LG Energy Solution to supply batteries to Hanwha Q Cells in largest-ever ESS deal

LG Energy Solution's headquarters in Yeouido, western Seoul [NEWS1]

LG Energy Solution clinched a battery deal with Hanwha Q Cells, the largest the Korean battery maker has inked for energy storage systems (ESS) to date.

Under the deal, the Korean company will supply 4.8 gigawatt-hours of ESS batteries to Hanwha. The solar cell manufacturer will install them in La Paz County, Arizona.

An ESS improves grid stability by storing excess energy and releasing it when demand rises and is therefore considered crucial in increasing the efficiency of renewable energy plants.

The size of the deal is reported to be around 1.4 trillion won ($1 billion), though the exact amount has not been disclosed.

The supply will extend to October 2026.

The latest deal comes amid an ESS market that is rapidly growing following the passage of the U.S. Inflation Reduction Act. The accumulated installment of ESS in the North America is expected to surge threefold to 181 gigawatt-hours in 2035, according to data from SNE Research.

LG Energy Solution is currently building a plant to produce lithium iron phosphate (LFP) batteries for ESS in Arizona. The plant will have an annual capacity of 17 gigawatt-hours.

LG Energy Solution shares fell 1.3 percent to close at 376,500 won on Friday.

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