LG Elec., GS EPS join forces to produce, use solar power in Korea

LG Electronic Inc. is set to produce solar energy to support 10% of the annual electricity consumption at its Changwon plant in South Korea.

The firm signed a memorandum of understanding with GS EPS Co., GS Group’s energy producer, for a power purchase agreement (PPA) for utility procurement in a non-interactive mode on Sept. 16, LG Electronics said on Sept. 18.  

By installing 10,000 panels with an aggregate size of 20,000 square meters on the roof of LG Smart Park, the Changwon-based factory, the facilities will generate 6,600-megawatt hours (MWh) of solar energy a year, LG Electronics said.

This will eliminate 3,000 tons of greenhouse gas emissions per year, equivalent to the effect of planting 20,000 trees, the home appliance giant added.

GS EPS will set up and operate the renewables plant while LG is planning to buy the power from the factory.

The contract marks Korea's first renewables generation in a non-interactive mode in Korea, which is to directly trade energy between the producer and user without transmission and distribution from state-run KEPCO, or Korea Electric Power Corp.

Through the agreement, LG Electronics and GS EPS will bypass some costs such as KEPCO’s grid usage and electrical wiring installment fees.

The solar energy project will comply with the global RE100 initiative, which is to use 100% renewables for electricity by 2025, as well as be a new business model of trading electricity at more reasonable prices in Korea, LG Electronics said.

In July 2021, the home appliance giant declared it will make a complete transition into renewables for its operations both in Korea and abroad by 2050. The company will switch to 100% renewables by 2025 at all the facilities overseas, it said at the time. 

In February of this year, LG Electronics said it will close its solar panel business in the face of deepening competition and sluggish sales.

It entered the solar cell and module manufacturing business in 2010. However, the business accounted for only 1.5% of the company's revenue with a 1% share in the global market as of February.

Write to Sung-Soo Bae at baebae@hankyung.com
Jihyun Kim edited this article.