The South Korean government has selected LG Energy Solution as the operator for its energy storage system (ESS) project aimed at enhancing the power infrastructure in the Honam region.
On July 10, LG Energy Solution announced that it has been chosen as the operator for the '2026 AI-Driven ESS Construction Support Project' overseen by the Ministry of Climate, Energy, and Environment.
In collaboration with Shinhan Asset Management, LG Energy Solution participated in the project bid as part of the 'Sunlight Power Distribution Energy' consortium. A total of nine companies and 32 distribution lines were selected, with LG Energy Solution securing the maximum capacity of seven distribution lines (20MWh each, totaling 140MWh).
LG Energy Solution will be responsible for supplying high-performance batteries, constructing the ESS, and overseeing AI-based operations. Shinhan Asset Management will leverage its experience in solar fund management to establish a stable financial structure based on power market revenues. The commercial operation is set to begin in 2027, with a 20-year operational period.
This project marks the government's first initiative to support the construction of distribution network ESS. Currently, existing substations and distribution lines in regions like Honam and Jeju, where renewable energy is concentrated, are at capacity, leading to situations where power generation must be curtailed or connections delayed.
The target areas in Jeollanam-do and Jeollabuk-do are experiencing increased renewable energy connections due to the rise of small-scale solar installations, which have exceeded the allowable capacity of distribution lines, causing connection delays and output control issues.
The government aims to address these challenges by establishing ESS as a 'buffer' on distribution lines. LG Energy Solution plans to enhance the acceptance of renewable energy and the stability of the power system by applying advanced AI predictive algorithms and virtual power plant (VPP) platform technology.
This initiative will allow for the new connection of 40MW of solar power generation facilities currently waiting for connection, enabling the additional acceptance of 52.4GWh of renewable energy annually. Furthermore, LG Energy Solution intends to continuously convert solar power generation facilities into dispatchable resources to contribute to the stabilization of the power system in the Honam region.
“This project selection is a significant achievement in our transition from a battery supplier to an energy platform company,” said Kang Chang-beom, head of the ESS battery division at LG Energy Solution. “We will accelerate business growth by leveraging our AI-based ESS operational capabilities and contribute to stabilizing the national power grid.”
Meanwhile, LG Energy Solution reported an operating profit of 113.3 billion won in the second quarter, marking a return to profitability after a single quarter of losses.
* This article has been translated by AI.
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