LG Energy Solution Ltd. has landed a deal with US renewable energy infrastructure fund Excelsior Energy Capital (Excelsior) to supply a 7.5-Gigawatt hour (GWh) fully integrated energy storage system (ESS) about a month after its mega 8-GWh ESS supply order from another US firm Terra-Gen LLC.
South Korea’s largest lithium-ion battery producer announced on Friday that its US energy storage subsidiary LG Energy Solution Vertech Inc. in Texas has won a project from Excelsior to deliver a 7.5 GWh-capacity ESS, enough to power about 650,000 four-person households daily.
Under the multi-year deal estimated at 1.8 trillion won ($1.24 billion), LG Energy will start delivering the fully integrated lithium-ion energy storage system supported with lifecycle services in 2026.
The latest ESS order comes about one month after LG Energy Solution Vertech’s single biggest ESS deal, an 8-GWh ESS project with renewable energy producer Terra-Gen in November, since its establishment in 2022.
This was also LG Energy Solution’s third major ESS deal for this year, including a $1 billion contract signed in May to supply 4.8 GWh of ESS batteries to the US unit of Korea’s Hanwha Q Cells Co.
With the latest power grid ESS deal, LG Energy, also the world’s third-largest battery maker, will accelerate its advance into the US ESS market, which has been on the steady growth, to offset a slump in the electric vehicle market.
According to BloombergNEF, the global ESS market is expected to grow at an annual growth rate of 21% to 137 GW, or 442 GWh, by 2030. The US is the world’s second-largest ESS market after China.
BIG BET ON US ESS MARKET
Excelsior is a Minneapolis, Minnesota-based renewable energy infrastructure fund with a successful track record of making middle-market investments in wind, solar and battery storage plants across North America.
For the ESS deal with Excelsior, LG Energy Solution Vertech will supply the JF2 AC Link system powered by high-capacity lithium-ion phosphate battery (LFP) long cell, or ‘JF2’, batteries with enhanced performance and safety.
It is a modular type, providing customers freedom in design to meet different needs.
LG Energy Solution Vertech will also provide all system integration services, the AEROS software controls and analytics suite and related services to support the systems and operators throughout project lifecycles, the company said.
All the batteries and finished ESS products for the deal will be manufactured in the US.
The Korean parent is currently building a 7.2 trillion won battery complex in Arizona, its single largest investment in constructing its own battery manufacturing facility in the US.
The complex, on track to completion in two years, consists of two manufacturing facilities – one for cylindrical batteries used in EVs and the other for LFP pouch-type batteries for ESS.
The Korean battery giant acquired NEC Energy Solutions in 2022 and changed the name to LG Energy Solution Vertech after vertically merging battery manufacturing and energy storage system integration businesses.
LG Energy Solution logged the first-ever profit from its ESS business earlier this year, and it has set a target to more than triple ESS sales within the next five years.
Its ESS sales surpassed 2 trillion won in 2023.
By Hyung-Kyu Kim
khk@hankyung.com
Sookyung Seo edited this article.
