By Kim Yoo-chul
LG Chem has won another mega battery deal, this time not with carmakers but with a utility firm, the biggest in California.
The Korean battery maker said that it has agreed to supply lithium-ion batteries to Southern California Edison (SCE), which plans to use the rechargeable batteries for its household energy storage system (ESS).
It is the first time that the Seoul-based company has tapped into the highly-lucrative ESS market, which allows the storage of electricity to deliver at a time when it is most needed with minimum leaks.
"We will start to provide 10 kilowatt-hour batteries later this year through 2012 for tests first. Beginning in 2013, we will ship the batteries for full scale use to SCE," LG Chem spokesman Song Choong-sup said.
Song declined to give further financial details such as the contract volume and the expected shipment amount.
Song said the LG unit is aiming to make its presence felt in line with the smart-grid programs being pushed by the U.S. and European governments, adding the latest deal will help it to gain momentum.
A smart grid refers to a two-way network enabling real-time monitoring of electricity output and demand. It interconnects electricity suppliers and consumers in a sophisticated way, prepared to tackle depleting energy resources.
"By channeling more resources to come up with advanced batteries for household ESS, LG Chem will develop the business as another profit source," Song said.
The battery will be provided by LG Chem's U.S. affiliate, LG CPI with the components procured by LG Electronics and LS Industrial, the firm said.
On the domestic front, LG Chem is partnering with Korea Electric Power Corp., POSCO, LG Electronics and GS Caltex to meet demand created by the government’s smart-grid initiative.
The announcement comes on the heels of the news that LG Chem had been chosen as the supplier of lithium batteries to French carmaker ― Renault SA.
LG is currently providing batteries to several other global automakers including Ford, General Motors in the United States and Volvo in Europe, as well as Hyundai Motor here.
Song said that the company will announce two or three more battery contracts with carmakers before the end of this year.