LG Energy Solution Sits Out Third ESS Central Contract Market, Leaving Samsung SDI and SK On in Two-Way Race

LG Energy Solution did not participate in the government's competitive bidding for the third Energy Storage System (ESS) Central Contract Market. As a result, Samsung SDI and SK On will compete in the third ESS Central Contract Market.

On November 5, LG Energy Solution said, "We did not participate in the third Central Contract Market bidding because, rather than securing short-term volume through price competition, we are focused on improving operational efficiency and long-term competitiveness with limited resources and personnel through strategic prioritization."

The government is holding a competitive bid for the third Central Contract Market, covering a total of 1,180 MW (7,080 MWh), including 1,100 MW (6,600 MWh) on the mainland and 80 MW (480 MWh) on Jeju Island. The volume has more than doubled compared with the first and second bids, each of which covered 540 MW, drawing interest from the battery industry. According to industry sources, about 60 consortia participated in the bidding, which closed on November 4.

LG Energy Solution's decision not to participate is believed to be due to concerns about the burden of cutthroat competition. Instead of joining this bidding, the company said it plans to focus on the stable delivery of the volume it has already secured.

The company said, "We plan to prioritize ensuring the smooth execution of the volume secured in the first and second Central Contract Markets, as well as projects already awarded, including the 'AI-Powered Distribution Network ESS Deployment Support Project.' At our Ochang Energy Plant, we will accelerate the development and commercialization of next-generation products, including sodium-ion batteries, and continue our efforts to invigorate the domestic battery industry ecosystem."

Since 2024, LG Energy Solution has operated a distribution-network-connected ESS and a virtual power plant (VPP) on Jeju Island. In July this year, it was selected as the operator of the government's "AI-Powered Distribution Network ESS Deployment Support Project" and is scheduled to operate a 140 MWh ESS in the Honam region for 20 years starting in 2027. In North America, it provides integrated solutions, from design to operation and maintenance, through its system integration subsidiary Vertech.

Meanwhile, the Korea Power Exchange plans to close submissions of final supporting documents, including business plans, on November 11, and announce the preferred bidders this month following a document review. The selected operators must complete construction of their facilities by February 2029.

The cumulative market shares in the first and second rounds were 56% for Samsung SDI, 25% for SK On, and 19% for LG Energy Solution.

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