by Jason Deign, Solarplaza
South Korea is looking to procure significant levels of storage for grid regulation.
Kokam, a Korean battery supplier, has deployed the world’s largest lithium-nickel-manganese-cobalt (NMC) oxide battery system for frequency response amid growing demand for grid-scale storage in South Korea. The 24 MW, 9 MWh system was installed alongside a 16 MW, 6 MWh NMC battery in January and follows the implementation of a 16 MW, 5 MWh lithium-titanate oxide storage array by Kokam last August.
All the storage assets are intended to provide frequency response and reduce the need for spinning reserves at South Korea’s dominant utility, the Korea Electric Power Corporation (KEPCO). KEPCO believes the Kokam battery systems will help it to switch to lower-cost, more highly efficient generation sources and save around USD$13 million a year in fuel, which should cover the cost of storage three times over.
The utility is planning to install up to 500 MW of battery storage-based frequency regulation capacity by 2017.
In Korea, said Ike Hong, vice president of Kokam's Power Solutions Division, “about 5% of spinning reserve is wasted on maintaining frequency. With 500 MW they could save a lot of money and replace fossil-fuel consumption.” Frequency response represents the biggest current opportunity for energy storage in South Korea, but it is far from the only game in town.
The country is expected to install a further 50 MW to 100 MW a year of battery storage for uninterruptible power supplies (UPS) and peak shaving, Hong said. Up to around 40 MW of UPS and peak shaving storage was installed last year.
Additionally, efforts are underway to equip a sizeable proportion of the country’s hundreds of inhabited islands with renewable energy-only microgrids incorporating storage. Already around 16 such island microgrid projects have been completed. Finally, there is a potentially significant market for wind farm-attached storage across South Korea. Hong said up to around 30 MW of wind energy storage was installed last year and the amount could reach 80 MW in 2016.
Overall, Hong said South Korea’s energy storage market had been growing at a rate of almost 200% a year for the last three years, and was set to continue at that pace until 2017 at least.
However, the opportunities for foreign storage vendors and developers are limited by the dominance of South Korea’s big storage companies. Kokam currently has about a third of the market, alongside LG Chem and Samsung SDI. With most energy storage contracts being offered through government tenders, and with no residential battery market to speak of, it appears South Korea is likely to remain a tough nut for outside interests to crack.
“Since last year, some foreign companies, such as PCS [power conversion system] companies, are getting into this market,” said Hong, “but the battery side is pretty local.”