LG Energy Solution is expediting its penetration of the U.S. energy storage system (ESS) market by building a local production base and supply chain behind advanced technologies. The Korean battery giant plans to more than triple its sales in the ESS business within the next five years.
LG Energy Solution announced on Sept. 12 that it will participate in the renewable ESS exhibition “Re+ 2023” in Las Vegas, Nevada, the United States from Sept. 11 to 14 (local time), announcing four core business strategies to secure competitiveness in the ESS market and showcasing its latest products and technologies.
The global ESS market is expected to grow rapidly as countries are expanding their support for their ESS industries. In particular, the U.S. market is expected to grow steeply due to the Inflation Reduction Act (IRA). According to energy research firm Wood Mackenzie, the North American ESS market, which stood at a mere 12 GWh last year, is expected to grow nearly 10 times to 103 GWh in 2030.
To secure its leadership in the U.S. market, LG Energy Solution has established four core business strategies -- operating large battery plants, strengthening its supply chain system, developing advanced lithium-phosphate-iron (LFP) battery technology, and expanding its system integration (SI) capabilities.
First, LG Energy Solution plans to expand strategic partnerships with U.S. corporate customers through its Arizona plant, the first large-scale battery production base for ESS in the United States. The plant to be built with a capacity of 16 GWh with a total investment of 3 trillion won will produce pouch-type LFP batteries independently developed by LG Energy Solution. The plant will start full-scale mass production of batteries beginning from 2026.
LG Energy Solution will also strengthen its local supply chain system for core raw materials and components used in battery cell production, packs, and containers in the United States. This will help customers take advantage of the IRA tax credit program.
The Korean battery maker will also expand its product portfolio with advanced battery technology for LFP batteries with high reliability, efficiency, and long life. It will also strengthen its SI capabilities. It will increase its capabilities in system integration solutions covering all aspects of the ESS business from ESS supply to planning, design, installation, maintenance, and repairs, and expand its business to software services that enable real-time monitoring, prediction, and maintenance. To this end, the company also set up LG Energy Solution Vertech, an ESS SI company, in the United States last year.
“Based on our proven production capacity and differentiated ESS technology competitiveness, we will more than triple sales in our ESS business within five years,” said Jang Seung-se, executive vice president of the ESS Business Division. “In particular, we decided to invest 3 trillion won in a new LFP battery plant for ESSs in Arizona earlier this year to focus on the U.S. market with huge growth potential, and more investments will be made in the United States in the future.”
More than 1,300 leading renewable energy and ESS companies from around the world participated in Re+ 2023. LG Energy Solution showcased a modular, water-cooled container product for a power grid with 4.76 MWh LFP cells. The product is characterized by reduced maintenance costs and increased battery lifespan. Moreover, using a modular philosophy can provide optimal energy by reflecting the needs of customers by taking the environment and regulations into account.