The Rapid Growth of South Korea’s Energy Storage Market and Changes in Global Competitive Dynamics

As of November 2025, the global energy storage market is experiencing unprecedented growth, with South Korea playing a significant role. According to the International Energy Agency (IEA), the global energy storage system installation capacity is expected to increase by 47%, from 42GWh in 2024 to 62GWh in 2025. At the center of this growth are South Korean companies, with LG Energy Solution (Yongin, Gyeonggi Province) and Samsung SDI (Suwon, Gyeonggi Province) leading with a 25% share of the global market. The Korea Energy Agency forecasts that the South Korean energy storage market itself will grow by 34%, from 3.2 trillion won in 2024 to 4.3 trillion won in 2025.

Several factors are contributing to this rapid growth. Firstly, the South Korean government’s Green New Deal policy and K-Battery Belt strategy are key drivers. The Ministry of Trade, Industry and Energy announced an investment of 15 trillion won in the energy storage sector by 2025, with 60% focused on battery technology development and production facility expansion. The establishment of an ESS cluster centered around Naju, Jeollanam-do, and Cheongju, Chungcheongbuk-do, is also underway, leading to a surge in investments from related companies. Simultaneously, the spread of renewable energy policies is significantly increasing the demand for energy storage, with South Korea’s solar and wind power installation capacity exceeding 25GW as of 2025, leading to an explosive increase in ESS demand for grid stability.

From a technical perspective, South Korean companies possess world-class competitiveness, particularly in lithium-ion battery technology. As of the third quarter of 2025, LG Energy Solution has commercialized next-generation batteries achieving an energy density of 300Wh/kg, surpassing China’s CATL (Ningde, Fujian Province) at 280Wh/kg and the United States’ Tesla (Palo Alto, California) at 260Wh/kg. Samsung SDI has also made breakthroughs in solid-state battery technology, announcing that its all-solid-state batteries, entering pilot production in the second half of 2025, offer 40% higher energy density and 50% improved safety compared to conventional lithium-ion batteries.

In terms of market competition, South Korean companies are fiercely competing with Chinese and American rivals. China’s CATL recorded a 37% share in the global ESS battery market in 2024, but this fell to 34% in 2025 as South Korean companies intensified their pursuit. Meanwhile, LG Energy Solution expanded its share from 18% to 22%, and Samsung SDI from 7% to 11%. Notably, South Korean companies are strong in the premium market, capturing a 45% share in the large-capacity ESS market of 1MWh or more, attributed to their high technological prowess and quality reliability.

Restructuring of the Global Supply Chain and Strategic Responses by South Korean Companies

As of 2025, the global energy storage industry is undergoing significant changes with the restructuring of supply chains. This is due to the implementation of the U.S. Inflation Reduction Act (IRA) and the European Union’s Green Deal Industrial Plan, prompting countries to establish domestic battery supply chains. In response to these changes, South Korean companies are actively pursuing overseas investment strategies. LG Energy Solution began constructing an ESS-dedicated plant in Michigan, USA, with an investment of $1.8 billion in the first half of 2025, aiming for an annual production capacity of 20GWh upon completion in 2027. Samsung SDI is also investing 1.2 billion euros to establish Europe’s largest ESS production base in Göd, Hungary, set to begin full-scale operations in 2026.

This expansion of overseas investment is not merely a relocation of production bases but holds significant strategic positioning. South Korean companies are circumventing tariff barriers through local production while establishing close cooperative relationships with local customers. In the U.S. market, they have successfully secured long-term supply contracts with major ESS integrators such as Tesla, Fluence Energy (Arlington, Virginia), and Wärtsilä Energy Storage (Helsinki, Finland). LG Energy Solution, for instance, secured contracts in 2025 guaranteeing $22 billion in revenue over the next five years, a 180% increase from the previous year.

In terms of raw material procurement, South Korean companies’ strategies are gaining attention. Amid increasing price volatility of key raw materials like lithium, nickel, and cobalt, South Korean companies are actively pursuing upstream supply chain integration. POSCO Holdings (Pohang, Gyeongsangbuk-do) is investing $800 million in the Salar del Hombre Muerto lithium mine in Argentina, planning to produce 25,000 tons of lithium annually from 2026, sufficient for 50GWh of battery production. SK On (Seoul) is also investing $3 billion in a nickel smelting project in Indonesia to establish a vertically integrated system. As a result of these raw material procurement efforts, the cost competitiveness of South Korean companies’ batteries has significantly improved, with the production cost per kWh reaching $85 by 2025, approaching the $78 of Chinese companies.

