Europeans to use LG's solar system

By Kim Yoo-chul

Kwon Young-soo LG Chem president

LG Chem, the nation’s top petrochemical company, said Sunday it has signed a deal with German-based SMA to supply its lithium-ion battery packs for the Energy Storage System (ESS) used in households in Europe.

“As the top rechargeable battery maker in the world, LG is winning more deals for ESS solutions,” said Kwon Young-soo, president of its energy solution division.

“ESS is one of our new cash-generators. LG will boost spending on research and development (R&D) for the development of batteries that have longer life-span and higher security customized for various ESS solutions.”

Kwon recently told The Korea Times that LG’s solar energy business is improving in terms of revenue and profit, although the executive declined to elaborate further.

ESS commonly refers to an accomplished device in the field of “smart grid” as it transmits stored energy to perform useful operation at a later time maximizing energy efficiency.

Kwon said the actual mass-production of its batteries according to the agreement with SMA will start from July this year. Company spokesman C.S. Song declined to give the value of the contract citing the sensitivity of the issue. The storage of each battery pack will reach 2 kilowatt per hour.

The LG-developed batteries will be used for SMA’s next-generation ESS solutions for European homes. SMA is one of the few firms that have been active in investing in renewable energy-related projects.

The deal comes amidst the LG Group affiliate cutting its heavy reliance on the petrochemical business, which is deemed very cyclical and volatile.

Under the leadership of Kwon, who was also a former CEO at LG Display, LG Chem’s business diversification strategies are paying off.

Major battery manufacturers, including LG Chem, have tapped the emerging renewable energy storage and electric car markets. LG is providing lithium-ion batteries to power General Motors’ Chevy Volt and hybrid cars from Ford.

“The latest deal in Europe will pave the way for us to lead over our rivals in the ESS market in Europe. We don’t see any big problems to raise our stakes thanks to our proven management in battery manufacturing,” said the spokesman Song.

Energy storage is shaping up to be a big market because of a growing amount of solar and wind energy coming online in developed countries.

It’s been said that some home and business owners will want to store any solar electricity they generate but don’t need right away.

But policymakers regard renewable energy storage as a means to reduce the need to build more power plants that run on fossil fuel.

The spokesman said the technologies are getting better.

The ESS solution is easy to install into a standard inverter. “The integrated LG batteries could increase self-consumption of solar power in households by up to 50 percent as they store the electricity to utilize during peak hours,” Song said.

With the SMA, LG Chem is collaborating with Southern California Edison, ABB and IBC solar to provide its battery packs for energy storage pilot projects for homes, small businesses and commercial usages, the company said.