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LG Energy Solution Vertech wins $1.4 bil. ESS order from Terra-Gen
LG Energy Solution's (LGES) energy storage system / Courtesy of LGES
By Park Jae-hyuk
LG Energy Solution (LGES) Vertech, the Korean battery maker’s U.S. subsidiary specializing in energy storage system (ESS) integration, has signed a contract with Terra-Gen to supply up to 8 gigawatt-hours (GWh) of ESS to the American renewable energy power producer.
Although LGES declined to disclose the deal’s monetary value, it is estimated to be around $1.4 billion, given that an ESS container costs around $180 per kilowatt-hour.
LGES said that the deal’s size is the largest ever for the U.S. subsidiary, which was launched in February 2022, following the Korean battery maker’s acquisition of NEC Energy Solutions.
According to the battery firm, 8 GWh of electricity is large enough to power 800,000 households for a day without disruption.
Based on the contract, LGES Vertech will supply its ESS to Terra-Gen from 2026 to 2029.
The modularized products, equipped with high-capacity lithium iron phosphate cells, will be made entirely in North America. Additionally, LGES plans to provide Terra-Gen with a cloud system that facilitates analysis of the performance of its ESS and real-time monitoring of the entire data set.
LGES Vertech and Terra-Gen previously cooperated for a 2.2-GWh ESS project in California.
Both companies expect the latest contract to strengthen their strategic partnership.
“Our latest cooperation with Terra-Gen will be a milestone to expand our presence overseas beyond the North American market,” an LGES official said.
“Based on the long-term partnership, we will provide our customers with differentiated value by strengthening our production capabilities.”
Terra-Gen Chief Development Officer Gus Luna said that LGES Vertech’s advanced lithium-ion batteries will help the renewable energy power producer expand its presence in the North American market through environmentally sustainable methods.
According to energy market tracker SNE Research, the global ESS market’s size is expected to triple from 185 GWh in 2023 to 618 GWh in 2035.
The North American ESS market size is also expected to grow from 55 GWh to 181 GWh.
Considering the rapid growth rate, LGES plans to make continuous efforts to take the lead in the global ESS market by utilizing the U.S. subsidiary.