LG Energy Solution Acquires ESS System Specialist 'NEC Ensol'... Accelerating Optimization of ESS Business

[Asia Economy Reporter Donghoon Jeong] LG Energy Solution has acquired 100% of the shares of the U.S. company NEC Energy Solutions, a specialist in the ESS (Energy Storage Solution) SI (System Integration) sector. The strategy is to enhance order competitiveness by providing customers with optimized integrated systems ranging from batteries to software in the ESS field.

On the 17th, LG Energy Solution announced that it acquired its subsidiary NEC Ensol from Japan's NEC Corporation and will establish a new corporation called 'LG Energy Solution Vertech.'

The newly established corporation plans to undertake ESS business planning, design, installation, and maintenance to provide customized solutions for each customer. It will also offer all services, including integrating essential equipment such as batteries and PCS, to optimize the ESS business.

With the recent growth of the global ESS market, many customers are increasingly demanding solutions that include the SI role from battery companies. They require unified responsibility and warranty for contracts as well as quality reliability. LG Energy Solution explained the acquisition background, stating, "We judged that internalizing SI capabilities was necessary to respond to customer demands and strengthen business competitiveness."

The acquired company, NEC Ensol, was established by Japan's NEC in 2014 after acquiring the ESS SI business of the U.S. company A123 Systems. It has its headquarters and R&D center in the U.S. It has executed over 140 global ESS projects centered on SI business worldwide, including Australia, London, and Brazil. Its sales in 2020 were approximately 240 billion KRW, maintaining a high growth rate of about 60% annually over three years since 2018.

In particular, NEC Ensol is highly regarded for its excellent IT capabilities, including its self-developed EMS (Energy Management System) software 'AEROS,' which is core to the ESS SI business, and its maintenance capabilities based on over 10 years of global operational data.

Based on this acquisition, LG Energy Solution plans to accelerate its global ESS market leadership by leveraging a complete business capability that provides not only battery supply but also SI. It also expects to enhance project order competitiveness through internalizing core SI business capabilities such as EMS software and maintenance.

LG Energy Solution Vice Chairman Youngsoo Kwon stated, "Through this acquisition, we have gained competitiveness in ESS integrated solutions tailored to customer requirements beyond simple battery supply," adding, "We will further strengthen differentiated solutions and quality competitiveness to lead the global ESS market."

Meanwhile, with the expansion of renewable energy policies worldwide, the ESS market linked to this is also expected to grow rapidly. According to global market research firm SNE Research, the global ESS market size recorded 11 gigawatt-hours (GWh) in 2019 and 20 GWh in 2020, and is projected to grow at an average annual rate of 35% to reach 302 GWh by 2030.

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