SK On introduces 20-year warranty for grid-scale energy storage

SK On adopted a 20-year warranty framework for utility-scale energy storage systems on Nov. 9, 2026, challenging established rivals across North American and East Asian power grids.

The battery maker structured the long-term guarantee to qualify for South Korea's third central energy storage tender, which auctions 1,180 megawatts, or about 7.08 gigawatt-hours, of grid capacity.

That auction represents more capacity than the 1,128 megawatts awarded across the first two national rounds combined, where SK On secured 284 megawatts, or 50.3% of the second round.

Long warranties have become a prerequisite for grid operators managing levelized cost of storage (LCOS) — the lifetime expense of discharging each unit of electricity.

Utility developers finance storage installations on multi-decade debt schedules. Short warranty durations force asset owners to budget early replacement capital, inflating overall project expenditure.

Samsung SDI set the early domestic benchmark by offering 20-year warranties on its Samsung Battery Box series, pairing prismatic nickel-cobalt-aluminum cells with integrated cooling loops.

Samsung SDI captured 629 megawatts across the first two national tenders, representing 55.8% of all awarded capacity, by guaranteeing 95% round-trip efficiency over long operating periods.

LG Energy Solution also extended coverage up to 20 years for its JF2 grid-scale platform, combining lithium iron phosphate (LFP) chemistry with artificial intelligence management software.

LG Energy Solution withdrew from the third central tender on Nov. 5, 2026. The company chose not to defend its 19.1% cumulative share, comprising 214 megawatts.

Falling auction settlement prices drove that retreat. Winning bids dropped from more than 30 won per kilowatt-hour in round one to less than 20 won in round two, according to auction records.

Strict domestic content requirements also raised cell production expenses for developers that previously sourced packs from China, narrowing gross margins on municipal infrastructure projects.

That withdrawal left SK On and Samsung SDI as the sole primary cell suppliers competing for the 1,180-megawatt procurement program.

The third tender reserves 1,100 megawatts for mainland South Korea and 80 megawatts for the southern island of Jeju.

The Ministry of Climate, Energy and Environment introduced a 25-year contract term for the 80 megawatts allocated to Jeju, replacing standard 15-year power purchase agreements.

Winning operators on Jeju must cycle battery equipment twice every 24 hours. That cycling frequency accelerates thermal wear and cell cathode degradation over multi-decade deployments.

SK On adapted its pouch-cell architecture to withstand repeated daily deep discharges, marketing the platform under the Gridon brand it introduced in June 2026.

The Seoul-based supplier previously lacked formal extended warranty schedules, which hampered marketing efforts against Chinese vendors Contemporary Amperex Technology (CATL) and BYD.

Chinese manufacturers dominate baseline LFP pricing worldwide, shipping stationary battery packs at costs South Korean manufacturing facilities struggle to match directly without policy incentives.

By offering 20-year operational coverage, SK On aims to shift utility procurement decisions from initial hardware cost to lifetime reliability and fire insurance premiums.

The manufacturer tests pack assemblies against thermal runaway — an uncontained chain reaction where overheating spreads between adjacent cells — to lower insurance costs for developers.

SK On is deploying the same durability standard across North America, where data center growth and renewable energy integration are fueling large-scale utility procurement.

The company signed a five-year contract on Aug. 31, 2026, to supply 9 gigawatt-hours of LFP battery cells to Colorado-based developer NeoVolta Power from 2027 through 2031, SK On announced.

That deal carries an estimated value of 1.5 trillion won ($1.1 billion), with cells manufactured at SK On's facility in Commerce, Georgia.

The agreement includes a reciprocal framework where NeoVolta Power assembles packs for SK On, expanding total planned cooperation between the two companies to 18 gigawatt-hours.

That arrangement followed a September 2025 contract with Flatiron Energy Development to supply up to 7.2 gigawatt-hours of direct-current block storage for US grid projects, the company said.

SK On operates roughly 100 gigawatt-hours of battery manufacturing capacity across Georgia and Tennessee, including joint ventures with Hyundai Motor Group.

The transition toward stationary grid storage helps SK On lift factory utilization as North American electric vehicle sales expand more slowly than planned.

SK On has not published technical specification sheets establishing the minimum capacity retention threshold required at the end of the 20-year warranty term.

The Korea Power Exchange closes the submission window for project documentation on Nov. 11, 2026, before naming preferred bidders later in November.