SK E&S acquires US energy firm KCE, to invest $600 mn for expansion

SK E&S Co., the natural gas business unit of SK Group, has acquired Key Capture Energy LLC (KCE), a US operator of energy storage projects, as the South Korean company aims to expand its presence in one of the world’s largest grid solutions markets.

SK E&S, Korea’s top city gas supplier, said on Thursday it will invest $600 million over the next two to three years to complete the acquisition of a 95% stake in KCE and undertake new energy-related projects in America.

Headquartered in Albany, New York, KCE develops, constructs and operates energy storage solutions to promote the deployment of renewable energy. The company aims to have more than 1 gigawatt (GW) of battery storage projects in operation in New York, New England and Texas by the end of 2023.

Currently, KCE has 254 megawatts of standalone energy storage projects under construction or operation, and a development pipeline of 3,000 MW of storage projects across America. It posted $10 million in revenue last year.

SK said it hopes the acquisition will help it build a market-leading energy storage and clean energy platform in the US.

“We expect KCE’s energy solution services to greatly contribute to cutting greenhouse gas emissions by enhancing the efficiency of power generation and use,” said SK E&S Vice Chairman and CEO Yu Jeong-joon.

Established in 2016, KCE is one of the leading grid solution providers in the US.

GRID SOLUTIONS

Grid solution is an emerging industry that combines energy storage systems (ESS) linked to transmission and distribution networks with artificial intelligence technology to ensure a stable power supply.

According to global energy research and consultancy firm Wood Mackenzie, the ESS-based grid solution industry in the US is forecast to grow at an average annual rate of 60% to 76 GW by 2030 from 6 GW this year.

SK E&S said it will grow KCE as the top energy solution provider in the US by 2025 by leveraging SK Group’s expertise in large-scale power trading and battery and software capabilities.

SK Group, whose energy portfolio ranges from refineries, natural gas and batteries to renewable energy, said in December that it is fostering the hydrogen and renewable energy businesses as its future growth engines.

The acquisition of KCE is part of SK’s efforts to expand its eco-friendly energy business portfolio in the US.

As part of its hydrogen push, SK Inc, the holding firm of the group, and SK E&S earlier this year invested a combined $1.5 billion to acquire a controlling stake in US hydrogen fuel cell maker Plug Power Inc.

Earlier this month, SK E&S CEO Choo Hyeong-wook said it aims to turn into an eco-friendly company with an enterprise value of 35 trillion won ($30 billion) by 2025 with its business focus on four key sectors – hydrogen, renewable energy, energy solutions and eco-friendly liquefied natural gas (LNG).

Write to Jeong-Min Nam at peux@hankyung.com
In-Soo Nam edited this article.