LG Energy bags 8-GWh ESS deal from Terra-Gen in US

LG Energy Solution Ltd. will supply US renewable energy power producer Terra-Gen LLC with an energy storage system (ESS) with an 8 Gigawatt-hour (GWh) capacity in what would be the biggest deal for its US ESS subsidiary since its launch in 2022.

South Korea’s largest battery producer announced on Thursday that LG Energy Solution Vertech Inc., its Texas-based US energy storage unit, has won a project from Terra-Gen to deliver an 8 GWh-capacity ESS, enough to power about 800,000 households daily, from 2026 to 2029.

The two companies did not disclose the financial terms of the deal.

But based on power output, the deal marks the biggest single order for LG Energy Solution Vertech since its establishment in 2022 when the Korean battery giant acquired NEC Energy Solutions to vertically merge battery manufacturing and energy storage system integration.

This is also LG Energy Solution Vertech’s second ESS project for Terra-Gen after their 2.2-GWh ESS project in California.

The latest order is expected to enhance further the Korean battery maker’s presence in the US ESS market.

The Korean parent, also the world’s third-largest battery maker, is currently building a 7.2 trillion won ($5.1 billion) 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 electric vehicles and the other for lithium iron phosphate (LFP) pouch-type batteries used in ESS.

MADE IN US

LG Energy Solution Vertech will supply its ‘New Modularized Solutions’ powered by high-capacity LFP long cell, or ‘JF2’, batteries.

Its design and structure can be customized based on a customer’s needs, the company said.

All the batteries and finished ESS products for the deal will be manufactured in the US.

LG Energy Solution Vertech will also supply hardware integration, system controls software and related services, including the AEROS software suite, which can be deployed to all sites to provide customers with both onsite monitoring services and cloud-based site performance analytics.

LG Energy Solution is upping the ante in the global ESS market, especially the burgeoning US ESS market, in hopes of offsetting the prolonged electric vehicle chasm.

The company 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.

It pins high hopes on the US ESS market amid growing investments in renewable energy in the country, alongside replacement demand for aging power grids.

LG Energy Solution stands to benefit from the string of solar and wind energy storage facilities in the pipeline in the US.

Write to Hyung-Kyu Kim at khk@hankyung.com
Sookyung Seo edited this article.