LG Energy Solution(373220) was selected as the operator for the government's first project to build distribution-grid energy storage systems (ESS) in the Honam region. The plan is to speed up its transition into an energy platform corporations by expanding its business scope beyond battery manufacturing and supply to ESS construction and operation.
LG Energy Solution said on the 10th that it was finally selected as the operator for the "2026 AI-utilized ESS construction support project" led by the Ministry of Climate, Energy and Environment.
LG Energy Solution formed the "Sunlight Distribution Grid Energy" consortium with Shinhan Asset Management and took part in the bid. In this round, a total of nine operators and 32 distribution lines were selected. LG Energy Solution secured all seven distribution lines, the maximum volume one operator can obtain. Each line has a capacity of 20 megawatt-hours (MWh), for a total of 140 MWh.
LG Energy Solution will handle high-performance battery supply as well as ESS construction and AI-based operations. Shinhan Asset Management, drawing on its experience operating solar funds, will be responsible for financial structuring based on electricity market revenue. Commercial operation will begin next year, and the operating period is 20 years.
This project is the government's first support initiative to build distribution-grid ESS. Its core is to install ESS on distribution lines to resolve interconnection delays and output curtailment issues arising in areas such as Honam and Jeju where renewable energy is concentrated.
Distribution-grid ESS is drawing attention as a key infrastructure for activating distributed energy because it can quickly boost grid hosting capacity in a short time without large-scale transmission expansion projects that require massive time and expense. When renewable generation is concentrated, the ESS stores power to reduce the load on the distribution grid, and conversely discharges power when electricity demand is concentrated or when there is spare capacity on the grid.
LG Energy Solution plans to apply AI forecasting algorithms and virtual power plant (VPP) platform technology to increase renewable energy acceptance and power system stability. It will newly connect 40 MW of regional solar power facilities that are awaiting interconnection, accommodating an additional 52.4 GWh of renewable energy annually.
In 2024, LG Energy Solution established a distribution-grid-connected ESS power plant in Seogwipo, Jeju, and since starting operations has steadily built AI-based ESS operating experience.
Kang Chang-beom, head of the ESS Battery Division at LG Energy Solution, said, "Being selected for this project is a meaningful achievement in the process of leaping beyond a battery supplier to an energy platform corporations," adding, "We will accelerate business growth by leveraging our AI-based ESS operating capabilities and contribute to stabilizing the national power grid."