Government Opens Third ESS Central Contract Market, Seeks Operators for 1,180 MW in Projects

[Financial News] The Ministry of Climate, Energy and Environment announced on the 22nd that it would open this year's third energy storage system (ESS) central contract market and select ESS power generation operators for a total capacity of 1,180 MW. By region, the capacity is divided into 1,048 MW on the mainland and 148 MW in Jeju Province.
The ESS central contract market is a competitive bidding system launched by the Korea Power Exchange (KPX) to secure the ESS capacity needed in the future on a stable, long-term basis. This is the third time the market has been opened. Selected operators will sign 15-year long-term contracts with KPX and receive guaranteed revenue. Bidding will continue through November 11, with operators expected to be selected in November.
The scale of this third market is particularly notable. At around 560 MW each, the first and second markets were less than half the size of the latest offering. The move is seen as a response to rapidly growing demand for power storage driven by the expansion of artificial intelligence (AI) data centers and the increasing share of renewable energy generation.
Some details of the system have also changed. Until now, projects were limited to 'grid-management substations,' where power supplies could be restricted at all times because hosting capacity had reached its limit. Starting with this market, substations where the need to connect ESS is recognized will also be eligible. In the evaluation criteria, 'level of output control' will be integrated into the latter category, 'contribution to grid stabilization,' as the authorities determined that there was little practical benefit in distinguishing between the two.
An additional exception has been introduced for Jeju Province. For equipment with a long service life that can undergo repeated charging and discharging, the contract period can be extended by 10 years from the previous 15-year limit. This means ESS facilities capable of charging and discharging twice a day can receive contracts lasting up to 25 years.
The Ministry of Climate, Energy and Environment plans to disclose information on substations where connecting ESS could significantly ease grid overload, encouraging ESS facilities to be installed in optimal locations. Further details are available on the KPX website.
[email protected] Kim Dong-chan Reporter