Joint investment in the US ESS production line
Technology development such as air conditioning system
Hanwha Group and LG Energy Solution will cooperate in every aspect in order to preoccupy the future battery market, such as energy storage system (ESS) and urban air transportation (UAM). They will join forces to build a battery production line in the United States.
On the 16th, LG Energy Solution exchanged a memorandum of understanding (MOU) with three affiliates of the Hanwha Group, including Hanwha Q Cells, Hanwha Aerospace, and Hanwha Equipment (Hanwha Momentum) at The Plaza Hotel in Jung-gu, Seoul.
Both parties plan to initiate specific cooperation by forming a task force (TF), and decided to cooperate on materializing EES first.
ESS is a device that can store electricity using a battery. It is similar close to Hanwha’s solar power business. The system is essentially becoming one unit when using the stored electricity obtained from sunlight in ESS.
Hanwha decided to jointly invest in LG Energy Solution’s exclusive battery production line for ESS in the US. The two companies plan to jointly develop technologies for integrated system solutions such as air conditioning system and electronic parts included in ESS. Through this opportunity, Hanwha Q Cells plans to stably secure batteries for the US electricity market.
It has become important to provide stable supply and of products as the demand for ESS for the stabilization of the power grid and the efficient use of electricity is increasing with the recent expansion in the introduction of renewable energy. The US power grid ESS market is expected to grow more than nine folds on an annual basis from 9 gigawatt hours (GWh) in 2021 to 95 GWh in 2031 with the passage of the Inflation Reduction Act (IRA). 95GWh is an equivalent amount of electricity charging used by 40 million Koreans per day. Accordingly, both companies shared the interests; Hanwha for a stable supply of products and LG for securing a source of demand in the US market.
Hanwha Momentum, which provides process automation equipment for the secondary battery, solar power, and display industries, is also cooperating with LG Energy Solution domestically and in overseas. They will be cooperating with battery manufacturing facilities related collaborations.
LG Energy Solution is currently building a joint battery production plant in North America with major auto manufacturers such as GM (Ultium Plants 1, 2, and 3), Stellantis, and Honda. It has investment plans to expand the production capacity of existing single factories in Ochang, Korea, Poland, and Michigan. Hanwha Momentum will begin to supply equipment to these LG battery plants.
Hanwha Aerospace will also jointly develop special-purpose batteries that can be applied to UAM. UAM is necessary in long flights; hence battery technology development must be supported. Hanwha and LG have entered into a strategic cooperative relationship in the fields where batteries are used for not only for current source of sales but also for future growth engines.
An official from Hanwha said, “We will have maximum synergy effect by cooperating in various fields such as battery manufacturing facilities and special purpose battery development both domestically and internationally.” An official from LG Energy Solution said, “We expect to make a great contribution in taking the competitiveness of each company’s battery-related business to the next level through this cooperation.”
By Staff Reporter Jiwoong Kim (jw0316@etnews.com)