LG Energy Solution Targets US ESS Market with LFP Lead

LG Energy Solution ESS LFP Pouch Cell. Photo by LG Energy Solution

LG Energy Solution is targeting the U.S. global ESS (Energy Storage System) market by leveraging LFP (Lithium Iron Phosphate) batteries that combine price competitiveness and safety.

LG Energy Solution is participating in 'RE+ 2023,' the largest renewable ESS exhibition in the U.S., held over four days from the 11th to the 14th (local time) in Las Vegas. At this exhibition, the company announced its four core business strategies to secure competitiveness in the ESS market and showcased its latest ESS products and technologies, including a power grid modular-type liquid-cooled container product applying LFP cells.

The global ESS market is expected to grow rapidly as policy support expands in various countries. In particular, the U.S. market is anticipated to lead this growth due to the Inflation Reduction Act (IRA) and other factors. The North American ESS market is projected to grow nearly tenfold from 12 GWh in 2022 to 103 GWh by 2030 (Wood Mackenzie data).

Investing 3 Trillion KRW to Establish a 16GWh-Scale ESS LFP Battery Mass Production Base in Arizona, U.S.

LG Energy Solution plans to secure leadership in the U.S. market by focusing on four core business strategies: ▲operating large-scale local production plants in the U.S., ▲strengthening local supply chain systems, ▲differentiated LFP battery technology, and ▲SI (System Integration) capabilities.

Jang Seung-se, Executive Vice President and Head of the ESS Business Division, said, "Based on proven production capacity and differentiated ESS technological competitiveness, we aim to grow the ESS business division's sales more than threefold within five years." He added, "Especially to aggressively target the U.S. market, which is expected to have the steepest growth, we decided earlier this year to invest 3 trillion KRW in a new ESS LFP battery production plant in Arizona, and more investments will follow."

LG Energy Solution is emphasizing LFP to capture the ESS market. Compared to NCM (Nickel-Cobalt-Manganese) batteries, LFP batteries have lower energy density but are cheaper, safer, and have a longer lifespan. It is widely agreed that LFP batteries are more suitable for ESS, which requires long-term stable operation.

Through the Arizona plant, the first large-scale ESS dedicated battery production facility in the U.S., the company plans to expand strategic partnerships with local customers. This plant, built with a total investment of 3 trillion KRW and a capacity of 16 GWh, will produce pouch-type LFP batteries independently developed by LG Energy Solution. Construction of the Arizona plant began this year, with mass production of LFP batteries scheduled for 2026.

Additionally, LG Energy Solution will further strengthen the local supply chain system for key raw materials and components used from battery cell production to packs and containers. Through this, the company plans to actively cooperate to ensure its customers can benefit from IRA tax credit incentives.

LG Energy Solution 'RE+2023' Exhibition Booth. Photo by LG Energy Solution

Strengthening LFP Portfolio... From Power Grids to Residential Use

With more advanced LFP battery technology offering higher reliability, efficiency, and longer lifespan, LG Energy Solution is expanding its product portfolio. As the only company in the U.S. with an ESS-dedicated LFP battery production plant, LG Energy Solution plans to enhance customer value by providing immediate management services tailored to customer needs.

The company is also strengthening its ESS SI capabilities. It plans to enhance its system integration solution business covering the entire ESS spectrum?from supply, project planning, design, installation, to maintenance and repair. Furthermore, it aims to expand into software services capable of real-time monitoring and predictive maintenance. Last year, LG Energy Solution established its U.S. ESS SI subsidiary, 'LG Energy Solution Vertech, Inc.'

Meanwhile, the 'RE+ 2023' event attracted over 1,300 major renewable and ESS-related companies worldwide.

LG Energy Solution organized its exhibition booth into four zones: North America Network Zone, Power Grid Zone, Residential Zone, and Commercial Zone. It showcased a 4.76 MWh capacity power grid modular-type liquid-cooled container product applying LFP cells. This liquid-cooled product reduces maintenance costs and extends product lifespan. Additionally, by applying a modular type, it can optimally provide energy by reflecting diverse customer requirements considering local environments and regulations.

Other products introduced included the residential ESS product ‘enblock S,’ boasting high energy density based on NCM batteries, and ‘enblock S+,’ which integrates ESS system components such as inverters under a single brand. ‘Enblock’ is LG Energy Solution’s new residential ESS brand, combining the words energy and block, meaning ‘a space filled with energy.’