LG Energy Solution Selected as Operator for Government's First Distribution Grid ESS Project

Secures 140MWh in Honam Region
Expands Beyond Battery Supply to VPP Business

LG Energy Solution announced on July 10 that it has been selected as the operating company for the "2026 AI-Based Energy Storage System (ESS) Deployment Support Project" led by the Ministry of Climate, Energy and Environment. This marks an expansion of its business scope from battery supply to operating as a virtual power plant (VPP) operator.

LG Energy Solution CI.

LG Energy Solution formed a consortium with Shinhan Asset Management under the name "Sunlight Power Distribution Network Energy" to participate in the project. Out of a total of 32 distribution lines, the consortium secured the maximum possible allocation for an operator, which is 7 distribution lines (a total of 140 MWh). LG Energy Solution will be responsible for battery supply, ESS construction, and AI-based operation, while Shinhan Asset Management will support financial structuring. Commercial operation is set to begin in 2027, with an operating period of 20 years.

This project is the government's first initiative to establish ESS within the distribution grid. In regions such as Honam and Jeju, where the proportion of renewable energy generation is high, limitations in the distribution grid have caused delays in connecting solar power facilities to the grid and have led to output restrictions. The government plans to enhance grid stability by installing ESS in the distribution network to store surplus power and discharge it when demand increases.

LG Energy Solution intends to utilize AI-based predictive algorithms and a VPP platform to enhance the grid's capacity to accept renewable energy. Through this approach, the company expects to newly connect 40 MW of solar power facilities currently waiting for grid access in the Honam region and accommodate an additional 52.4 GWh of renewable energy annually.

This selection is also significant as it recognizes LG Energy Solution's capabilities as an ESS operator, beyond being simply a battery supplier. Since 2024, the company has been operating a grid-connected ESS in Seogwipo, Jeju, accumulating AI-based power grid management expertise. The operational experience and technological know-how gained in Jeju are evaluated as key factors in the company's selection for this project.

Kang Changbum, Head of ESS Battery Business at LG Energy Solution, stated, "Being selected for this project is a meaningful achievement in our journey to grow beyond battery supply into an energy platform company. Based on our AI-driven ESS operational capabilities, we will expand our business and contribute to stabilizing the national power grid."

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