The second bid for the Energy Storage System (ESS) central contract market pushed by the government will begin soon. It comes two months after the results of the first bid were announced in Jul., drawing attention to whether Samsung SDI, which secured the largest volume at the time, will deliver again, or whether LG Energy Solution and SK On will succeed in a counterattack.
According to the battery industry on the 22nd, the Korea Power Exchange, which operates the ESS central contract market, held a "second ESS central contract market business meeting" last week and explained improvements to the first project and the direction for pushing the second phase.
The ESS central contract market was introduced to respond to volatility in the power grid caused by the expansion of renewable energy and to ease output control. The government first piloted the ESS central contract market in 2023 at three locations (68 megawatts, MW) on Jeju. It then announced the results of the first central contract market bid in Jul., in line with the goal in the 11th Basic Plan for Long-term Electricity Supply and Demand to "build a total of 2.22 gigawatts (GW) of ESS by 2029."
In the first bid, Samsung SDI secured the largest volume. Samsung SDI will supply ESS batteries to six of the eight total project sites. The six locations are Jindo, South Jeolla (48 MW), Goheung (96 MW), Muan (80 MW), Yeonggwang (80 MW), Anjwa (96 MW), and Hongnong (29 MW). LG Energy Solution will supply ESS batteries to the remaining two sites, Gwangyang, South Jeolla (96 MW), and Pyoseon, Jeju (40 MW). SK On did not win any orders.
At the time, Samsung SDI offered the condition of producing ternary (NCM) batteries in Ulsan and even lowered its bid price compared with LG Energy Solution and SK On, which put forward lithium iron phosphate (LFP) batteries that are cheaper than NCM.
If the selection criteria for the second bid are the same as the first, LG Energy Solution and SK On are likely to adopt measures that emphasize domestic production. LG Energy Solution has a plant in Ochang, North Chungcheong, and SK On has one in Seosan, South Chungcheong. An SK On official said, "Since we have verified the mass producibility of ESS-use LFP batteries at the Seosan plant, converting an electric-vehicle line to ESS-use LFP is also possible."