"Data Centers Ignite ESS Order Rally Expectations for This Company [Weekend Money]"

"Oracle's Power Investments Expand, ESS Market Set to Grow"
LG Energy Solution Eyes Over 70 GWh in New Orders

There is analysis suggesting that LG Energy Solution is entering a phase of business reassessment for its energy storage system (ESS) business amid expectations that it will benefit from the expansion of North American data center power infrastructure. In particular, the potential for large-scale new ESS orders in the second half of the year, combined with expectations of a return to profitability in the second half, is being evaluated as a key catalyst for stock price growth.

Minwoo Joo, an analyst at NH Investment & Securities, stated in a recent report on LG Energy Solution, "If large-scale orders and a return to profitability are achieved in the second half, it will serve as a catalyst for the stock price to rise."

According to industry sources, LG Energy Solution's North American subsidiary, Vertech, has signed a contract to supply battery energy storage systems (BESS) worth approximately $1.6 billion to the U.S. power company DTE Energy. The supply volume amounts to 1.5 gigawatts (GW), or 6 gigawatt-hours (GWh) in terms of storage capacity.

The market is paying close attention to the fact that this contract is directly connected to the expansion of AI data center power infrastructure, beyond simply being an ESS supply contract. In particular, news that this infrastructure investment is intended to support the large-scale power demand of Oracle’s data center has quickly improved investor sentiment.

The analyst explained, "This contract is based on LFP pouch cells, and if we include surplus supply, the actual amount supplied is estimated at 7.2 GWh rather than 6 GWh," adding, "The sales price is expected to be about $222 per kilowatt-hour."

Notably, this contract is being evaluated as an example that shows the growth direction of the ESS market may expand from its traditional focus on renewable energy to include data centers and fossil fuel power generation linkages. While the ESS market has previously centered on storage devices to complement the intermittency of renewables such as solar and wind, going forward, its importance as stable power supply infrastructure for the AI data center era could increase.

The analyst noted, "This BESS contract covers not only renewable energy linkages but also fossil fuel power generation," and added, "Since fossil fuel power generation cannot finely control output as required by data centers, BESS support is necessary." He further assessed, "This provides an opportunity to envision an expanded total addressable market (TAM) for BESS going forward."

However, there is also analysis that this contract itself will not significantly raise short-term earnings forecasts. This is because a portion of the 7.2 GWh order was already included in the end-2025 order backlog of 140 GWh, and the remainder will be reflected as new orders this year.

Nevertheless, what the market is focusing on is the potential for additional orders going forward. The analyst emphasized, "Of LG Energy Solution's new order target of 90 GWh for 2026, new orders this year, including this contract, are estimated to be in the low 10 GWh range," adding, "More than 70 GWh of new orders could pour in in the second half, so this deserves attention."

He continued, "If multiple orders like this one, aimed at supporting data center power demand, are secured, it could lead to a business value reassessment," and projected, "Since we expect the ESS division of LG Energy Solution to return to profitability in the second half of 2026, a combination of new orders and a return to profit will serve as a catalyst for the stock price to rise."

This content was produced with the assistance of AI translation services.