LG Energy Solution inks $1 billion deal for U.S. ESS project

Cunningham ESS complex [Courtesy of Hanwha Q Cells]

LG Energy Solution Ltd. has won a contract worth 1.4 trillion won ($1.05 billion) from Hanhwa Energy Corp. for an energy storage system (ESS) in the United States.

According to industry sources on Sunday, LG Energy Solution agreed to supply batteries sought by Hanwha Energy for the Atlas ESS project in Arizona.

Hanwha Energy is developing a 4 gigawatt-hour (GWh) scale ESS complex under the project, which is known to be the world’s largest for a standalone ESS. Hanwha Energy plans to begin construction of the facility by the fourth quarter of 2024 and complete it by June 2025.

The Atlas ESS project is expected to be the first achievement to emanate from LG Energy Solution and Hanwha Group’s battery alliance. LG Energy Solution signed a memorandum of understanding for battery business collaboration with Hanwha Group arms, including Hanwha Q Cells under the Hanwha Solution Corp., Hanwha Momentum, and Hanwha Aerospace Co., in January 2023.

Observers project that growth in LG Energy Solution’s ESS revenue from Hanwha Group, particularly given that the ESS projects Hanwha Energy and Hanwha Q Cells are pursuing in the United States currently totals 40 GWh. If LG Energy Solution could secure all contracts for the group’s U.S. ESS projects, its revenue potential could soar to 14 trillion won.

ESS is integral to the renewable energy sector, as it manages the variability of climate conditions for sources such as solar and wind power. The U.S. power grid ESS market is projected to skyrocket to 95 GWh annually by 2031, a more than ninefold increase from the 9 GWh recorded in 2021.