP batteries. The second contract is expected to be announced as early as this month, with preferred negotiators to be revealed around the end of this year.
LG Energy Solution plans to increase its ‘domestic production’ score by relocating LFP production lines from its Nanjing plant in China to South Korea or converting part of its Ochang plant’s production lines to ESS lines. SK On is also preparing by converting part of its Seosan plant’s electric vehicle battery production lines to LFP battery production.
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Battery Giants Rush for 1 Trillion Won ESS Bidding, source
