South Korea’s Samsung SDI says it has signed a preliminary deal with Chinese solar inverter manufacturer Sungrow Power Supply. The companies will form a joint venture to make energy storage systems in China and plan to build a production facility by next year. Samsung SDI, a maker of electronics components, did not disclose how large the joint investment will be and said the location has not been decided.
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 lagged expectations.
The companies aims to gain advantages in the Chinese ESS market through this partnership with local production increasing business synergy with Xian automotive battery plant.
“This will become the cornerstone of pioneering and dominating the Chinese ESS market expected to grow greatly in the future,” said Sangjin Park, a CEO of Samsung SDI.
Samsung SDI chose Sungrow as its partner for penetrating into the Chinese ESS market through Sungrow’s superior quality and technology in power network and PV inverters, which are key components of an ESS system.
Sungrow Power Supply manufactures power supply equipment for solar PV and wind power projects. The company’s products range from grid-connected PV inverters, wind power converters, and distributed power supply. It also provides development, construction, and operation management for renewable energy projects.
China has the biggest demand for ESS adopting lithium-ion rechargeable batteries in the world. In fact, the Chinese market is becoming dominated by ‘ESS for power supply’ installed at renewable energy power plants for power transmission and distribution network, PV energy, wind power, etc.
Last year, the global market demand for ESS adopting li-ion batteries reached about 700MWh, from which China took more than 20% (150MWh). The ESS demand in China will continuously grow by 2020, taking about 15% (2,250MWh) of the global demand. Out of this total demand for ESS in China, ‘ESS for power supply’ is expected to take over 60%, dominating the ESS market.
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