In a government-led next-generation energy storage system (ESS) project that mobilized all three major South Korean battery manufacturers, Samsung SDI overwhelmed its competitors by securing nearly 66% of the total volume. With this project serving as a prelude to the large-scale Central Contract Market auction scheduled for September, the result is being hailed as further validation of Samsung SDI’s contract-winning competitiveness.
On the 10th, South Korea’s Ministry of Climate, Energy and Environment announced the operator selection results for the “AI-Powered ESS Deployment Support Project.” A total of nine consortiums were named as final successful bidders, including VPPLab, LG Energy Solution, KEPCO KDN, SK Eternix, HD Hyundai Electric, Gridwiz, Korea East-West Power, and Hyundai Engineering & Construction. The project was designed to install ESS on distribution lines in regions such as South Korea’s Honam area and Jeju Island, where surging renewable energy generation has saturated grid capacity, and to efficiently control charging and discharging using AI technology. It is a large-scale national initiative backed by 558.6 billion won (approximately $371.3 million) in government funding over five years starting this year.
The nine selected operators won contracts covering a total of 32 distribution lines. Among these, six operators adopted Samsung SDI battery cells, securing battery supply rights for 21 lines, representing 65.6% of the total. In capacity terms, this amounts to approximately 420 megawatt-hours (MWh). Samsung SDI swept up the volume by partnering with VPPLab, HD Hyundai Electric, and Hyundai Engineering & Construction.
The flagship product driving Samsung SDI’s landslide victory is the integrated ESS solution “Samsung Battery Box (SBB) 1.5.” Housed within a 20-foot container, the product integrates high-nickel NCA (nickel-cobalt-aluminum) prismatic battery cells, modules, racks, and safety devices, enabling immediate operation upon grid connection. Industry observers believe the high structural stability and energy density characteristic of prismatic batteries received favorable evaluations from project operators.
While LG Energy Solution and SK On trailed significantly behind Samsung SDI in battery supply volume, they made their presence felt through distinctly different strategies. LG Energy Solution formed the consortium “Sunshine Distribution Grid Energy” with Shinhan Asset Management, participating directly as an operator responsible for overall ESS construction and AI-based operations, going beyond simple battery supply. As the only one among South Korea’s top three battery makers to secure operator qualification, LG Energy Solution captured seven lines (140 MWh)—the maximum volume a single operator could secure—achieving a 22% share. The company plans to supply lithium iron phosphate (LFP) batteries, with Shinhan Asset Management handling financial structuring to operate the project for 20 years.
SK On partnered with Korea Midland Power and Gridwiz to supply its “GridON” ESS container based on LFP pouch cells for four lines (80 MWh), representing 12% of the total volume.
This auction drew intense interest from the battery industry as it is considered a barometer for the government-led ESS Central Contract Market. In the first Central Contract Market auction, Samsung SDI swept 76% of the total volume to claim a dominant first place, while SK On successfully counterattacked with a 50% share in the second auction. With Samsung SDI once again seizing the initiative in this AI distribution grid project, the prevailing analysis is that the company has secured a favorable position ahead of the 3rd Central Contract Market auction scheduled for September.
An industry insider commented, “Samsung SDI’s market dominance, built by securing more than half the volume in the previous two government auctions, combined with the differentiated safety of its prismatic batteries, appears to have had a compounding effect on this outcome.”