Korea – Battery giants brace for high-stakes rematch in W1tr ESS bid
Competition is heating up among South Korean battery firms, as they prepare for a 1 trillion won ($720 million) second round of government-led bidding for large-scale energy storage systems.
At stake is not only market share at home, but also a springboard for global expansion, as winning contracts is expected to help validate product safety and performance in overseas tenders.
The Korea Power Exchange confirmed it will open bidding next month for 540 megawatts of ESS capacity, mirroring the size of the first round, with all projects scheduled for completion by December 2027.
Samsung SDI dominated the inaugural tender earlier this year, clinching six of eight projects, totaling 429 megawatts, while LG Energy Solution secured the remaining two, in South Jeolla Province and Jeju Island. The results set the stage for a high-stakes rematch, as LG Energy Solution and SK On aim to reclaim ground and strengthen their footing in the strategically vital ESS sector.
Emphasis on safety, industry impact
While the overall bidding framework will remain largely the same as for the first contracts, Cho Se-chul, head of the leading market team at the Korea Power Exchange, said the agency plans to revise the pricing criteria.
The goal is to reduce the heavy weighting on cost and place greater emphasis on factors such as grid connectivity, industrial and economic contributions, fire-safety measures and technological capability.
In the first round, Samsung SDI was reported to have gained an advantage in both price and nonprice categories by deploying an aggressive pricing strategy for its typically more expensive, high-capacity nickel cobalt aluminum, or NCA, batteries, effectively undercutting LG and SK’s lithium iron phosphate, or LFP, offerings. The company also highlighted its contribution to the domestic economy by producing most of its ESS battery cells at its Ulsan plant.
Moving ESS lines into Korea
Challenging Samsung SDI, LG Energy Solution and SK On are weighing plans to establish domestic production lines for LFP ESS batteries.
Both companies already lead Samsung in LFP-based ESS supply, though their focus has been on the rapidly expanding North American market. LG Energy Solution began mass-producing LFP ESS pouch cells at its Michigan plant in June, while SK On is preparing a large-scale launch next year at its Georgia facility.
To secure the advantage in nonprice evaluation criteria, LG Energy Solution is reportedly considering converting part of its nickel cobalt manganese ESS battery line to LFP products by relocating equipment from its plant in Nanjing, China, rather than making new investments.
An industry source familiar with the matter on condition of anonymity, said:
SK On is looking into shifting a portion of its electric vehicle battery production line in Seosan (South Chungcheong Province) to ESS,
“This will likely highlight the company’s commitment to boosting domestic industry and economy.”
LG Energy Solution and SK On declined to comment on the matter, citing confidentiality.
Containing battery fires
LG Energy Solution and SK On are also moving to underscore their fire-spread prevention measures for LFP batteries, which are generally seen as more effective in curbing battery fires than NCA-based products.
In the first bidding round, however, Samsung SDI was said to have recorded a high score in the nonprice evaluation by showcasing its thermal propagation prevention system that injects fire-suppressing agents through pipes connected directly to ESS battery modules.
LG Energy Solution’s LFP products have cleared the stringent UL 9540A test conducted by UL Solutions, a Seoul-based safety certification body, and demonstrated the ability to block fire propagation at the module level. They also passed large-scale fire simulation trials mandated under major ESS safety standards, including the US National Fire Protection Association’s NFPA 855 and international fire codes.
SK On’s thermal propagation prevention technology has similarly secured North American fire safety certification, complemented by a liquid cooling system that evens out cell temperatures and improves charge-discharge efficiency.
Notably, LG Energy Solution faces high stakes in the second round of bidding, with industry insiders noting that expectations had already been high in the first round, given its stronger domestic ESS record compared with Samsung SDI. That record includes a 2023 consortium win for the long-duration ESS project on Jeju Island, valued at around 200 billion won.
Lee Ho-geun, a car engineering professor at Daeduk University, said:
In the second contract round, LG Energy Solution and SK On are expected to capture a significant share by refining their bidding strategies
“Government-backed ESS projects in Korea are strategically important, as they allow battery-makers to build a track record that enhances competitiveness in global tenders, particularly in North America. Proven domestic supply also serves as critical validation of product performance, efficiency and safety.”
READ the latest Batteries News shaping the battery market
Korea – Battery giants brace for high-stakes rematch in W1tr ESS bid, source
