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SK On wins over half the capacity in Korea’s second gov't ESS tender

Published: 12 Feb. 2026, 21:27 Updated: 12 Feb. 2026, 21:40

An SK On battery plant is seen in Seosan, South Chungcheong. [SK ON]

Korean battery maker SK On won more than half of the capacity awarded in Korea’s second government tender for energy storage systems (ESS), officials said Thursday, marking a rebound for the battery maker as EV demand slows.

The Ministry of Climate, Energy and Environment and the Korea Power Exchange said SK On secured 284 megawatts (MW) across three of the seven project sites, or 50.3 percent of the total awarded capacity. The company failed to win any projects in the first round last year but ranked first in the second.

Authorities awarded contracts for 565 MW — 525 MW on the mainland and 40 MW in Jeju — exceeding the initially announced 540 MW. The projects will be built at seven sites, including Namchang, Unnam, Eupdong, Jindo, Haenam and Hwawon in South Jeolla, as well as Pyoseon in Jeju.

As global EV sales lose momentum, battery makers are leaning on ESS to keep factories running and offset weaker EV battery orders. ESS products use many of the same battery cells and production lines as EVs, allowing companies to redirect output and absorb fixed costs.

Samsung SDI, which captured 76 percent of the first-round capacity, secured 202 MW in the second round, accounting for 35.7 percent of the total. The company also won projects at three sites, including one in Jeju. Across the first and second rounds combined, Samsung SDI still holds more than half of the total awarded capacity.

An energy storage system facility equipped with Samsung SDI batteries operates in California. [SAMSUNG SDI]

LG Energy Solution, which secured 24 percent in the first round, won 79 megawatts in the second round, about 14 percent of the total, and captured one site.

Global demand for ESS continues to expand as AI-driven data center construction accelerates. The global ESS market will grow from 235 gigawatt-hours (GWh) in 2024 to 618 GWh in 2035, market research firm SNE Research said.

Although the overall size of the second tender is similar to the first round’s 563 MW, the results shifted significantly among companies, in part due to changes in the evaluation criteria.

In the first round, bid price carried a 60 percent weighting in the evaluation, while nonprice criteria accounted for 40 percent. In the second round, authorities revised the scoring to 50 percent for each.

Officials said they placed greater emphasis on fire safety and domestic industrial contributions in the evaluation process.

“We focused on evaluating the fire safety of ESS facilities and their contribution to industrial competitiveness,” an Environment Ministry official said.

SK On highlighted its plan to convert production lines at its plant in Seosan, South Chungcheong, to manufacture 3 GWh of lithium iron phosphate (LFP) batteries for ESS. The company also committed to sourcing key battery materials, including cathodes, electrolytes and separators, from domestic suppliers.

Industry sources say LFP batteries offer relatively high fire safety and lower costs. SK On is also reviewing a plan to expand ESS battery production capacity to 6 GWh, depending on future orders.

SK On also equipped its batteries with a diagnostic system based on electrochemical impedance spectroscopy, which can detect warning signs up to 30 minutes before a fire.

As the EV market slowdown continues, major battery makers increasingly rely on the ESS business for growth.

Vehicles for export are parked at Pyeongtaek Port in Pyeongtaek, Gyeonggi on May 20, 2025. [NEWS1]

LG Energy Solution aims to secure more than 90 GWh in ESS battery orders this year, exceeding last year’s target. Samsung SDI plans to increase ESS revenue by more than 50 percent from a year earlier, while SK On targets more than 20 GWh in orders.

The three companies are expected to compete again in the third central contract market tender scheduled for June.

“Beyond the size of the contracts, securing volume in a government-backed project can serve as a key reference for future business,” a battery industry source said.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY NA SANG-HYEON [[email protected]]