On the technology innovation front, the development of next-generation battery technologies is fiercely underway. South Korean companies are focusing on post-lithium-ion technologies such as all-solid-state batteries, sodium-ion batteries, and lithium-metal batteries. Samsung SDI began operating a pilot production line for all-solid-state batteries in October 2025, achieving an initial yield of 70%, two years ahead of industry expectations. LG Energy Solution is developing next-generation batteries using silicon nanowire anode technology, targeting commercialization by 2026. This technology is expected to enhance energy density by 30% and halve charging time compared to current levels.

Market Segmentation and New Growth Drivers

As the energy storage market matures, segmentation by application is accelerating. As of 2025, the global ESS market is divided into utility-scale (large-scale grid), commercial and industrial (C&I), and residential segments, each with different technical requirements and market characteristics. The utility-scale market accounts for 65% of the total, with large capacity, long lifespan, and safety as key requirements. South Korean companies are particularly strong in this market, with LG Energy Solution successfully completing the 300MW/450MWh Victorian Big Battery project in Victoria, Australia, garnering industry attention.

The commercial and industrial ESS market is experiencing rapid growth in 2025, accounting for 25% of the total market and growing by 52% year-on-year. The growth drivers in this market include rising electricity prices, power quality issues, and the spread of ESG management. There is a surge in ESS adoption for uninterruptible power supply and peak power management in data centers, manufacturers, and hospitals. Samsung SDI has launched a modular container-type ESS targeting this market, recording orders worth 120 billion won in the third quarter of 2025 alone. This product reduces installation time by 50% and maintenance costs by 30% compared to existing solutions.

The residential ESS market, while relatively small, is experiencing the fastest growth. As of 2025, it accounts for 10% of the total market, with an annual growth rate of 78%. This growth is driven by demand from households with solar power facilities seeking to increase self-consumption and save on electricity bills. In South Korea, the expansion of residential ESS subsidy policies from the second half of 2025 is leading to rapid market growth. Currently, the number of households with residential ESS installations exceeds 150,000, and this is expected to expand to 300,000 by 2026. LG Energy Solution has launched a 10kWh residential ESS targeting this market, reducing size by 40% and price by 25% compared to previous products.

The ESS market linked to electric vehicle charging infrastructure is also emerging as a new growth driver. As of 2025, there are 2.8 million electric vehicle charging stations worldwide, with 70% of those equipped with fast chargers also operating ESS. This is essential for load balancing and improving charging efficiency, particularly in urban areas. In South Korea, SK On is supplying ESS to the E-pit charging network led by Hyundai Motor (Seoul) and Kia (Seoul), with plans to install a total of 2GWh of ESS at 1,000 locations by the end of 2025. Bloomberg New Energy Finance forecasts that this charging infrastructure-linked ESS market will grow from $1.2 billion in 2024 to $8.5 billion by 2030.

Meanwhile, the development of industry-specific ESS solutions is actively underway. Semiconductor manufacturers require ESS with millisecond response times to protect sensitive production processes from momentary power outages, and Samsung SDI’s ultra-capacitor hybrid ESS meets these needs. Petrochemical companies are adopting hybrid systems combining fuel cells and ESS using hydrogen byproducts from processes, achieving over 90% energy self-sufficiency. This industry-specific solution market is estimated at $3.5 billion as of 2025, growing at an annual rate of 25%.

In the second half of 2025, the most notable trend in the energy storage market is the integration of artificial intelligence (AI) and the Internet of Things (IoT) technologies. South Korean companies are focusing on developing AI-based energy management systems (EMS) to maximize the operational efficiency of ESS. LG Energy Solution’s AI-EMS analyzes various data in real-time, such as weather forecasts, power demand patterns, and electricity market prices, to automatically establish optimal charging and discharging schedules. ESS applying this system shows an average operational revenue improvement of 18% compared to previous systems. Samsung SDI has also developed a predictive maintenance system using digital twin technology, achieving an ESS operation rate of over 95%, significantly higher than the industry average of 87%.

In summary, the global energy storage market is expected to maintain an average annual growth rate of 28% from 2025 to 2030, reaching a market size of $120 billion by 2030. At the center of this growth, South Korean companies are expected to further solidify their competitive edge through technological innovation, the establishment of a global production network, and vertical integration of raw materials. As the commercialization of next-generation battery technologies approaches, the market dominance of leading technology companies is expected to strengthen further. However, uncertainties such as the low-cost offensive of Chinese companies and the strengthening of domestic company protection policies in the U.S. and Europe persist, making strategic responses by South Korean companies increasingly important.