LG Group is joining hands to transform Jejudo Island into an emissions-free, environmentally-friendly island by 2030.

In partnership with the local government of the nation’s southernmost resort island and the state-run energy producer Korea Electric Corp., the Korean conglomerate recently unveiled the unprecedented, ambitious plan.

Under the plan, all the energy use on the island will come from renewable energy sources such as solar power and wind, while all the cars on the road are also expected to be replaced with full-electric vehicles. 

The Jejudo project is part of LG’s renewed commitment to zero-emissions energy solutions, one of its next growth engine businesses.

The group is the nation’s sole provider of total energy solutions thanks to technological prowess and business synergies among its key affiliates.

For instance, LG Electronics makes solar-power modules to generate electricity. LG Chem stores it using its energy storage system. LG CNS monitors for more efficient energy management.

In a bid to strengthen its market leadership, LG plans to invest 6.3 trillion won ($5.5 billion) into R&D activities alone this year.

A new 4 trillion won-R&D cluster, called “LG Science Park,” is also expected to be completed by 2020. Located on a 170,000 square-meter site within the Magok Industrial Complex in western Seoul, the facility will become the largest R&D center in Korea.

Some 25,000 researchers form LG companies will be gathering at the facility to secure the group’s future fundamental technologies and seek ways for synergies with existing businesses.

Total energy solutions provider

LG Electronics, the group’s flagship electronics unit, aims to secure an upper hand in the global solar power market, rolling out the world’s best, high-efficiency solar power modules.

Early this year, the company invested 160 billion won into the production line at its Gumi plant in North Gyeongsang Province to expand premium product lineup.

In August, the company released its new module product, dubbed “NeON2,” which boasts the highest efficiency level at 19.5 percent within the industry. The product also won an Intersolar prize in June in Germany.
 

The company is also expanding investment into energy storage system, pouring 120 billion won into the business by 2020.

The company established a separate ESS business division in August last year, pledging to expand its presence in the growing market. In July this year, the company completed a 1.44-megawatt ESS testing facility -- the largest of its kind here -- in Incheon with an investment of 10.6 billion won.

The company says it would diversify its business portfolio spanning from ESS products for buildings and electricity generation to microgrids powered by renewable energy such as solar power and wind.

LG Chem, the battery-making unit, is the No.1 player in ESS. Of the total 944 ESS patents filed between 2001 and 2010 in Korea, the company has secured 41 percent of lithium-ion battery patents and 34 percent of battery management system patents.

The company is especially pinning high hopes on the soaring U.S. energy market.

In May, the company inked a deal with North America’s largest power company Duke Energy to build an energy storage system at a retired coal power plant in Ohio.

The company provides both batteries and battery management systems, proving its competitiveness in the field.

The company also plans to supply batteries to a 45-kilowatt ESS of Gexpro, a leading distributor of electrical supplies, which would be installed at schools, hospitals and office buildings in the U.S.

LG Chem entered the North American market back in 2010 when it started supplying batteries to Southern California Edison, one of the leading electricity suppliers in the U.S.

In 2013, the company supplied batteries for SCE’s wind energy storage project in Tehachapi, California. It also inked a supply deal with AES, the largest power producer in the market, last year.

LG CNS, the system service affiliate, aims to strengthen its leadership in smart microgrid solutions.

The company’s solutions allow real-time monitoring of energy use within a specific area and analyzing the big data and helping more efficient management.

In September last year, the company won a $45 million deal with Poland’s largest power company Tauron Dystrybucja to supply 330,000 units of advanced metering infrastructures or AMI through April 2017.

The company said the deal would give it an upper hand to penetrate deeper into the 1 trillion won Polish AMI market.

Major force in automotive parts

Another new growth engine business for LG is automotive parts, especially for emissions-free full-electric vehicles.

LG companies boast the world’s best technologies in each area, working closely for business synergies.

In July 2013, LG Electronics established a new vehicle components business division that has played a key role in R&D activities for automotive parts overall.

The division is expanding business portfolio spanning from infortainment, driver assistance and air-conditioning systems to battery packs for electric vehicles.

The company is also expanding ties with global carmakers.

The company inked a deal with General Motors to supply 4G LTE communications modules for the carmaker’s OnStar telematics service. The company also teamed up with Mercedes-Benz to develop stereo camera system -- a key technology for futuristic driverless cars.

The company is also working closely with tech firms such as Google. Early this year, the company was named a battery partner for Google’s driverless car project.

LG Display has also supplied automotive display products to carmakers around the world.

The company is currently the third-largest display maker in automotive displays with 16 percent market shares. It aims to elevate the figure to 23 percent to become the No. 1 player.

LG Innotek, the component unit, entered the automotive parts market with its own anti-lock brake system (ABS) and electric power steering system (EPS) in 2007. Currently, it produces some 20 car parts, including motors, sensors, camera modules, LED and battery management system.

LG Chem is a leading player in EV batteries.

The company established the world’s largest battery plant in Ochang, North Chungcheong Province, in May 2011. With its new U.S. plant starting operation last year, the company now produces batteries for an annual 200,000 electric vehicles.

In a bid to beef up its Chinese business, a new plant with an annual 100,000 unit capacity is due for completion there by the end of this year.

Even though the EV market is still in its infancy, the company predicted market demand to surge in the coming years as governments around the world are toughening emissions restrictions.

LG Chem has already secured supply deals with the world’s top 20 carmakers. The company is also ramping up efforts to develop next-generation batteries that allow EVs to drive more than 320 kilometers on a single charge.

By Lee Ji-yoon (jylee@heraldcorp.com)