Korea's US investment triggers 2nd wave of orders for ESS, power gear makers

Korea's anticipated power infrastructure investment in the United States may lead to a second surge of orders for Korean battery and power equipment manufacturers. The increasing electricity demand from artificial intelligence (AI) data centers is driving the need for energy storage systems (ESS) and grid equipment. On July 22, the Korean government unveiled its inaugural U.S. strategic investment initiative, as part of a $350 billion investment portfolio.

The $22.3 billion project focuses on constructing a natural gas-fired power plant in Encinal, Texas, intended to cater to the growing electricity demand from semiconductor facilities and AI data centers. The venture is also projected to spur demand for equipment essential for storing, distributing, and stabilizing power, thereby enabling system manufacturers to secure more orders from the world's largest economy.

Among the key components of the project is ESS, which represents one of the largest revenue areas for Korean battery makers such as LG Energy Solution, Samsung SDI, and SK On. The electric vehicle industry, however, remains in a difficult position. Energy storage systems can accumulate electricity during periods of low demand.