Samsung SDI "Adjusting ESS Revenue Model... Need for Eco-friendly Electricity Tariff System"

Overseas, including the US, apply time-based differential pricing amid surging demand
Facilitates supply and safety management, expands corporate revenue models

South Korea does not apply differential pricing... "Safety investment contraction"

Jang Rae-hyuk, Vice President of the Large and Medium-sized Development Office at Samsung SDI, giving a lecture on "Strategies for Safe Energy Storage Systems (ESS)" at the 11th The Battery Conference held on the 17th. (Photo by Moon Chae-seok)

[Asia Economy Reporter Moon Chaeseok] Industry experts have suggested that since the demand for energy storage systems (ESS) varies by time of day, the government needs to implement reasonable tariff adjustments. As companies are sufficiently equipped with thermal runaway management capabilities to prevent fires from spreading between cells through real-time monitoring systems, the government should also refine the 'eco-friendly electricity tariff system' to help increase ESS industry profits, thereby creating a virtuous cycle that leads to better safety systems.

Jang Rae-hyuk, Vice President of Samsung SDI's Medium and Large Development Division, made these remarks during a lecture titled "Strategies for Safe ESS" at the 11th The Battery Conference held on the 17th at COEX in Samseong-dong, Gangnam-gu, Seoul.

The main point is that since energy demand varies by time of day, differential pricing should be applied so that higher prices are charged during peak demand periods to encourage rational energy consumption and safety management. Unlike Korea, which essentially operates under a fixed price system, overseas markets apply time-based differential pricing to suppress surges in electricity demand during so-called "peak out" periods. If usage exceeds the peak amount, fines or additional charges are imposed. This stabilizes electricity supply and demand and facilitates safety management, reducing the likelihood of large fires caused by thermal runaway.

Vice President Jang said, "Overseas, ESS operating hours have different prices set to guarantee various revenue models, whereas Korea operates mainly on a progressive rate system, so there is a need to adjust the ESS revenue model. Under Korea's tariff system, if profits decrease, companies are induced to cut costs in business areas where issues are not immediately visible, which leads to reduced investment in the most important aspect: safety."

Jang explained that Samsung is confident enough to assert tariff system reforms to the government. They have various components to control the "thermal runaway phenomenon," where a "short circuit" in battery cells causes fire to spread. They have established a system that prevents additives attached to the electrolyte from entering the battery system interior. Even if a short circuit does not occur inside the battery cell, they have an "emergency stop function" that immediately cuts off power supply to control thermal runaway. If fire prevention fails despite operating this battery management system (BMS), a "start-type multi-layer protection system" cuts off all contactors connected to the ESS. If this still cannot prevent heat transfer, extinguishing agents are directly injected. All these processes have passed certification from the global safety certification body UL. Because problems can still occur even with this system in operation, Jang said they have a system to inspect all their ESS units 24 hours a day, 365 days a year.

Regardless of Samsung's ESS management system level, the series of ESS fire incidents has made both the government and industry sensitive. At "InterBattery 2022," Korea's only and largest secondary battery exhibition, in response to a question from Moon Seung-wook, Minister of Trade, Industry and Energy, about the level of ESS fire safety inspections, Choi Yoon-ho, CEO of Samsung SDI, emphasized, "We have created a system that monitors about 96% of domestic ESS installation facilities. We are prepared to respond immediately if even a slight issue arises."

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