The demand for Energy Storage Systems, once shunned as being too premature for the market, is expected to see a rapid expension soon through the Park Geun-hye government’s initiative for creating and launching new power management systems.

On Sunday, the government announced its plans to create a new market for energy demand management by applying the technologies from the nation’s information, communications and technology companies, otherwise known as ICTs.

The move was in line with Seoul’s bigger blueprint for a more effective power-conserving campaign that would also be in line with Park’s drive to promote the ICT sector.

The announcement spurred a surge in Energy Storage System shares, and experts expect the upward trend to continue for some time.

“The government’s energy policy used to focus on the supply side by creating more plants in the past. However, as power shortage becomes a short-term issue, the policy focus is shifting to demand management,” said Han Byung-wha, a researcher at Hyundai Securities.

By promoting smart grid systems through ESS and EMS, the government is aiming to encourage companies to save wasted energy and use it when necessary, and this initiative is expected to be long-term.

Shares of Samsung SDI, an ESS supplier, on Monday soared 3.94 percent to 171,500 won from the previous day, and Iljin Materials jumped 2.89 percent to 16,000 won. SDI shares closed at 171,000 won, up 3.64 percent from Friday.

Other ESS-related shares also reacted. In midday trading, POSCO ICT shares rose to 10,000 won, up 6.84 percent from the previous day to close at 10,050 won. POSCO ICT is behind Smart Renewable, a smart-grid demonstration project on Jeju Island in 2010.

Shares of Sang-A Frontec, a supplier of ESS and electric car parts to Samsung SDI, rose 2.29 percent to 7,600 won.

ESS is a device that stores electricity when the demand is low and provides stored electricity when the demand is high. This improves energy efficiency and stabilizes operations of the electricity grid.

Further, the government plans on creating a market where companies can resell the electricity they saved, taking a page from how carbon credits are sold globally to help reduce carbon emission.

Seoul also will encourage 30 large-scale companies with a contract demand of over 300,000 kilowatts to install ESS, the 5 percent level of their contract demand. If voluntary installation does not work, it may gradually become obligatory, as the government pushes through with its plans.

By Shin Ji-hye (shinjh@heraldcorp.com)