|Korea Electric Power Corp. (KEPCO) CEO Cho Hwan-eik, third from right, with Sunverge CEO Kenneth Munson, second from right, in San Francisco after signing a memorandum of understanding to cooperate in the rapidly emerging virtual power plant (VPP) market, Thursday. Sunverge is a leading developer of the VPP platform, which integrates different power sources by using information and communication technologies and internet of things devices to provide a reliable supply. / Courtesy of KEPCO|
By Lee Hyo-sik
The Korea Electric Power Corp. (KEPCO) will enter the rapidly growing virtual power plant (VPP) market in the United States as part of efforts to find new growth engines.
The state-run utility said Friday that it signed an agreement with KOKAM, a local lithium polymer battery maker for energy storage systems (ESS), and Sunverge, the California-based renewable energy management firm and ESS maker, to conduct VPP business.
Sunverge has been developing a VPP platform that integrates conventional power sources with renewable energy by using information and communication technologies and internet of things (IoT) devices to provide a reliable power supply. An efficient and reliable ESS system is the key to running the VPP.
According to Sunverge, the ESS market in the U.S will reach $2.8 billion in 2021, up sharply from $280 million in 2016, in line with the increasing use of solar, wind and other renewable energy.
On Thursday, KEPCO CEO Cho Hwan-eik signed a memorandum of understanding (MOU) with Sunverge CEO Kenneth Munson and KOKAM officials in San Francisco.
The three companies agreed to take part in the $50 million project, initiated by the Los Angeles Department of Water and Power (LADWP), to install solar panels and ESS on fire stations, police stations and other public buildings, as well as creating a power management system. This VPP will supply electricity to public facilities in case of blackout caused by an earthquake or other natural disasters.
"The paradigm of the electricity industry has been changing drastically amid the ongoing Fourth Industrial Revolution," Cho said. "We just cannot sit idle and stick to our conventional business models. The latest MOU will serve as a significant turning point for KEPCO because it now can develop various new business models using ESS and the smart grid system."
Forming a partnership with Sunverge and KOKAM will present lucrative business opportunities for the utility, according to the CEO. He said KEPCO will evaluate the feasibility of the VPP business by undertaking the LADWP project and expanding its presence in the behind-the meter (BTM) market.
BTM is the energy storage system installed on the customer's side of the utility meter to reduce the bill.
"To become a leader in the BTM market, which requires the optimal integration of big data, IoT, artificial intelligence and other advanced technologies, KEPCO has to transform itself into a digital utility," Cho said. "We will fulfill our duty as a builder of a new renewable energy ecosystem."