South Korea’s trade ministry announced Thursday it will invite bids from private companies to build and operate a large energy storage system (ESS) totaling 540 megawatts (MW) — enough to power about 1 million apartments for an hour. The project aims to help reduce electricity waste from renewable sources by storing surplus power during low-demand periods and releasing it when demand is high. The government plans to install 500MW of storage on the mainland and 40MW on Jeju Island, with all systems scheduled to begin operating by 2026.

Companies selected through the bidding process will manage the storage units for 15 years, under direct control of the Korea Power Exchange, the national grid operator. The project is expected to cost about $725 million (1 trillion won) and will be awarded based on both pricing and non-price factors, such as contributions to domestic industry and battery recycling capabilities. This is South Korea’s largest public storage initiative to date, expanding sharply from a 65-megawatt pilot project in Jeju last year.

WHY IT MATTERS

South Korea’s latest energy storage bid will place privately built batteries under public control for the first time, allowing grid operators to store electricity when supply is high and release it when demand rises. This marks a shift in how the country manages the volatility of solar and wind power. Instead of treating batteries as optional, market-driven tools, the government is now positioning them as essential national infrastructure to keep the power system stable.

The project also signals how South Korea may finance its energy transition. Rather than spending public money upfront, the state will guarantee private firms steady long-term payments, spreading the cost over time through electricity bills. If successful, this approach would allow the government to build critical infrastructure without increasing the budget. It also channels support to domestic battery companies by encouraging them to supply and manage large storage units. If the model proves effective, it may eventually lead to more power systems that are privately financed but state directed.