SK D&D and SK gas announced on Jan. 16 that they have established a joint venture, SA Grid Solutions, with Apex Clean Energy, a U.S.-based renewable energy company, and signed an investment agreement for an Energy Storage System (ESS) business.
Previously, in December 2023, SK D&D and SK gas founded a local subsidiary in the U.S. named Gridflex. The joint venture is formed between Gridflex and Apex, with an investment amount of 69.7 billion won (US$52.0 million) from SK Gas and 17.4 billion won from SK D&D, totaling 87.1 billion won. The equity stake distribution is 60% for Gridflex and 40% for Apex.
SK D&D and SK gas plan to expand their business domains from domestic gas and power generation to overseas renewable energy, thereby securing additional growth momentum.
SK gas is expected to enhance its value as a comprehensive energy company by adding U.S. ESS projects to its business portfolio, which includes the LNG/LPG dual power plant Ulsan GPS and KET’s LNG terminal scheduled for commercial operation this year. This move also diversifies the company’s existing business model into renewable energy.
The first project investment location has been selected as the state of Texas in the U.S. About 200 MW of ESS facilities are planned to be installed, with phased commercial operation beginning in September this year. This 200 MW capacity can charge and discharge electricity for approximately 39,000 households per day.
Particularly, the U.S. ESS business is expected to have higher profitability due to relatively lower construction and operational risks compared to domestic energy infrastructure projects. Most of the ESS business’s revenue is generated through real-time power trading, and SK gas plans to achieve high profitability by leveraging its 35-year expertise in gas trading. As the leading ESS operator in Korea with 800 MWh across 29 locations, SK D&D will support the initial infrastructure setup and optimize operations using its construction and operational expertise.
SK D&D and SK gas plan to expand into other regions from Texas, aiming to increase the ESS capacity to 1 GW and explore renewable energy business opportunities in the U.S. They anticipate leading the market by utilizing their accumulated ESS operation and power trading capabilities in the long term, especially with the increasing domestic renewable energy distribution and the opening of the electricity trading market.