An alliance between Samsung SDI and Sungrow has put the energy storage industry on alert for further tie-ups between battery and inverter makers.
In July, the two companies announced the official start of a joint venture called Sungrow-Samsung SDI Energy Storage Power Supply Co, in Hefei, China. News of the venture first emerged in 2014.
GTM Research energy storage analyst Brett Simon said “it’s certainly possible” that other firms could emulate the union of Samsung SDI, one of South Korea's two biggest electric-vehicle battery makers, and Sungrow, the world’s largest PV inverter manufacturer.
“Samsung SDI is a top-tier lithium-ion battery vendor, and it's possible this announcement may signal further joint ventures between battery and inverter vendors,” said Simon. “Such partnerships may better leverage the expertise of both companies, and may offer opportunities to access new customers.”
However, he cautioned: “It remains to be seen to what extent these partnerships will occur, and at what size in terms of both dollars and megawatt-hours deployed.”
There are still scant details on the Sungrow-Samsung SDI venture beyond what Sungrow has published in a press release. Neither company responded to requests for information from GTM.
In press materials, the two companies said the joint venture represented a $170 million investment, aimed at providing integrated energy storage systems that include lithium-ion batteries with power conversion and energy management systems.
The venture aims to have an annual production capacity of 2 gigawatt-hours of storage technology.
“The energy storage market is expected to be a key area where Sungrow is to expand its business based on close cooperation with Samsung,” said Professor Renxian Cao, president of Sungrow, in the press note.
“Sungrow has always been committed to technical innovation, and we have strong faith in our ability to build benchmarks in the global energy storage market.”
Sungrow also announced that the joint venture already closed its first couple of deals, worth 10 megawatt-hours and 8 megawatt-hours of storage, respectively, but did not reveal further details of the projects.
Elsewhere, Samsung SDI and Sungrow are said to be partners in Guoke Energy Conservation, a company set up to complete up to 80 megawatt-hours of energy storage demonstration projects in China.
Guoke Energy Conservation was registered with the Chinese authorities to consult on and build “energy conservation and...environmental protection technology,” according to company documentation.
“Given both companies' headquarters locations, I'd expect China to be one of their key markets of interest in the near future, and expect they are exploring other Asian markets as well, such as South Korea and Japan,” said Simon.
Until now, collaboration between battery makers and inverter manufacturers has mainly revolved around ensuring compatibility. Israel’s SolarEdge, for example, has developed a product called StorEdge that is designed for use with Tesla Powerwall batteries.
And earlier this year, Tesla confirmed the Powerwall was also compatible with Sunny Boy inverters from SMA, which leads the inverter market by revenue. These initiatives amount to little more than product modifications, however.
Last year, LG Chem unveiled a multi-year collaboration agreement with Austin, Texas-based power conversion system maker Ideal Power.
“The two companies will coordinate to jointly market and sell LG Chem's lithium-ion batteries and Ideal Power's power conversion systems for commercial demand charge reduction and microgrid applications,” said Ideal Power in a press release.
It is not clear whether this collaboration has yielded results, although the two companies are supplying components for a wider integrated storage offering, the Power IQ 30, from Gexpro.
The system, which was recently approved by the Hawaiian Electric Company for use on grid and self-supply systems, also features software and controls from Geli.
Both Samsung SDI and LG Chem faced a setback in the Chinese market earlier this year when they failed to secure battery certifications for electric vehicles in the country.
The problem, reportedly because their battery factories in China had been in operation for less than a year, left both companies potentially ineligible to benefit from Chinese state subsidies worth up to as much as 40 percent of the value of a new electric car.