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With a gas combined-cycle power project emerging as the leading candidate for the first US-bound investment under the Korea-US tariff agreement, growing demand and a shifting competitive landscape in the American energy storage system (ESS) market are opening new doors for Korean ESS companies.
As the spread of AI data centers and the expansion of renewable energy generation reshape the US power supply structure — elevating ESS to critical grid-stabilization infrastructure — Korean firms have been urged to align their strategies with the rapidly changing market and seize new entry opportunities.
KOTRA, the Korea Trade-Investment Promotion Agency, laid out this assessment Wednesday in a report titled "Structural Changes in the US Energy ESS Market and Response Directions," which analyzes shifts in the American ESS market and offers entry strategies for Korean companies.
The report examines a market environment in which US ESS demand is rising rapidly — driven by a growing share of renewable energy and a surge in power demand from AI data centers — while supply chains are being restructured amid tightening tariffs on Chinese goods and stricter regulations on prohibited foreign entities (PFE). It also identifies specific product-level entry opportunities for Korean companies.
According to the report, the share of solar and wind power in total US electricity generation is projected to grow from about 18 percent in 2025 to about 21 percent by 2027, and widening output fluctuations by time of day are driving up demand for ESS to manage the imbalance. US data center power demand is also expected to surge from 52 gigawatts in 2025 to 115 gigawatts by 2030, further boosting demand for ESS installations near data centers to ease grid connection delays.
Data centers supplied by gas combined-cycle power plants — the leading candidate for the first US investment project — would also require ESS installations if developed as islanded grids to reduce dependence on transmission and distribution networks.
The competitive landscape is also shifting. The US government is supporting ESS investment through incentives such as the Section 48E clean electricity investment tax credit, while simultaneously tightening domestic procurement requirements and supply chain restrictions related to PFE regulations.
ESS projects that broke ground after Dec. 31 last year face restricted access to tax credits if they involve material support from a PFE. Section 301 additional tariffs on Chinese lithium-ion batteries for ESS use also rose from 7.5 percent to 25 percent starting in January.
As a result, the competitiveness of ESS suppliers now extends beyond product price to encompass component origin and supply chain traceability, local production and assembly, delivery responsiveness, and the capacity for installation, commissioning and long-term maintenance.
The report identifies six promising areas for Korean companies: battery module and pack assembly components such as busbars and electrical parts; cables, wiring and rack- and container-applicable components; power conversion and grid-connection equipment including power conditioning system (PCS) components, transformers and switchgear; control and communications equipment such as energy management systems (EMS) and SCADA; safety systems covering cooling, fire detection and suppression; and operations management solutions including remote monitoring and predictive maintenance.
The report also provides detailed coverage of US technology trends, the supply chain ecosystem and procurement structure, product-level entry conditions and strategies, and approaches to managing supply chain entry risk.
"The US ESS market is seeing demand growth and supply chain restructuring happening at the same time, which is widening the window for Korean companies to enter," said Lee Geum-ha, head of KOTRA's North America regional headquarters. "We will actively support Korean companies in breaking into the US ESS supply chain through product-level technology verification, joint development with customers, and the establishment of local production and technical support systems."
Meanwhile, KOTRA held a Korea-Chile Business Partnership event in Santiago, Chile, on Thursday (local time), timed to coincide with President Lee Jae-myung's South American tour.
The event drew 32 Korean companies focused on hallyu consumer goods and the biotech and healthcare sectors, along with more than 50 buyers and project owners from Chile, Brazil, Argentina, Peru, Ecuador and other Latin American countries for business consultations.
likehyo85@heraldcorp.com
