Battery Industry Association Holds Meeting to Revitalize ESS Industry
Requests Support for Initial Installation Costs and Tax Credits
There have been calls to revitalize the domestic energy storage system (ESS) industry, which was once ranked number one in the world but has stagnated due to a series of fires. The battery industry has demanded support for initial ESS installation costs and tax credits for installation and investment.
The Korea Battery Industry Association held a meeting on the 29th with the Ministry of Trade, Industry and Energy, battery and ESS manufacturers such as LG Energy Solution, SK On, Samsung SDI, and related associations and organizations to discuss policy support measures to revitalize the domestic ESS industry.
Last month, the government announced the "Energy Storage (ESS) Industry Development Strategy," aiming for a 35% share of the global energy storage (ESS) market by 2036. The industry pointed out that, accordingly, a detailed annual implementation plan for distribution, including specific bidding announcement plans for 600MW ESS annually (totaling 3.7GW by 2030), volume, and expected installation areas, must be established.
They also proposed expanding loan support systems to assist with initial ESS installation costs and mitigate financial risks, strengthening financial and tax support systems that provide direct tax credits to ESS installers or investors, and reviewing the appropriateness of capacity charges and introducing additional incentive systems for ESS linkage activation following the mandatory registration and penalty system for dispatchable renewable energy resources.
Overseas, various support policies are being promoted to encourage ESS installation. In the United States, a basic tax credit rate of 30% is provided, with additional incentives offered upon meeting certain conditions. In China, government-led support measures include mandatory ESS installation linked with renewable energy projects and subsidy support to secure price competitiveness.
The domestic ESS industry once achieved global number one status with about 2.3GWh installed in 2018 and a 79% market share in batteries, thanks to active policy support such as subsidies, financial support, and investment tax credits. However, the ESS market growth has been prolongedly slowing due to fire accidents and the end of support policies.
An association official stated, "This meeting serves as a foundation to devise measures that can establish a sustainable base for the domestic ESS industry and revitalize the market to strengthen global competitiveness. We plan to faithfully fulfill our role as a channel to build a cooperative system between the government and industry and contribute to the revitalization of the domestic ESS industry."
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