The owner of a battery energy storage system (BESS) project in Illinois, US, is seeking at least US$10 million in damages from LG Energy Solution for supplying allegedly defective batteries, a court document shows.
The complaint was submitted by project vehicle Marengo Battery Storage LLC and its owner USGEM, INC in the judicial court of McHenry County, Illinois, on 20 November 2023.
The companies are seeking at least U$10 million in damages (plus interest, costs and other relief) from LG Energy Solution for allegedly supplying defective lithium-ion batteries for a 20MW/10MWh battery energy storage system (BESS) project deployed in 2018.
The Marengo project was deployed and operated on a long-term contract by Switzerland-headquartered system integrator Leclanché for Swiss Green Electricity Management Group (SGEM), using LG batteries.
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The project was originally developed by Glidepath. SGEM appears to no longer be trading but the Marengo project is still owned by its former US subsidiary USGEM, the ownership details of which are not publicly available.
The complaint – submitted by law firm Nixon Peabody – alleges that LG Chem, which spun out its battery business into LG Energy Solution in 2020, provided batteries which were:
“…defective and have self-combusted creating fires (at the facility and elsewhere per Defendant’s and public reports), have caused damages to the facility and its contents, and further have caused dangerous conditions to individuals and property.”
LG Energy Solution said it would not comment on ongoing litigation when asked by Energy-Storage.news last week (6 February) while Leclanché has not responded at the time of writing.
The system, deployed in the service area of independent system operator (ISO) PJM to provide it frequency regulation services, had to be taken offline from April 2019 to December 2020 and again in April 2022 and is yet to come back online (at least at the time of the complain in November 2023).
The complaint claimed that at times LG has “not acted in good faith” and that it even “acted in reckless disregard of the truth” of defects in its batteries. Replacement batteries supplied failed in April leading to the ongoing shutdown of the facility, the complaint said.
It may be worth noting that since the Marengo project was deployed, LG Energy Solution moved downstream into the system integration space through the acquisition of NEC ES, completed in early 2022.
Discussing it with Energy-Storage.news at the time, an IHS Markit analyst suggested one aspect of the move was a desire to keep more control over assets built with its cells and ensuring they operated successfully.
It is the second major dispute between a project owner and technology supplier in the US to have emerged in late 2023, after system integrator Fluence was hit by a cross-complaint from a customer seeking a US$230 million refund for a engineering, procurement and construction (EPC) contract.
See the full complaint submitted against LG here.
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