LG Energy Solution is entering the ESS System Integration (ESS SI) field, securing business competitiveness beyond simple battery supply to directly constructing and managing large-scale ESS.

LG Energy Solution announced on the 17th that it acquired a 100% stake in US-based ESS SI specialist NEC Energy Solutions from its parent company, Japan-based NEC Corporation.

Through this, LG Energy Solution has established LG Energy Solution Vertech. A new corporation called “Inc. (Company)” is established.

The newly established corporation in charge of ESS SI plans to carry out ESS business planning, design, installation, and maintenance to provide customized solutions for each customer.

It also provides all services from integrating essential equipment including batteries and PCS to optimizing the ESS business.

Recently, with the growth of the global ESS market, many customers are demanding solutions that include SI roles from battery manufacturers for reasons such as the convenience of contract and unified responsibility/warranty, and quality reliability.

Accordingly, LG Energy Solution judged that it was necessary to internalize SI capabilities in order to respond to customer demands and strengthen business competitiveness, and acquired 'NEC Energy Solution'.

Based on this acquisition, LG Energy Solution plans to accelerate its lead in the global ESS market by providing complete business capabilities that go beyond simple battery supply to SI.

Specifically, LG Energy Solution is expected to increase its competitiveness in winning project bids by internalizing core SI business capabilities such as EMS software and maintenance.

In particular, △it is possible to directly build large-scale ESS by securing its own business capabilities from batteries to ESS business planning and after-sales management, △it is possible to respond promptly to customer demands without battery-related supply and demand issues that account for more than 50% of ESS project costs, and △it is possible to build an optimal ESS system through battery and system integration design.

In addition, in the future, it will be possible to secure and monitor real-time ESS integrated operation data (data related to major equipment such as batteries, PCS, and ESS operation environment) based on its own EMS software, which is expected to further enhance the stability of battery operation quality.

In addition, sales are expected to increase through securing new customers by utilizing NEC Energy Solutions' global sales, service network and customer network, and providing solutions that add SI to existing battery customers.

LG Energy Solution CEO Kwon Young-soo said, “Through this acquisition, we have gone beyond simple battery supply and have gained the competitiveness of integrated ESS solutions tailored to the needs of each customer,” adding, “We will further strengthen our differentiated solutions and quality competitiveness to lead the global ESS market.”

'NEC Energy Solutions' was established in 2014 when Japan's 'NEC' acquired the ESS SI business of the US' 'A123 Systems'.

With its headquarters and research and development center in the United States, the company has carried out more than 140 global ESS projects centered on SI business in various parts of the world, including Australia, London, and Brazil.

'Sales for 2020 amounted to approximately 240 billion won, and the company has maintained high growth of 60% on average per year for the past three years since 2018.

In particular, NEC Energy Solutions is highly regarded for its excellent IT capabilities, including its self-developed EMS (Energy Management System) software 'AEROS®', which is key to the ESS SI business, and its maintenance and repair capabilities based on more than 10 years of global operation data.

Meanwhile, as renewable energy policies are expanded around the world, the ESS market linked to it is also expected to grow rapidly. According to SNE Research, a global market research firm, the global ESS market size recorded 11 GWh in 2019 and 20 GWh in 2020, and is expected to grow at an average annual rate of 35% to 302 GWh in 2030.