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LG CNS, Entering the US ESS Market with Energy and IT Services

LG CNS has entered the U.S. market with ESS (Energy Storage System) integration.

There is an increasing amount of interest centered on the development of differentiated IT based energy industry1

As the current battery industry, also known as the ESS industry, continues to grow in size, the SI industry capable of managing projects with existing industry processes is standing out. ESS must be designed, structured and managed to offer services to each customer in specialized industries and IT is at the core of those services.

Also, since the development, consumption and storage of efficient and environmentally friendly energy is becoming more important due to climate change, the importance of the IT service industry that has distinguished itself from the existing energy market with IT based energy has received a lot of attention.

Following this trend, LG CNS, as a leader in ESS SI, has applied SI capabilities to the energy industry and offers turn-key processes for the planning, design, structure and management of the energy industry.

LG CNS has successfully proven technological feasibility with the construction of the world’s largest peak management ESS system (23MWh) at an LG Chem plant in Iksan, Korea. Factories and buildings around the world implement TOU (Time Of Use) according to the season and time of day and the LG CNS ESS system has the ability to reduce electricity fees through load management and adjusting to according to the environment. This functionality actively supports load management of national electricity.

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LG CNS FR ESS container developed for KEPCO (left) / 1MW Frequency Regulation ESS to be constructed for a Holiday Inn in New Jersey (right)

Also, FR (Frequency Regulation)[1] is proving to be valuable in the global ESS industry. FR is using the fuel generator’s certain capacity as FR resource for maintaining the minimum quality of power, and ESS can be used as a reserve power for the generator. ESS increases FR performance in thermal energy generation and also improves efficiency.

KEPCO, the Korean power company, has been constructing an FR ESS system since 2014. LG CNS has received praise for their impressive construction and management since joining the KEPCO project.

Emergence on the US ESS Market with Energy and IT Services

With their experience working on the KEPCO frequency regulation ESS construction, LG CNS has now entered the U.S. market. The U.S. has introduced a pay-for-performance regulation under FERC (Federal Energy Regulatory Commission) Order 755 for frequency regulation performance that boosts the economic feasibility of ESS. The ESS based frequency regulation service market is also expanding in response to the new and renewable energy market that has emerged due to the difficulties experienced in the reconstruction of deteriorating carbon thermal power plants.

LG CNS is utilizing their experience with KEPCO to construct a 1MW frequency regulation ESS at a Holiday Inn in New Jersey that is scheduled to go live in July of 2016. This project will also implement a container type frequency regulation ESS that protect against blackouts and natural disasters.

This is the first time LG CNS has entered the U.S. electricity markets. With LG CNS’ certified SI and EPC capabilities, LG CNS will be able to enter the market export the new energy business model being advanced by the Korean government and the Department of Industry, Trade and Resources.

FR ESS, a new technology changing the existing paradigm of the traditional electricity markets, can develop as a worldwide technology of the new leading export industries.

North American ESS Market Forecast

The majority of the U.S. utility markets have open electricity markets and statistics show that there are frequent blackouts occurring in those markets. Due to the capabilities and efficiency of ESS in power markets, ESS is receiving the most compensation for installation and management. Thus, the assistance service market is being vitalized in low capacity generator markets.

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U.S. Frequency Regulation Market Forecast (Source: Pike Research)

Especially, PJM[2] district, an advanced utility markets benchmarked even in Korea, is actively installing frequency regulation ESS in order to operate a stable power grid and improve the diminishing power quality in the region.

LG CNS Vice President, Jiseob Kim, said, “We are changing our method of providing service from existing methods in the energy market to match the environments and needs of our customers and LG CNS has a medium and long-term vision to grow as a major player in the North American energy market. In order to make this vision a reality, the LG Group will not only combine their global standard solutions but present a successful business model for customers through partnerships with leading North American Solutions providers”.

LG CNS is conducting projects with corporations such as KEPCO to create the world’s first 100% green energy independent island in Ulleungdo, Korea. LG CNS has plans to develop a complex independent smart micro grid solution with new and renewable energy, ESS and EMS to make this project possible.

Written by LG CNS PR Team


[1] FR is a solution for maintaining the minimum quality of power which is a process of maintaining the standard frequency (60Hz) by equaling the supply and demand. Nowadays, thermal power plants in Korea is dealing with the changes of supply and demand by possesing 5% of the generator’s capacity as a reserve power to steadily maintain the frequency. For this reason, generator cannot be used 100% and lacking amount is being filled with high-cost generator such as LNG, fuel, and etc.. Also, KEPCO is compensating the opportunity cost for the plants maintaining the reserve power which ends up spending massive amount of expense in FR. [back to the article]
[2] PJM is 13 northeastern states, including Pennsylvania, New Jersey, and Washington D.C., of the U.S., containing more than 800,000GWh power markets. These days, FR ESS installment is starting in earnest. [back to the article]

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