The top three domestic battery companies in South Korea are focusing on nurturing the energy storage system (ESS) sector to secure mid-to-long-term growth drivers. This move comes as global electric vehicle demand begins to slow, prompting these companies to shift their focus from quantitative to qualitative growth through business diversification.
According to SNE Research on Dec. 13, the global ESS market is expected to grow more than tenfold, from 39.2 gigawatt-hours (GWh) in 2022 to 356.6 GWh by 2030. The North American ESS market is anticipated to expand from 14.1 GWh in 2021 to 159.2 GWh by 2030.
In particular, the U.S. Energy Information Administration (EIA) foresees that the share of renewable energy in total U.S. power generation could grow from 21% in 2020 to 44% by 2050, following policies to increase the use of renewable energy. This increase in the renewable energy market is expected to simultaneously drive growth in the ESS market.
LG Energy Solution plans to invest a total of 3 trillion won to mass-produce pouch-type LFP batteries for ESS by 2026 at its Arizona factory, which is being constructed with a capacity of 16 GWh. The company aims to increase its ESS division’s sales to 5 trillion won within five years. Efforts include strengthening the local supply chain system for key raw materials and components used in battery cells, packs, and containers, and developing integrated system solutions encompassing the entire business spectrum from ESS supply, project planning, design, installation, maintenance, and repair.
In the ESS field, Samsung SDI, a traditional powerhouse, recently unveiled the SBB, a box-type configuration of internal battery cells and modules for ESS. The company is developing ESS-specific LFP with the goal of mass production by 2026. Currently producing ESS products in Ulsan and Xi’an, China, Samsung SDI is poised to further expand its ESS business in North America and Europe as these markets continue to grow, with plans for expansion in the U.S. or Europe becoming more concrete next year.
SK on is also actively pursuing the ESS business. Since starting collaboration in 2021 with the U.S. ESS company IHI Terrasun Solutions, SK on has been focusing on ESS and renewable-energy-linked ESS projects in North America. With a mid-to-long-term perspective, SK on plans to introduce differentiated products such as ESS for vehicle charging and maritime applications, and ESS incorporating new technologies to enhance fire safety, thereby establishing its competitive edge as a latecomer in the market.