Samsung’s Ambitious Energy Storage Plans Take On China

China, with its growing need for energy storage systems, is emerging as the world's biggest market.
Published: Thu 21 Aug 2014

Samsung SDI, the battery-making affiliate of Samsung and China's Sungrow Power Supply have established a joint venture to produce energy storage systems. The venture will handle sales, logistics and the development of energy storage solutions.

The two companies aim to build an energy storage system (ESS) manufacturing facility in the Hubei Province of China. The plant’s construction will start in the first half of 2015 and should be completed by late 2015. Mass production of the energy storage systems will be launched shortly after that.

Sungrow is a manufacturer of power supply equipment and renewable energy plants. This company has ranked first in the Chinese photovoltaics inverter market with over 30% market share and ranked second in the world. This joint venture will create the potential to deliver renewable power plants with storage at the core.

Responding to China’s energy storage needs

China’s electricity demand is predicted to grow substantially over the next few years. China also has the world's largest wind farms and the largest capacity for producing photovoltaic modules. Nowhere else in the world is such a large sum of money being invested in renewable energy.[Engerati-China’s Growing Need for Electricity Storage.]. It would therefore make sense that energy storage systems hold great business potential in China.

"China is emerging as the world's biggest market for ESS solutions, which are lithium-ion battery intensive," explains Samsung SDI spokesman Seo Hae-su. "ESS solutions could be used as a key energy source for power generators, wind power, solar plants and other renewable energy."

Samsung SDI hopes that the venture may strengthen its competitiveness in the battery business, a sector which the company wants to emphasize, says Seo Hae-su.

Samsung’s ambitious energy storage plans

Samsung SDI is soon to announce additional energy storage system deals in the US in the latter half of this year, according to Kim Soon-ho, a manager at the company's energy storage system division. This year, the firm aims to supply a 100MW of energy storage systems.

The Samsung Group of technology affiliates are increasingly betting on energy storage system solutions and battery technology in order to reduce its heavy reliance on the volatile and highly-competitive consumer business. The company has identified battery and bio-similar as one of its next cash generators, according to Kim Soon-ho.

“As Samsung's indisputable advantages lie in manufacturing, on-time delivery, output commitment and better pricing, the nation's top conglomerate is reaching out to non-consumer fields such as car batteries and various other automotive solutions,” adds Kim Soon-ho.

On a related note, a Samsung SDI executive, Nho Sang-soo, said recently that more of its staff from its plasma business unit has been transferred to the battery division, a move aimed at prioritizing its battery management division.

SDI also acquired Cheil Industries to expand its battery business beyond small-sized batteries, which are currently being used in Smartphones and tablets.

The company is also in talks with Chrysler, Mahindra of India and Volkswagen to expand its battery partnership.

Samsung SDI and other electric vehicle battery makers are increasingly betting on energy storage systems to hedge their bets as the market for electric vehicle batteries has not met expectations.

It will be interesting to see how battery prices (and quality) compare with Tesla’s. [Engerati-Tesla’s Gigafactory to Lower Battery Energy Storage Costs.]