SK gas, SK D&D collaborate with U.S. energy company

[Courtesy of SK gas]

South Korea’s SK gas Ltd. and its property and renewable energy developing subsidiary SK D&D Co. are collaborating with a U.S. energy company to tap the fast-growing U.S. energy storage system (ESS) market.

SK gas and SK D&D announced on Wednesday that they signed an agreement to invest in ESS with Apex Clean Energy after forming a joint venture, ‘SA Grid Solutions,’ with the U.S. renewable energy company.

Apex Clean Energy has renewable energy power plants with a cumulative generation capacity of 8.6 gigawatts (GW) across 40 sites in the United States and is actively expanding into the ESS business.

SA Grid Solutions is made up of Gridflex, a U.S. local corporation established by SK gas and SK D&D in December 2023, and Apex Clean Energy. The total investment amounts to 87.1 billion won ($65 million), including 69.7 billion won from SK gas and 17.4 billion won from SK D&D, with Gridflex holding a 60 percent stake and Apex 40 percent.

SK gas and SK D&D plan to expand their business domains from domestic gas and power generation to overseas renewable energy to secure additional growth momentum.

With this agreement, SK gas has added a U.S. ESS to its portfolio in addition to the Ulsan GPS, a combined liquefied natural gas (LNG) and liquefied petroleum gas (LPG) power plant set to begin commercial operations in 2024, and the LNG terminal at Korea Energy Terminal Co. (KET).

Both companies are currently constructing a 200-megawatt (MW) ESS facility in Texas, the United States, where their first investment is located, with the goal of beginning commercial operations in September 2024.

Electricity consumption in Texas is about 80 percent of that in Korea, with the demand for ESS growing rapidly as the supply of renewable energy tops 30 percent of total electricity generation thanks to a subsidy program under the U.S. Inflation Reduction Act (IRA).

The two companies also plan to expand their ESS capacity and explore renewable energy business opportunities in the United States, eventually expanding to other regions in the country.

“The ESS business is indispensable to expanding renewable power generation, sustainable in the long term, and has significant social value,” SK gas Chief Executive Officer Yoon Byung-suk said. “We will contribute to stabilizing power supply and support the expansion of renewable energy via the ESS business to achieve our vision of becoming a ‘net-zero solution provider.’”

Kim Do-hyun, CEO of SK D&D, said, “We will create new opportunities in the U.S. market, including ESS-based power trading, take the lead in the burgeoning domestic ESS market, and contribute to strengthening the competitiveness of the power brokerage business.”