Hanwha, LG Energy Solution Form Battery Production Alliance
LG Energy Solution and Hanwha Group join forces to enhance U.S. battery supply for energy storage systems and develop battery technologies for urban air mobility.
In a recent announcement, large-scale battery maker, LG Energy Solution, Ltd. (LGES), announced that it has signed a Memorandum of Understanding (MoU) with Fortune Global 500 Company, Hanwha Group, along with its subsidiary companies (Hanwha Corporation/Momentum, Hanwha Solutions, and Hanwha Aerospace).
Together, the MoU partners will invest in establishing battery production lines for energy storage systems (ESS) in the U.S. This investment is intended to strengthen America’s influence in the fast-growing ESS market. Under the MoU, LGES and Hanwha Aerospace will work together on developing battery innovations for urban air mobility (UAM).
LGES and Hanwha Group sign MoU for joint investment focusing on bolstering battery supply for ESS in the U.S. Image used courtesy of Adobe Stock
The Energy Storage Market
Energy storage for variable renewable energy integration and grid stabilization is necessary to facilitate the energy transition and help secure a net zero emissions future. Looking ahead, the energy storage market is set to grow exponentially as the goal continues toward net zero.
Just how much energy storage might be available in the next five years? Well, according to a report from the International Energy Agency (IEA), the global installed storage capacity is expected to grow by up to 56 percent in this time frame, reaching more than 270 gigawatts (GW) by 2026.
The installed capacity of utility-scale batteries is projected to rise six-fold over five years. Pumped storage hydropower (PSH) plays a substantial role in electricity storage expansion, contributing 42 percent globally. Contributing to the largest source of installed storage capacity (which the IEA says is three times larger than batteries), PSH is projected to contribute 200 GW by 2026.
PSH growth will be led by China, contributing three-quarters of capacity growth globally. China will also be leading the expansion of concentrating solar power (CSP), which is expected to grow by a mere 2.6 GW compared to PSH within the forecast period.
According to LGES, the U.S. power grid ESS market is projected to expand by as much as nine-fold between 2021 and 2031, jumping from 9 to 95 GW hours (GWh). This follows the signing into law of the 2022 Inflation Reduction Act. A portion of the act focuses on allocating government spending toward lowering carbon emissions through storage, carbon capture, and clean hydrogen technologies.
Boosting U.S. Battery Supply
Q Cells, an energy solutions provider and one of the world’s largest photovoltaic (PV) cell manufacturers, is owned by Hanwha Solutions. Early this year, Qcells announced an investment of over $2.5 billion to construct a fully-fledged solar supply chain in the U.S. The investment is expected to generate around 2,500 jobs in Georgia.
For Q Cells, the joint investment with LGES provides an opportunity to provide greater stability around battery supply (in particular, ESS batteries) for the U.S. power system market.
Q Cells is one of the world’s largest solar PV manufacturers. Image used courtesy of Pixabay
For LGES, the MoU has allowed the company to keep up with market demand in the clean energy space, which is expected to grow rapidly. The company has also enabled the growth of other business operations in three sectors, including mobility and information technology (IT) batteries, automotive batteries, and ESS batteries.
By founding a new company in the form of LG Energy Solution Vertech Inc. in 2022, LGES aims to provide customers with a secure battery supply chain and streamline ESS integration.
Automotive Battery Expansion
A producer of aircraft engines, Hanwha Aerospace, will work with LGES to develop batteries dedicated for use in UAM.
UAM utilizes electric-powered aircraft to move passengers and goods within urban environments and has the potential to revolutionize the way people travel in cities, providing efficient and cost-effective solutions for short trips. It can also reduce traffic congestion, provide access to remote areas, and provide access to areas not served by traditional ground transport. UAM could be used for medical emergencies, search and rescue operations, tourism, freight delivery, and other applications.
A global provider of smart solutions and process equipment, Hanwha Corporation/Momentum, will discuss potential business opportunities with LGES concerning battery manufacturing equipment. LGES is currently working alongside automotive companies General Motors, Honda, and Stellantis to build joint venture plants in North America. LGES plans to grow its production capacity in South Korea, Poland, and the United States (Michigan).