Samsung SDI and LG Chem, the nation’s top two battery makers, are now vying for the global leadership in the Energy Storage System, a core energy-saving grid technology.

ESS is a device that stores electricity when the demand is low and provides stored electricity when the demand is high. This improves energy efficiency and stabilizes operations of the electricity grid.

The two South Korean rivals long competed in the battery markets where they together hold over half of global market share.

Samsung SDI ranked at first place in the small-sized battery segment with 28.2 percent, closely followed by LG Chem with 17.5 percent. LG, however, far outpaces Samsung in car batteries given that its list of suppliers largely eclipse SDI.

Now the competition has been taken to the realm of ESS, which is growing increasingly significant due to global and nationwide energy conservation campaigns.

SDI closed a deal with the U.K. S&C Electric Company last month in a partnership with Germany-based Younicos to provide a 10 megawatt-hour ESS for power stability in the United Kingdom. Britain’s largest ESS pilot project will be launched in Leighton Buzzard, 69 kilometers northwest of London.

Most of the unstable power frequency issues stemming from obsolete electrical grid in the region will be resolved when the project is completed next July, Samsung SDI officials said.

Earlier this year, SDI signed a contract with VEMAG, a German electric supplier, to provide a 10 MWh ESS, a joint project in which the South Korean firm provides the ESS while Younicos supplies the power conversion system and energy management system.

LG Chem is also spurring ESS development in the global market. The company was selected last month as a battery supplier for Germany-based SMA Solar Technology’s self-generated solar ESS, “Sunny Boy Smart Energy.” This wall-mounted device was developed through years of joint R&D with SMA.

In May, the global battery maker was also chosen for Southern California Edison’s ESS pilot project. The outcome of the project financed by the United States Department of Energy will be shared by power suppliers throughout the United States.

“The result is expected to play a pivotal role in the utilization of ESS in the renewable energy sector,” industry sources said.

The company plans to mass-produce the batteries based on the demonstration result, LG Chem said.

The global ESS market is expected to grow 53 percent annually on average to reach 58 trillion won by 2020, from 16 trillion won this year, according to Navigant Research.

During a visit to an LG Chem battery plant last month, Energy Minister Yoon Sang-jick said, “the government will heighten its effort to expand ESS by setting a policy goal of systemizing energy saving and implementing real-time intelligent power management.”

By Shin Ji-hye (shinjh@heraldcorp.com)