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| An energy storage system was destroyed at the Asia Cement plant in Jecheon, North Chungcheong Province, on Dec. 17. Courtesy of North Chungcheong Province Fire Service Headquarters |
By Nam Hyun-woo
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| Minister of Trade, Industry and Energy Sung Yun-mo / Yonhap |
ESS manufacturers who were ordered by the government to suspend production have lost tens of billions of won while waiting for guidelines from policymakers.
The energy ministry said it will be able to announce the cause of the fires next month, but did not suggest any clues as to what had caused them, despite the investigation committee meeting more than 60 times since January.
"Since the fires wholly destroyed the ESS equipment, and parts from different firms were used in manufacturing, it is inevitable for the investigation to take some time to find out the cause transparently and fairly," the ministry said.
From May 2 last year to Jan. 22, 21 ESS many fires were reported across the country. In December, the government asked public institutions, large multi-purpose facilities and private owners to stop using the ESSs.
Following the recommendations, the government set up the investigation committee in January and promised to find out the cause by March, but has yet to do so.
"The committee is conducting experiments to see what sets the ESSs on fire," the ministry said. "The committee has listed 76 possible causes and tested 53 of them." The ministry said it has found fire-causing conditions in two experiments and the circumstances observed in the experiments were "similar" to the actual accidents.
On growing criticism of the investigation's slow process, the ministry said: "The investigation of the Galaxy Note 7 fires took five months and the recent BMW fires also took five months."
While the government is taking time to find the cause of ESS fires, companies running and making the battery systems are continuing to suffer.
The ministry said 522 out of 1,490 ESS facilities across Korea are suspended from operation as of April 30. This is down from 765 in March. No ESS orders have been made to manufacturers so far this year.
Amid the uncertainty, LG Chem suffered a 120 billion won loss in its ESS business in the first quarter of this year.
"Initially, we planned 80 percent growth in ESS sales, but at this point, we doubt 50 percent growth," LG Chem CFO Jeong Ho-young said.
Samsung SDI, another major ESS maker, posted 1.73 trillion won in sales in its battery business in the first quarter, down 7.9 percent from a year earlier.
Industry officials said the burden is heavier on smaller firms.
"Large companies can handle that kind of losses stemming from this uncertainty, but it is a matter of now or never for smaller ESS makers because they don't have financial room to withstand this deadlock," a battery firm official said.
"To complement the limits in renewable energy, advances in the ESS industry are crucial, but this slow progress and setbacks in running ESSs will deal a heavy blow to the country's shift to renewable energy."
An ESS is a large stack of rechargeable batteries. It is often used for storing cheap off-peak electricity or coupled with solar, wind or other intermittent power generators.
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