LS Electric wins 36 billion KRW Japanese ESS project... Accelerates Japan market expansion

Japan to Expand Renewable Energy to 36-38 Percent
Additional ESS Construction Projects Expected in Japan
LS Electric to Oversee ESS Construction and Operation

LS Electric has secured an energy storage system (ESS) construction project worth 36 billion KRW in Japan.

On the 11th, LS Electric announced that it recently won a project to build a grid-connected ESS power plant with a total project cost of 3.7 billion JPY (approximately 36 billion KRW) in the Watari area of Miyagi Prefecture, Japan. The project includes a 20MW (megawatt) power conversion system (PCS) and a 90MWh (megawatt-hour) battery. The project period extends until April 2027.

This project aims to reliably supply electricity generated in the Watari area to Tohoku Electric Power's transmission network, marking the largest grid-connected ESS project won by a Korean company in Japan. LS Electric will form a consortium with local construction companies to handle the design, procurement, and construction (EPC) as well as integrated operation and maintenance (O&M) for the actual ESS construction and operation.

An LS Electric official is inspecting the grid-connected ESS installed in the Hokkaido region of Japan. Provided by LS Electric

In 2022, LS Electric built Japan's first grid-connected ESS power plants in the Hokkaido and Kyushu regions, and last year, it was the only foreign company selected for the ESS subsidy support project in Tokyo.

LS Electric plans to accelerate its entry into the Japanese ESS market starting with this project. Japan officially recognized grid-connected ESS as one of the power plants through the revised Electricity Business Act. As the number of commercial operation projects for grid-connected ESS in Japan is expected to increase, expectations for additional orders for LS Electric have also grown.

The Japanese government aims to increase the share of renewable energy in power generation from 19.8% in 2020 to 36-38% by 2030. Currently, the scale of grid-connected ESS power sales in Japan is 9,000 kWh, which is small compared to Europe (1.4 million kWh), North America (2.23 million kWh), and China (1.8 million kWh). Installation costs for ESS, which are essential for renewable energy generation, are also subsidized. ESS installation costs are subsidized up to 50%, and power receiving equipment installation costs up to 75%.

An LS Electric official stated, "Japan is regarded as one of the largest global ESS markets," adding, "We will diversify our market strategies, including direct operation of solar power plants, and foster the smart energy business as a future growth engine."