South Korea's third centralized contract market for energy storage systems, or ESS, could be substantially larger than the first two rounds, with industry estimates ranging up to around 1 GW. Rising renewable-energy deployment and planned semiconductor and AI data-center investments in the country's southwest are expected to increase the need for grid-balancing storage.
According to industry sources on Aug. 30, the procurement volume for the third ESS auction could rise from the previous mainland target of 500 MW to as much as about 1 GW. The rationale is that annual additions of 500 MW may not be sufficient to support the government's target of deploying 100 GW of renewable energy by 2030, particularly because projects selected in the upcoming auction are expected to be completed by the end of 2028. The final volume and timetable have not been confirmed.
The Korea Power Exchange is expected to begin the tender process with a public notice in September. The first centralized ESS contract market called for 540 MW—500 MW on the mainland and 40 MW in Jeju—with projects totaling 563 MW ultimately selected. The second round also called for 540 MW, and preferred bidders were selected for projects totaling up to 565 MW.
The government's three megaprojects, including a semiconductor cluster and AI data-center investments in the Honam region, could further support demand. Large new power consumers in a region already concentrated with renewable generation would increase the need for ESS to stabilize the grid and manage variable supply.
The second auction adjusted the weighting of price and non-price criteria from 60:40 to 50:50. It also placed greater emphasis on fire safety, contributions to industrial competitiveness and supply-chain assessments. The industry expects the third round to maintain that direction. The Korea Power Exchange's second-round tender documentation confirms that price accounted for 50% of the evaluation.
For South Korea's battery makers, ESS has become a strategic market as the prolonged slowdown in electric-vehicle demand intensifies the need to diversify end markets. Battery suppliers are negotiating pricing and supply terms with multiple power generators and consortiums ahead of the tender.
Generators, independent power producers and renewable-energy developers will submit bids directly. Battery companies will participate as equipment suppliers, rather than as the formal bidders. Still, a larger market—and evaluation criteria that reward domestic manufacturing capacity—could favor suppliers with established delivery records and sufficient local production capability.
“If volumes expand, excessive price competition among battery companies could ease somewhat,” an industry official said. “With domestic manufacturing contributions factored into the evaluation and available production capacity limited, companies with proven supply experience and manufacturing scale could hold a relative advantage.”
