South Korea selects bidders for Jeju battery ESS tender

South Korea today selected three power utilities as bidders for its tender to build and operate long-cycle battery energy storage (ESS) in Jeju province.

The winning bid will secure a term tender of 15-20 years, which will determine the price and volume through the ESS bidding market. Providers will be paid at the pre-contracted price when the facility is operating in the future, the country's energy and industry ministry (Motie) said in August when it issued the tender.

The bidding was done with a total volume of 65MW/260MWh, with 35MW allocated for eastern volumes and 30MW allocated for western volumes. State-owned utility Korea East-West Power won the eastern proportion of 35MW/140MWh, while LS Electric won 10MW/40MWh and state-owned Korea Southern Power won 23MW/92MWh for the west allocation, according to the Korea Power Exchange. The first ESS facilities are expected to be completed in early 2025.

A total of 13 power providers from 11 companies with a total capacity of 206MW participated in the tender. Competition resulted in the bid price dropping by about 15pc from initial expectations of the successful bid price, although Motie did not disclose the price.

ESS is a flexible resource that contributes to system stabilisation and can respond to the volatility of renewable energy, Motie said. But its distribution has been limited because of difficulties in recovering investment costs in the current unified electricity market.

"With this bid we will further promote the distribution of ESS, which will play an important role in stabilising the Jeju system while also promoting the establishment of a power market tailored to the characteristics of each power source," said Motie director of electricity policy Lee Ok-heon. "We plan to actively review and prepare for the opening of the next central contract market."

By Tng Yong Li