LG Energy Solution's ESS division posts first-ever profit

LG Energy Solution Ltd.'s energy storage system (ESS) division posted its first-ever profit on the back of growing replacement demand and new construction of power grids in the US, according to battery industry sources on Tuesday.

The South Korean battery maker is said to have earned an operating profit of 10 billion to 20 billion won ($7.5 million-$15 million) from ESS sales in 2023, compared with the prior year’s loss of 200 billion won.

ESS sales surpassed 2 trillion won in 2023.

LG Energy Solution made up the lion’s share of some 120,000 battery ESS used for the Edwards & Sanborn Solar and Energy Storage project in California, completed last month.

It is an integrated solar and battery energy storage project and the largest of its kind in the US.

LG Energy Solution Vertech Inc., a Texas-based ESS supplier, has secured a combined 10-gigawatt hours (GWh) of grid-scale battery ESS projects from the US since its establishment in early 2022, the company said last month.

LG Energy stands to benefit from rising investments in renewable energy in the US, alongside replacement demand for aging power grids.

Given the string of solar and wind energy storage facilities in the pipeline in the US, it is building a battery ESS-dedicated plant in Arizona with an investment of 3 trillion won, where it plans to roll out lithium iron phosphate batteries.

It is aiming to more than triple ESS sales within the next five years.

“We’re considering building an additional ESS plant,” said an LG Energy official, without elaborating on its location and investment plan.

Buoyed by rising sales, it hired a large number of new employees to boost development, production and marketing for ESS late last year.

LG Energy is the largest player in the electric vehicle battery market, excluding China.

Its Korean peers are following suit.

Samsung SDI Co. is ramping up sales of the Samsung Battery Box (SBB), a battery storage system with enhanced storage density and temperature stability.

SBB encases battery cells and modules for an ESS in a single box. It is built with nickel, cobalt and aluminum (NCA) cathodes with high nickel content.

SK On Co. is looking to build an ESS-dedicated plant in North America to jump into the burgeoning market.

Write to Sang-Hoon Sung at uphoon@hankyung.com
 


Yeonhee Kim edited this article.