SK D&D Co., a property and renewable energy developing subsidiary of SK Gas Co., struck a deal with Daesung Industrial Gases Co. to build and operate an energy storage system (ESS), a move that would cement its position as an industry leader.

The South Korean company said on Monday it will install energy storage facilities with a combined capacity of 110 megawatt hour (MWh) at four industrial sites of Daesung Industrial Gases, the country’s second largest industrial gas supplier.

Under the deal, SK D&D will oversee the entire process from financing, procurement, installment to operation and maintenance for 15 years. SK D&D plans to start commercial operation at the plant in Daejeon this month and complete the construction of the ESS facilities at the plants in Gumi, Yeocheon and Ulsan within the first half of next year.

The new ESS facilities are expected to help Daesung Industrial Gases save about 90 billion won ($82.7 million) in electricity costs during the period when SK D&D operates the facilities.

Energy storage is a technology that captures and stores energy for later use, enhancing overall energy efficiency. The ESS market is growing rapidly on expectations of rising global demand for smart energy solutions.

SK D&D aims to boost its ESS capacity to 700 MWh by late next year to reinforce its leadership position in the energy storage market.

“We will bolster our ESS-based capabilities in energy consumption analysis and broaden our business scope to include peer-to-peer energy platforms and virtual power plants,” said an unnamed official at SK D&D.

Last month SK D&D signed a memorandum of understanding with Gridwiz to jointly carry out ESS projects. Gridwiz is Korea’s leading developer of the power management system, a core technology to run an ESS.

Shares of SK D&D closed Tuesday down 1.37 percent at 32,450 won.

By Moon Ji-woong and Kim Hyo-jin

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]