LG Energy Solution, Hanwha companies sign MOU for battery cooperation

Industry

Published: 16 Jan. 2023, 18:00

LG Energy Solution, Hanwha companies sign MOU for battery cooperation

Executives of LG Energy Solution and Hanwha companies pose for a photo after signing a memorandum of understanding to cooperate on the U.S. battery business Monday at Plaza Hotel in Jung District, central Seoul. [LG ENERGY SOLUTION]

LG Energy Solution and three Hanwha companies signed a memorandum of understanding (MOU) Monday, promising cooperation in the battery business, including on an energy storage system (ESS) project in the United States.

The three Hanwha companies engaged in the agreement are Hanwha Q Cells, Hanwha Momentum and Hanwha Aerospace. Together, the four companies will create a task force later in the year to proceed with the business agreement.

Under the non-binding agreement, LG Energy and Hanwha Q Cells will construct an ESS facility in the United States. An ESS improves grid stability by storing excess energy and releasing it when demand rises, and therefore is considered crucial in increasing energy efficiency for renewable energy plants.

Details about the investment and location of the facility will be decided later.

The latest cooperation comes with the fast-growing ESS market after the passage of the U.S. Inflation Reduction Act. The accumulated installment of the ESS in the U.S. market is forecasted to reach 95 gigawatt-hours by 2031 from last year’s 9 gigawatt-hours.

“The latest cooperation is anticipated to contribute to the increasing competitiveness of each company’s battery business,” LG Energy said in a statement.

The ESS is LG Energy’s latest focus. In 2021, LG Energy supplied its lithium-ion batteries to U.S. power generation firm Vistra Energy's 1.2 gigawatt-hour ESS facility in California. The Korean company also established LG Energy Solution Vertech last year, which oversees the company's ESS system integration business.

LG Energy Solution and Hanwha Momentum will jointly develop technologies for its battery manufacturing facilities. Hanwha Momentum is an automation engineering subsidiary of Hanwha Corporation providing equipment for facilities for various sectors including batteries, solar panels and automobiles.

The Korean battery maker is currently building a few battery facilities in North America in collaboration with global automakers like General Motors and Stellantis, with plans to the expansion of its independent plants in Poland, Michigan and Ochang in North Chungcheong.

With Hanwha Aerospace, LG Energy will develop batteries that can be applied to urban advanced mobility, often called flying taxis.

BY SARAH CHEA [chea.sarah@joongang.co.kr]