Firms angry as gov't blames battery cell for ESS fires
By Nam Hyun-woo
Seen above is a fire which burnt an energy storage system in Samcheok, Gangwon Province, Dec. 22, 2018. Courtesy of Samcheok Fire Station
Domestic battery cell makers responded negatively Thursday to the results of a government investigation into a series of fires involving energy storage systems (ESSs) last year, which stated that battery cells in the systems were the main culprit.
The companies insisted that the government had jumped to the “wrong conclusion,” claiming that data given to its team was analyzed incorrectly and misinterpreted, and the battery cells did not cause the fires.
The results are expected to deal an additional blow to LG Chem and Samsung SDI, which had already seen a drop in profits in the fourth quarter of last year after reflecting one-off costs and provisions incurred by the fires, industry officials said.
The investigation team led by the Ministry of Trade, Industry and Energy (MOTIE) announced that four out of the five ESS fires that occurred between August and October, were probably due to battery malfunctions.
According to the team's report, electricity logs in the four ESS facilities showed that their batteries had “low voltages and high temperatures which are assumed to have been triggered by short circuits.” The facilities were in Yesan, South Chungcheong Province; PyeongChang, Gangwon Province; Gunwi, North Gyeongsang Province; and Gimhae, South Gyeongsang Province.
The Yesan and Gunwi facilities used LG Chem batteries and the two others, those from Samsung SDI.
Both companies immediately refuted the government's analysis.
“We believe the batteries are not the direct cause of the fires,” LG Chem said in a statement. “We have run a four-month test under severe environmental conditions to re-create the fires but could not do so. We also confirmed that cathode debris, lithium precipitates and other substances the investigation team cited to prove its argument, did not constitute a direct cause of the fires.”
Samsung SDI also disagreed with the investigation results.
“The investigation team's analysis is based on batteries that were built in similar period and used in another ESS facility in Incheon, similar to the batteries installed at the facilities that suffered the fires,” Samsung SDI said in a statement. “If the investigation results are correct, then the Incheon facility would also suffered from fires too.” “Though the fire started with the batteries, but there could be various reasons for this,” it added. “To have a fire, there should be an ignition source such as a match and flammable material such as oil present at the same time. Batteries have energy so they can expand a fire, but cannot catch fire on their own.”
The government has been looking into a series of ESS fires that have occurred across the country since 2017. After investigating 23 cases which took place between August 2017 and May 2019, MOTIE announced in June last year that the fires were not caused by battery cell defects and introduced new safety measures.
As five more fires were reported after the measures, however, the ministry set up a different investigation team in October, which industry officials say focused on “potential errors in battery cells” as they had been ruled out in the first investigation.
Though the outcome of the second investigation is now the subject of heated debate, the officials said damage to the battery makers' earnings seems inevitable.
LG Chem and Samsung SDI reflected potential financial damage into their fourth quarter earnings. LG Chem posted a 27.5 billion won operating loss after it set up 300 billion won in provisions for the ESS fires. Samsung SDI also saw its operating profit decline by 91.9 percent to 20.1 billion won, after it set up provisions of 200 billion.
Both firms expected sales from ESS batteries to grow this year as overseas demand is showing solid growth. Foreign operators of ESSs using their batteries built in the same year have not reported any fires.
ESSs are mostly coupled with solar or wind power generators to store electric energy for utilization later. Since they enable a power supply when the generators are unable to generate electricity, they are one of the most important parts of the infrastructure for a renewable power supply.