Rapid Growth of the South Korean Energy Storage System (ESS) Market and Accelerated Global Competition
Editor
As of December 2025, the global energy storage system (ESS) market is experiencing unprecedented growth, with South Korea achieving notable success in this field. According to the latest report from Bloomberg New Energy Finance (BNEF), the global ESS market size is expected to reach $120 billion by 2025, representing a 42% increase from the previous year. South Korea holds the third-largest market share globally, following China and the United States, and accounts for 18% of the global market in the large-scale grid-connected ESS sector.
The rapid growth of the South Korean ESS market is the result of multiple factors. According to the ‘K-Battery Alliance 2030’ plan announced by the Ministry of Trade, Industry and Energy, the South Korean government plans to invest a total of 40 trillion won in the ESS sector by 2030, aiming to increase its global market share from the current 18% to 35%. Under this policy support, Korea Electric Power Corporation established a total of 5.2GWh of large-scale ESS across 22 regions nationwide in the first half of 2025 alone, a 78% increase compared to the same period last year.
Technologically, innovations by Korean companies are prominent. In October 2025, Samsung SDI announced the commercialization of ESS battery cells utilizing next-generation solid-state battery technology. These batteries boast a 40% improvement in energy density compared to existing lithium-ion batteries and a charge-discharge cycle life of 15,000 cycles, 1.5 times that of current products. Samsung SDI’s technological innovation is expected to directly impact business viability by reducing ESS operating costs by 15% per kWh. Based in Cheonan, Gyeonggi Province, Samsung SDI plans to establish an annual production capacity of 50GWh for ESS batteries by 2026 based on this technology.
LG Energy Solution is also demonstrating strong competitiveness in the ESS sector. The Seoul-based company reported that its ESS segment revenue in the third quarter of 2025 increased by 89% year-on-year to 3.24 trillion won. The increase in orders from the North American region was particularly notable, attributed to the synergy of tax benefits from the U.S. Inflation Reduction Act (IRA) and expanded local production capacity. LG Energy Solution produces 25GWh of ESS batteries annually at its Holland, Michigan plant, with plans to expand this to 40GWh by 2026.
Changes in the Competitive Landscape of the Global ESS Market
As competition intensifies in the global ESS market, China’s Contemporary Amperex Technology (CATL) maintains its position as the market leader. Headquartered in Ningde, Fujian Province, CATL accounted for 32% of the global ESS battery market in the first half of 2025, with strong price competitiveness based on LFP (lithium iron phosphate) battery technology. CATL’s ESS batteries are priced at an average of $180 per kWh, approximately 25% cheaper than Korean products.
However, Korean companies are pursuing differentiation through technology and quality. In November 2025, SK Innovation announced the next-generation NCM (nickel-cobalt-manganese) 9.5.0.5 battery, which significantly improves energy density by increasing nickel content to 95%. This battery, developed by Seoul-based SK Innovation, offers a 35% improvement in energy density compared to existing products and provides a 10-year warranty, ensuring stability. The company plans to target the premium ESS market from 2026 based on this technology.
In the U.S. market, Tesla maintains a unique position. Headquartered in Austin, Texas, Tesla is strong in the large-scale ESS market with its Megapack system utilizing its self-developed 4680 battery cells. Tesla’s Megapack offers a storage capacity of 3.9MWh per unit and can reduce installation time by 40% compared to previous designs due to its modular design. In the first half of 2025, Tesla’s ESS segment revenue increased by 156% year-on-year to $2.8 billion, accounting for about 8% of total revenue.
Interestingly, system integration capability is becoming increasingly important in the ESS market. Companies providing turnkey solutions that integrate power conversion systems (PCS), energy management systems (EMS), and cooling systems, in addition to supplying batteries, are gaining competitive advantages. Doosan Enerbility launched an ‘integrated ESS solution’ in August 2025, aligning with this trend. Headquartered in Changwon, Gyeongsangnam-do, the company announced that it improved system efficiency by 8% compared to previous systems by combining its self-developed PCS and EMS.
Expansion of Renewable Energy and Surge in ESS Demand
The most significant driver of ESS market growth is the expansion of renewable energy. According to the International Renewable Energy Agency (IRENA), global renewable energy generation capacity surpassed 4,500GW in 2025, a 14% increase from the previous year. The demand for ESS to address the intermittency of solar and wind power generation is surging. In South Korea, under the government’s ‘RE100 K-Green New Deal’ policy, the share of renewable energy generation reached 22.5% of the total in 2025, driving market growth through mandatory ESS installation.
A specific example can be seen in the large-scale solar power complex established by Korea Electric Power Corporation in Sinan County, Jeollanam-do. This solar complex, with a total capacity of 2.1GW, includes an ESS with a capacity of 840MWh, ensuring grid stability. Samsung SDI and LG Energy Solution each supplied 420MWh of batteries for this project, while Hanwha Aerospace handled PCS and system integration. Seoul-based Hanwha Aerospace is recognized for strengthening its position in the ESS market through this project.
Korean companies are also achieving notable success in overseas markets. In the first half of 2025, Samsung SDI signed a contract to supply a total of 1.2GWh of ESS to the UK National Grid ESO. This contract is the largest single project in Samsung SDI’s history, with a contract value of approximately $1.8 billion. This is interpreted as a recognition of Korean ESS technology’s excellence, alongside the expansion of renewable energy under the UK’s net-zero policy.
The advance of Korean companies continues in the U.S. market as well. In September 2025, LG Energy Solution announced a five-year contract to supply a total of 3.5GWh of ESS batteries to Duke Energy, one of the largest power companies in the U.S. The expected revenue from this contract is approximately $4.2 billion, marking an important milestone in LG Energy Solution’s expansion of its North American ESS business. Duke Energy plans to triple its renewable energy generation by 2030 to achieve carbon neutrality, leading to a surge in ESS demand.
However, alongside the rapid growth of the ESS market, several challenges are also emerging. The most significant issue is the rise in raw material prices. The prices of key battery raw materials such as lithium, nickel, and cobalt have increased by an average of 28% compared to 2024, significantly raising ESS manufacturing costs. According to the London Metal Exchange (LME), the price of lithium reached $25,000 per ton, an 85% increase from its lowest point in 2023. This rise in raw material prices is pressuring the profitability of ESS manufacturers and affecting the economics of some projects.
Another challenge is ensuring safety. In the first half of 2025, there were 15 ESS fire incidents worldwide, a 25% increase compared to the same period last year. Fires at large-scale ESS facilities, in particular, are causing significant economic losses and increasing social concerns. Consequently, governments and industries worldwide are strengthening safety standards, and in South Korea, the Ministry of Trade, Industry and Energy announced the ‘ESS Safety Management Enhancement Plan’ in November 2025. According to this plan, nitrogen fire suppression systems must be installed in large-scale ESS facilities of 1MW or more, and the safety functions of battery management systems (BMS) will be enhanced.
Looking ahead, the growth trend of the ESS market is expected to continue for the foreseeable future. According to the latest report from Wood Mackenzie, the global ESS market size is projected to reach $320 billion by 2030, with an average annual growth rate of 22%. The Asia-Pacific region is expected to account for 45% of the total market, with South Korea anticipated to emerge as the second-largest market in the region after China. Under these growth prospects, Korean ESS companies are likely to accelerate their global market expansion alongside technological innovation, with next-generation battery technology and AI-based energy management system development emerging as key competitive factors.
