"Let's Increase and See"... ESS Fires, Comprehensive Failures of Public and Private Sectors

Companies Jumping in Only for Profit
Money-Making Items Installed Rapidly
Policy Focused Solely on 'Expansion'

Government Has Distribution but No Safety
Renewable Energy-Linked ESS Installation
Thermal Runaway Safety Tests and Evaluations
Prevention Measures Expected Only Next Year

[Asia Economy Reporters Kim Hyewon and Moon Chaeseok] "Because the government policy framework was confined to focusing solely on industrial promotion, side effects have erupted in various places later on, making it difficult to identify the causes. Since the problems are not properly understood, the countermeasures are also vague administrative failures. How could it be otherwise that there is a saying that not knowing the cause is the cause itself?"

This is the perspective of a former senior official from the Ministry of Trade, Industry and Energy regarding the chain fire accidents of Energy Storage Systems (ESS). Amid the final disputes between the investigation team and the battery industry over the secondary cause analysis of the ESS fire accidents, criticism is rising that it is a comprehensive failure of both the public and private sectors, who focused solely on fostering new energy industries. When ESS was spotlighted as a "money-making item" with the launch of the Park Geun-hye administration in 2013, large corporations as well as small and medium-sized enterprises (SMEs) jumped into the ESS market based only on economic feasibility, resulting in safety management being neglected.

◆All ESS policies except one focused on 'expanding distribution' = On the 15th, after reviewing dozens of ESS-related policies issued by the Ministry of Trade, Industry and Energy during the ESS industrial boom period from 2013 to 2017, it was found that all but one policy focused mainly on "activating the ESS industry and expanding distribution." The one exception was related to certification and safety, involving the construction of an ESS testing and evaluation center in Chungbuk Innovation City, which was the constituency of Roh Young-min, then chairman of the National Assembly’s Industry, Trade and Energy Committee.

At that time, the government designated ESS as a core device for fostering new energy industries and opened the door wide for investments by companies and individual entrepreneurs. In April 2013, the government introduced a high-efficiency certification system that exempted factory inspections for small and medium-sized enterprises holding KS certification, reducing the time and cost required for certification, thereby lowering the entry barriers to the ESS market. In 2015, the government revised the electricity market operation rules to allow ESS participation in the electricity market and launched a pilot project for frequency regulation ESS with a budget exceeding 600 billion KRW from Korea Electric Power Corporation, creating a favorable atmosphere for promoting ESS. The government also enabled the use of electricity stored in ESS as emergency power and introduced a dedicated electricity tariff for ESS. Ministers visited sites such as LG Chem and LS Industrial Systems to encourage investments by large corporations and actively promoted government policy achievements.

Thanks to this, large corporations like LG Chem and Samsung SDI experienced a boom in sales of battery cells, the core components used in ESS. Small and medium-sized enterprises recklessly entered the business with the idea that "installing ESS easily allows you to sell electricity and make money quickly." The government launched financial products that reduced guarantee burdens and offered preferential interest rates to SMEs and individual entrepreneurs, and even introduced rental products that allowed business operations without initial investment, making ESS quickly recognized as a "goose that lays golden eggs."

However, in less than ten years, the lack of government regulation on safety and negligence in management by business operators pushed the market engulfed by fire to the brink of collapse. An industry insider said, "To put it bluntly, everyone and anyone was running an ESS business at that time," adding, "I think the government, companies, and individuals all focused on making money without paying attention to safety management."

◆Recurrent prevention measures remain at a theoretical level= The secondary investigation team is reported to have judged that among the five fires, one or two were caused by battery system defects, while the rest were due to poor installation management. However, apart from determining the causes of the accidents, the recurrence prevention measures are expected to remain at a theoretical level, raising concerns that uncertainty surrounding the domestic ESS market will rather increase.

In particular, practical measures such as installation standards for renewable energy-linked ESS, considered one of the fundamental causes of fires by experts, and thermal runaway safety test evaluations are again missing this time. Last June, the government commissioned the Korea Electric Power Research Institute with a research project titled "Development of Safety Evaluation Indicators Based on Demonstration for Securing ESS Safety and Establishment of Facility Standards," with a budget of 5.1 billion KRW, but the results will not be available until the end of next year.

The test evaluation system to prevent thermal runaway before companies commercialize their products will also be established only in the second half of next year. Although the ESS testing and evaluation center began operations on the 1st of this month, it can only conduct tests and evaluations of 1MW-class power conversion systems (PCS), and there is no thermal runaway certification facility, which is considered a cause of fires. A Ministry of Trade, Industry and Energy official said, "Until now, there was no institution or equipment in Korea that oversaw the ESS certification system, but from this month, PCS tests under 1MW can be conducted," adding, "Thermal runaway test facilities will be established by the second half of next year."

This content was produced with the assistance of AI translation services.