Shinhan Asset Management Selected as Korea's First AI-Based Distribution Network ESS Operator

Consortium Formed with LG Energy Solution

Selected for "2026 AI-Driven ESS Deployment Support Project"

ESS to Be Built on Seven Distribution Lines in Jeonbuk

Supporting the Expansion of Renewable Energy Grid Connections

Shinhan Asset Management announced on July 10 that the "Haetbit Distribution Network Energy" consortium, formed with LG Energy Solution, has been selected as the final business operator for the maximum number of seven distribution lines eligible for application in the "2026 AI-Driven ESS Deployment Support Project" organized by the Ministry of Climate, Energy and Environment.

This project is the government's first distribution network ESS (Energy Storage System) support initiative, designed to resolve delays in connecting renewable energy by installing ESS on distribution lines saturated due to high concentrations of solar power. In this public tender, which saw participation from multiple virtual power plant (VPP) operators including power generation public enterprises, the Shinhan Asset Management and LG Energy Solution consortium secured all seven distribution lines up for bid in the Jeonbuk region.

The consortium will build ESS with a capacity of 4MW/20MWh per line, totaling 28MW/140MWh, thereby newly connecting 40MW of solar power currently awaiting grid access. This will resolve approximately 11% of the total solar power capacity (363MW) awaiting connection in the Jeonbuk region.

The consortium will establish a special purpose company (SPC) named "Haetbit Distribution Network Energy" and carry out the project with private capital, utilizing government subsidies for part of the total project cost. LG Energy Solution, which holds the record for the largest VPP operation in Korea, will be responsible for integrated AI-based operations and plans to manage the project for 20 years following the commencement of commercial operations in the fourth quarter of 2027.

Development phase investment will be executed through "Shinhan Carbon Neutral Development Project Private Mixed Asset Investment Trust No. 1" (hereinafter referred to as the Shinhan Carbon Neutral Development Project Blind Fund), managed by Shinhan Asset Management. This fund will invest in the SPC’s equity and development funds, while project financing (PF) will be used to raise capital at the time of groundbreaking.

This marks the first case in Korea of a merchant-type ESS—one based on power market revenue without a long-term fixed sales contract—being combined with institutional investor funding.

Shinhan Asset Management currently manages approximately 33 trillion won in alternative investment assets and has continuously built investment experience in new and renewable energy sectors such as solar power and ESS. Based on the business structure and financial model established through this project, the company plans to expand its business areas further by pursuing subsequent distribution line projects and forming new funds.

A Shinhan Asset Management representative stated, "This selection is a meaningful example of linking a new infrastructure asset, distribution network ESS, to the development investment domain of institutional investors," adding, "We will continue to expand the supply of private capital to AI-based power infrastructure and foster a new axis for alternative energy investment."

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