LS Electric has successfully won a large-scale Energy Storage System (ESS) project in Japan, positioning itself to lead the rapidly growing local grid-connected ESS market, which is benefiting from government subsidies.
On April 10, LS Electric announced that it has secured a project to build a grid-connected ESS power plant with a total project value of 3.7 billion yen (approximately 36 billion won) in the Watari area of Miyagi Prefecture. The project includes a 20 MW Power Conversion System (PCS) and a 90 MWh battery system, scheduled for completion by April 2027.
The ESS system enhances the efficiency of electricity usage by storing power generated at the power plant and supplying it when needed.
This project aims to reliably supply electricity produced in the Watari region to the Tohoku Electric Power transmission network through the ESS system, making it the largest grid-connected ESS project led by a Korean company in Japan.
LS Electric will partner with local construction firms to form a consortium that will handle the design, procurement, and construction (EPC) as well as integrated operations and maintenance (O&M) for the ESS.
Following the establishment of Japan's first grid-connected ESS power plant in Hokkaido and Kyushu in 2022, LS Electric was also recognized as the only foreign company selected for Tokyo's ESS subsidy program last year, further establishing its business capabilities and technological reliability.
The company plans to accelerate its strategy to penetrate the Japanese ESS market with this project as a starting point.
Japan has officially recognized grid-connected ESS as one of its power plants through the revised Electricity Business Act. As the number of commercial grid-connected ESS projects in Japan is expected to increase, LS Electric anticipates further contract opportunities.
The Japanese government aims to expand the proportion of renewable energy in its electricity generation from 19.8% in 2020 to 36-38% by 2030. It provides financial support for installation costs to promote the deployment of ESS, which is essential for renewable energy generation. ESS installations can receive subsidies of up to 50%, while power conversion devices can receive up to 75%.
Currently, the scale of electric power sales from grid-connected ESS in Japan is at 9,000 kWh, which is relatively low compared to Europe (1.4 million kWh), North America (2.23 million kWh), and China (1.8 million kWh).
“Successfully securing a large order in Japan, which is evaluated as one of the largest ESS markets globally in terms of scale and growth potential, is highly significant," said an official from LS Electric. "We will diversify our market strategy, including the direct operation of solar power plants in Japan, to ensure that our smart energy business becomes a solid future growth driver.”
