New ESS Charging Rate Limited to 80% Indoors and 90% Outdoors... Downgrade Recommended for Existing Facilities

Ministry of Trade, Industry and Energy Announces 'Additional ESS Safety Measures'

Mandatory Installation of Black Boxes on All Facilities

Emergency Orders for Removal or Relocation in Case of Fire Risk... Non-compliance Punishable by Up to 2 Years Imprisonment or a Fine up to 20 Million KRW

Flexible Adjustment of ESS Charging and Discharging Times to be Pursued... Measures to be Prepared within the First Half of the Year

[Sejong=Asia Economy Reporter Joo Sang-don] The government has identified that the ESS (Energy Storage System) fires that occurred last year were linked to operating methods with a charging rate of 95% or higher, and has decided to limit the charging rate of new facilities to 80% for indoor installations and 90% for outdoor installations.

The Ministry of Trade, Industry and Energy announced these 'Additional ESS Safety Measures' on the 6th.

On this day, the ESS second fire accident investigation team reported that the five ESS fires that occurred since August last year were caused by a combination of 'high charging rate conditions (95% or higher) and battery abnormalities.'

Accordingly, the government will first implement a plan within this month to limit the charging rate of new indoor ESS facilities installed in buildings accessible to the public to 80%, and outdoor facilities installed in separate dedicated buildings not accessible to the public to 90%.

Support Measures for Outdoor Relocation of Indoor Facilities.

For existing ESS facilities, it will be recommended to lower the charging rate to the same level as new facilities. Additionally, to reduce the charging rate while alleviating the industry's burden, plans will be made to revise the operating standards and special tariff schemes for ESS linked to renewable energy.

For peak reduction facilities, improvements to the Korea Electric Power Corporation (KEPCO) discount special cases will be reviewed so that electricity bill discounts apply when the charging rate reduction recommendation is followed. For renewable energy-linked facilities, the Renewable Energy Certificate (REC) issuance criteria will be revised to improve ESS operation methods and encourage compliance with the charging rate reduction recommendation.

Support will also be provided for relocating indoor facilities to outdoor locations. The government is promoting common safety measures, installation of fire-fighting facilities, and firewalls to secure the safety of indoor ESS facilities located in buildings accessible to the public. For indoor ESS facilities where implementing these safety measures is difficult or where the business owner wishes to relocate outdoors, the government will support the relocation.

The installation of operational data storage devices (black boxes) to determine the cause of accidents will also be expanded. Previously, the government mandated separate operational data storage for ESS installed after the 'ESS Safety Management Strengthening Measures' announced in June last year. This time, black box installation will be recommended for ESS facilities installed before that as well.

A new emergency order system for removal or relocation to prevent human casualties will also be established. In cases where there is a significant risk of fire in ESS facilities, emergency inspections will be conducted, and if there is a recognized significant risk of human or property damage, emergency orders for removal or relocation will be possible. To enhance the effectiveness of the system, penalties including imprisonment of up to 2 years or fines up to 20 million KRW will be imposed for non-compliance with emergency orders.

Additionally, an information disclosure system will be established to publicly share safety management information such as legal inspection results of ESS facilities, and through national research and development (R&D), standard installation models considering site-specific characteristics such as mountainous, coastal, urban, and indoor models will be developed and distributed.

The government also announced activation measures to prevent contraction of the ESS industry. Currently, ESS operating standards require all ESS to charge and discharge at the same time. For solar ESS, charging occurs from 10 a.m. to 4 p.m., and discharging at other times. However, in the future, charging and discharging times will be flexibly adjusted considering renewable energy generation, power demand, and grid congestion conditions that vary by system and weather. To this end, plans to revise installation and operation methods for renewable energy-linked ESS will be reviewed with related organizations such as Korea Electric Power Corporation, Korea Power Exchange, and Korea Energy Agency, and prepared within the first half of this year. This will include measures to encourage compliance with safety measures such as lowering the charging rate.

For peak reduction ESS, the discount special case system will be improved to enhance the power peak reduction effect. Currently, the discount time periods fixed according to KEPCO’s electricity rate schedule are being considered for change to vary daily according to power peaks in coordination with the Korea Power Exchange. Specific discount special tariff plans will be prepared by KEPCO after gathering stakeholder opinions and are planned to be applied from 2021.

The government plans to establish and implement systematic support measures for the short and medium to long term to strengthen the soundness of the ESS ecosystem. It will also prepare implementation plans to enhance ESS operation and maintenance (O&M) expertise, effective reuse and recycling of secondary batteries, and development of high-performance secondary batteries with improved fire resistance.