LG Energy Solution (LGES) has secured a deal with Hanwha Q Cells, marking the largest-ever battery energy storage system deal for the Korean battery maker. The deal, which is estimated to be worth around USD 1 billion, will be a significant milestone in the rapidly growing global ESS market.

Under the agreement, LGES will supply 4.8 gigawatt-hours of ESS batteries to Hanwha Q Cells. These batteries will be installed in La Paz County, Arizona. The supply is expected to extend until October 2026.

An ESS is a crucial component in enhancing the efficiency of renewable energy plants. It improves grid stability by storing excess energy and releasing it when demand rises. This deal comes at a time when the ESS market is witnessing rapid growth following the passage of the U.S. Inflation Reduction Act.

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The deal is expected to boost battery supply resiliency for the U.S. market amid the growing need for American-made ESS. The accumulated installment of ESS in North America is projected to surge threefold to 181 gigawatt-hours by 2035.

This partnership also marks a significant step for Hanwha Q Cells. As the biggest silicon-based solar energy provider in the United States, Hanwha Q Cells leads the country’s clean energy transition. The company has retained its No. 1 market share in the U.S. commercial and residential PV module markets. Through this partnership, Hanwha Q Cells aims to become a top-tier solar and energy storage developer and Engineering Procurement and Construction (EPC) provider in the U.S., securing a stable battery supply and procuring competitive product solutions.

For LGES, this deal secures another stable market demand in the mid-to-long term in the U.S. clean energy market, where the fastest growth is expected. This reinforces LGES's well-balanced business portfolio of three sectors: advanced automotive batteries, mobility and IT batteries, and ESS batteries.

Background of the Deal

Hanwha Group and LG Energy Solution (LGES) announced on January 16, 2023, that they would invest in building battery production facilities in the United States. The joint investment will pave the way for Hanwha to lead the rapidly growing energy storage market and future Urban Air Mobility business.

The two sides signed a memorandum of understanding in Seoul for comprehensive battery business cooperation for Energy Storage Systems (ESS) and other cleantech energy solutions. 
 

About Hanwha Q Cells

Hanwha Q Cells, commonly known as Q Cells, is a major manufacturer of photovoltaic cells. The company was founded in 1999 in Bitterfeld-Wolfen, Germany, and is now headquartered in Seoul, South Korea. It operates as a subsidiary of Hanwha Solutions, a part of the South Korean business conglomerate Hanwha Group.

Q Cells has manufacturing facilities in China, Malaysia, South Korea, and the United States. In 2019, it penetrated the U.S. market by building a 1.7 GW capacity module plant in Georgia. The company was the sixth-largest producer of solar cells in 2019, with shipments totaling 7.3 gigawatts.

Read: LG Energy Solution’s $5.5 Billion Battery Manufacturing Complex in Arizona Nears Completion

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