LG Energy Solution and Hanwha, two of the major players in global battery and renewable energy technology, aim to establish battery storage-specific manufacturing facilities in the US.
The two South Korean companies have formed a partnership to take on the US battery energy storage system (BESS) market. The market has seen significant growth in the past few years that is expected to accelerate rapidly with the country’s Inflation Reduction Act (IRA) incentivising both deployment and manufacturing of energy storage.
“We have decided to collaborate with LG Energy Solution, which has several large-scale manufacturing facilities being constructed in US, to target the US energy storage system (ESS) market boasting fast growth thanks to green energy policies,” Hanwha Group said.
“Our aim is to maximise synergy at home and abroad by promoting partnerships in various fields, such as supplying battery manufacturing equipment and developing special-purpose batteries.”
LG Energy Solution (LG ES) has a considerable share of the US market already, supplying battery cells, racks, and complete systems to some of the country’s largest utility-scale BESS projects as well as the residential segment. The LG Group company went publicly listed through an IPO last January.
Last year it made a move to expand further downstream with the establishment of its own system integrator subsidiary, LG Energy Solution Vertech, and the acquisition of a former market-leading system integrator, NEC Energy Solutions.
LG claimed that vertically integrating system integrator and battery cell supply capabilities streamlines the former process and gives customers assurances on a currently constrained global supply chain.
Meanwhile Hanwha Group is currently active in the market through its ownership of Germany-headquartered Qcells, the solar PV manufacturer which also has a range of home batteries and complete home energy management system (EMS) solutions. Qcells bought up US energy storage software and EMS specialist Geli in 2020.
Qcells targets battery storage EPC business’ growth
Qcells made its first investment into a grid-scale battery storage project in 2021, acquiring and later selling on the 190MW/380MWh BESS now under construction in Texas’ ERCOT market after securing US$150 million financing.
In September last year it announced three standalone BESS projects in New York totalling 12MW/48MWh with community solar PV and storage developer Summit Ridge Energy.
Last week, Qcells committed to what was claimed to be the US’ biggest private sector investment in clean energy manufacturing. The company announced the construction of 8.4GW of solar ingot, wafer, cell, and module annual manufacturing capacity in Georgia by 2024, with the southern US state already attracting major electric vehicle (EV) and EV battery makers’ investments in the past few years.
With that push and the latest announcement made yesterday, the companies aim to capture the full benefits of the IRA’s incentives, which reward domestic production and deployment of clean energy equipment.
The pair will also work to develop energy storage system products for the commercial and industrial (C&I) and utility markets. For Hanwha, the deal will mean assurances on cell supply and competitiveness on pricing as Qcells targets ramping up of its solar PV and energy storage engineering, procurement and construction (EPC) business in the US.
Other Hanwha companies, such as those active in the aviation and EV industries will also benefit from the partnership with LG ES, the group said.
The news came just a couple of days after LG ES and Japanese carmaker Honda announced a joint venture (JV) to establish around 40GWh of lithium-ion electric vehicle battery production facilities in Fayette County, Ohio by 2025.
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