LG Energy Solution secures ESS supply deal with U.S. Terra-Gen

LG Energy Solution’s ESS battery container product for power grids. (LG Energy Solution)

LG Energy Solution Vertech announced on Thursday that it reached a large-scale energy storage system (ESS) supply agreement with Terra-Gen, a U.S.-based renewable energy company. Under the contract, LG Energy Solution Vertech will supply up to 8 GWh of ESS over a four-year period starting in 2026. This capacity is equivalent to the daily electricity usage of about 800,000 households.

While the contract value was not disclosed, estimates suggest it could be around 2 trillion won ($1.41 billion), assuming container costs of $170 to $190 per kilowatt.

The supplied units will feature high-capacity lithium iron phosphate (LFP) long JF2 cells in container-type modular products, allowing for custom configurations based on specific applications. All units will be produced in North America. LG Energy Solution will also provide AEROS, a cloud-based software enabling real-time monitoring and analysis of ESS performance and data.

LG Energy Solution Vertech and Terra-Gen previously collaborated on a 2.2 GWh energy storage project in California. The company highlighted that this agreement represents LG Energy Solution Vertech’s largest achievement since its establishment, reinforcing its competitive position in the North American market.

LG Energy Solution Vertech was founded in February 2022 following LG Energy Solution’s acquisition of U.S.-based ESS system integration (SI) firm NEC Energy Solutions. The subsidiary now aims to expand its scope beyond battery supply to deliver comprehensive ESS integration solutions, furthering its push to lead the global ESS market.

According to energy research firm SNE Research, the global ESS market is projected to grow more than threefold, from 185 GWh in 2023 to 618 GWh by 2035. In North America alone, the market is expected to expand from 55 GWh in 2023 to 181 GWh by 2035.

Despite a temporary slowdown in electric vehicle demand, LG Energy Solution has remained resilient by diversifying its customer base and product portfolio. The company recently secured a five-year contract to supply next-generation 4695 cylindrical batteries to Rivian. The deal is estimated to generate at least 8 trillion won in revenue.

Prior to this, LG Energy Solution signed an agreement to supply its 46-series batteries to a Mercedes-Benz affiliate and entered a long-term contract with Ford to supply a total of 109 GWh of electric commercial vehicle battery cells and modules. The company also recently gained attention for supplying batteries for SpaceX, the aerospace company led by Elon Musk.