A New Phase in South Korea’s Energy Transition: Analysis of the Rapid Growth in the Renewable Energy and ESS Market by 2025
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Acceleration of South Korea’s Energy Transition: Market Status in 2025
In 2025, South Korea’s energy industry is experiencing an unprecedented wave of change. According to the latest statistics released by the Korea Energy Agency, renewable energy generation has increased by 28.4% year-on-year, reaching 78.2 TWh by November this year, accounting for 12.8% of total power production. Notably, solar power generation reached 42.3 TWh, a 34% increase from the previous year, while wind power grew by 24% to 21.7 TWh. The expansion of the government’s K-RE100 policy and companies’ carbon-neutral management strategies are key drivers behind this rapid growth.
The transformation in South Korea’s energy market is not limited to increased generation. The energy storage system (ESS) market is projected to reach a market size of 8.4 trillion KRW by 2025, with an explosive annual growth rate of 45.2%, as reported by the Korea Power Exchange. This highlights the growing importance of ESS as essential infrastructure to address the intermittency of renewable energy and ensure grid stability. Particularly, grid-connected ESS installations have increased by 67% year-on-year, reaching 3.2 GWh, positioning South Korea as a significant player in the global ESS market.
At the heart of this market growth are strategic investments and technological innovations by leading South Korean energy companies. Hanwha Solutions, headquartered in Pangyo, Gyeonggi Province, has expanded its solar cell production capacity to 12.5 GW this year and is constructing an additional 2.4 GW production line in Georgia, USA. The company announced that its solar business revenue increased by 31% year-on-year to 2.14 trillion KRW in the third quarter of 2025, a testament to the technological competitiveness and market share expansion of South Korean companies in the global solar market.
In the battery technology sector, South Korean companies are also making notable achievements. LG Energy Solution, headquartered in Yeongdeungpo-gu, Seoul, recorded a 78% year-on-year increase in ESS battery shipments, reaching 15.4 GWh in the first half of 2025. The company is particularly strong in the North American utility market, securing large-scale ESS projects totaling 4.2 GWh in Texas and California. Additionally, Samsung SDI announced a 1.2 trillion KRW investment in next-generation solid-state battery technology development in Suwon, Gyeonggi Province, aiming for commercialization by 2027. Solid-state batteries, with 40% higher energy density and three times faster charging speed than conventional lithium-ion batteries, are recognized as a key technology for ESS efficiency innovation.
Global Competitive Landscape and Strategic Positioning of South Korean Companies
The competitiveness of South Korean companies in the global renewable energy market is becoming more evident amid fierce competition with Chinese and European companies. According to the 2025 report by the International Renewable Energy Agency (IRENA), global solar installations increased by 73% year-on-year to 346 GW, with China accounting for 55% or 190 GW. However, in the high-efficiency premium market, South Korean companies have secured a unique position. Hanwha Solutions’ HJT (Heterojunction) cell technology achieved an efficiency of 22.8%, surpassing China’s LONGi Solar at 21.6% and Germany’s SolarWorld at 21.2%.
The competitive dynamics in the ESS market are even more complex. While China’s CATL holds 43.2% of the global ESS battery market, leading the pack, South Korean companies are strong in the high-performance grid-scale ESS sector. LG Energy Solution holds a 22.4% market share in the U.S. utility market, surpassing Tesla’s Megapack at 18.7%. The superior fire safety and long-term durability of Korean batteries are recognized, with insurance premiums 15-20% lower than Chinese products.
Doosan Enerbility, a comprehensive energy solutions company headquartered in Changwon, demonstrates unique positioning. The company recorded a 156% year-on-year increase in offshore wind turbine orders, reaching 2.4 GW in 2025, and has secured technology to compete with Denmark’s Vestas and Germany’s Siemens Gamesa in the 8 MW large turbine sector. The company’s offshore wind turbines achieve an operational rate of over 90%, significantly exceeding the global average of 85%, attributed to the combination of Korea’s shipbuilding technology and precision manufacturing know-how.
In the hydrogen economy sector, South Korean companies are making significant technological advancements. POSCO Holdings has expanded by-product hydrogen production to 37,000 tons annually at its Gwangyang and Pohang steel mills and is accelerating the development of hydrogen reduction steelmaking technology. The company has set a goal to expand green hydrogen production capacity to 500,000 tons by 2030, equivalent to about 8% of the current global green hydrogen production. According to Hyundai Motor’s hydrogen roadmap announced at its headquarters in Yangjae-dong, Seoul, NEXO sales increased by 34% year-on-year to 12,400 units in 2025, and exports of the hydrogen commercial vehicle XCIENT surged to 2,100 units.
The overseas expansion of South Korean energy companies is also accelerating. SK Innovation has expanded the annual production capacity of its battery plant in Georgia, USA, to 35 GWh, and including its plants in Hungary and Changzhou, China, it has secured a global production capacity of 100 GWh. This surpasses Tesla’s total battery demand of 85 GWh, showcasing the status of Korean battery companies in the global supply chain. By securing local production capacity eligible for IRA (Inflation Reduction Act) benefits in the North American electric vehicle market, they have established differentiated competitiveness from Chinese battery companies.
Despite this growth, South Korean energy companies face several challenges. The volatility of raw material prices is identified as the most significant risk factor, with lithium prices rising by 23% year-on-year to $13,500 per ton in 2025, increasing battery manufacturing costs. Additionally, as the U.S.-China tech rivalry intensifies, Korean companies face the dual challenges of diversifying supply chains and enhancing technological independence. Securing alternatives in rare earths and key material sectors, where dependence on China is high, is urgent, and government-led K-Battery Belt projects and material, parts, and equipment self-reliance policies are being pursued.
Nevertheless, the long-term outlook for South Korea’s energy industry is positive. According to the Korea Development Institute (KDI), the South Korean renewable energy market is expected to grow at an average annual rate of 18.3%, reaching 47 trillion KRW by 2030. The ESS market is also projected to expand at an average annual rate of 22.7%, reaching 19 trillion KRW by 2030. This indicates an opportunity for South Korea, as a nation possessing key technologies and products of the energy transition era, to further strengthen its competitiveness in the global market. The technological superiority of South Korean companies in next-generation battery technology, offshore wind, and green hydrogen is expected to continue, serving as a growth engine for the South Korean energy industry over the next 5-10 years.
This article is intended for informational purposes only and is not a solicitation or recommendation for investment. Investment decisions should be made based on individual judgment and responsibility, and thorough research and expert consultation should be sought when investing in the mentioned companies or technologies.
