LG Energy wins 7.5GWh ESS project from Excelsior Energy in US

LG Energy Solution Ltd. has landed a deal with US renewable energy infrastructure fund Excelsior Energy Capital (Excelsior) to supply a 7.5-gigawatt hour (GWh) fully integrated energy storage system (ESS) about a month after its mega 8-GWh ESS supply order from another US firm Terra-Gen LLC.

South Korea’s largest lithium-ion battery producer announced on Friday that its US energy storage subsidiary LG Energy Solution Vertech Inc. in Texas has won a project from Excelsior to deliver a 7.5 GWh-capacity ESS, enough to power about 650,000 four-person households daily.

Under the multi-year deal estimated at 1.8 trillion won ($1.24 billion), LG Energy will start delivering the fully integrated lithium-ion energy storage system supported with lifecycle services in 2026.

The latest ESS order comes about one month after LG Energy Solution Vertech’s single biggest ESS deal, an 8-GWh ESS project signed with renewable energy producer Terra-Gen in November, since its establishment in 2022.

This was LG Energy Solution’s third major ESS deal of this year, the first being a $1 billion contract inked in May to supply 4.8 GWh of ESS batteries to the US unit of Korea’s Hanwha Q Cells Co.

With the latest power grid ESS deal, LG Energy, also the world’s third-largest battery maker, will accelerate its advance into the US ESS market on a steady growth trajectory, to offset a slump in the electric vehicle market.

According to BloombergNEF, the global ESS market is expected to reach an annual growth rate of 21% to 137 GW, or 442 GWh, by 2030. The US is the world’s second-largest ESS market after China.

BETTING BIG ON US ESS MARKET

Excelsior is a Minneapolis, Minnesota-based renewable energy infrastructure fund with a successful record of middle-market investments in wind, solar and battery storage plants across North America.

For the ESS deal with Excelsior, LG Energy Solution Vertech will supply the JF2 AC Link system powered by high-capacity lithium-ion phosphate battery (LFP) long cell, or "JF2," batteries with enhanced performance and safety.

These are modular-type batteries, a versatile design to meet customers' different needs.

LG Energy Solution Vertech will provide all system integration services, AEROS software controls and analytics suite and related services to support the systems and operators throughout the project's lifecycle, the company said.  

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

The Korean parent is currently building a 7.2 trillion won battery complex in Arizona, its single largest investment in constructing its own battery manufacturing facility in the US.

The complex, on track for completion in two years, consists of two manufacturing facilities – one for cylindrical batteries used in EVs and the other for LFP pouch-type batteries for the ESS.

The Korean battery giant acquired NEC Energy Solutions in 2022 and changed the name to LG Energy Solution Vertech after vertically merging its battery manufacturing and energy storage system integration businesses.

LG Energy Solution logged its 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.

Write to Hyung-Kyu Kim at khk@hankyung.com

Sookyung Seo edited this article.