Energy Storage System Deployment in South Korea: Key Drivers & Challenges

Introduction

The South Korean market is still among the most active Asian energy storage systems market, driven by grid stability requirements, renewable energy integration, and industrial power management needs. Although the first generation of energy storage systems was centered on the installation scale of lithium ion batteries, the second generation focuses on the reliability, safety, and life cycle of the systems. All these are contributing to the growing importance of battery recycling infrastructure.

Companies within the utilities and industrial sector view recycling readiness as an ESS purchase consideration into the long-term future. In January 2024, Korea Electric Power Corporation broadened its framework regarding ESS safety and lifecycle assessment by encouraging suppliers to provide evidence of recycling capabilities prior to system acceptance. Such an industry trend indicates industry assimilation with battery management post-use.

The major integrators, including LS Electric and Doosan Enerbility, are dealing with this by cooperating with approved recyclers to ensure regulatory compliance throughout the entire battery life cycle.

For comprehensive market forecasts, refer to the South Korea Battery Recycling Market report and its detailed contents.

Major Drivers, Trends and Challenges

A major push towards ESS deployment comes from the plan of extension of renewables in South Korea. The operation of solar and wind farms needs grid balancing, leading to an increased need for large scale battery systems, as these facilities need replacement cycles, albeit on a short cycle compared to EV batteries, leading to fast generation of recyclable battery units.

Another market trend includes the increasing number of safety-focused retrofits. Also, because of the incidents of battery fire in ESS systems in the previous years, providers are replacing traditional battery modules with safer alternatives. In August 2023, the Ministry of Trade, Industry, and Energy encouraged the replacement of ESS systems, which indirectly stimulated the demand for battery recycling.

Despite these factors, several challenges exist within the recycling of these components. ESS battery technology is often customized. This means ESS battery recycling is relatively tougher than the recycling of electric vehicle batteries, as the former needs to be disassembled.

In the forecast period, the deployment of energy storage systems is set to continue as a constant source of recycled batteries. Companies that sync contracts on ESS deployment with battery recycling contracts will improve their cost control and compliance posture.

Table of Contents

1. Introduction
2. Definition and Scope
3. ESS Deployment Segments
4. Utility and Industrial Demand
5. Battery Replacement Cycles
6. Safety and Compliance Standards
7. Recycling Integration Challenges
8. Outlook and Opportunities

Related Resources

Energy Storage Systems Market

Renewable Energy Market

Power Management System Market