The Korea Power Exchange (KPX) has opened a competitive procurement process for 1.1 GW/6.6 GWh of standalone energy storage capacity on mainland South Korea under the 2026 ESS Central Contract Market. The projects must provide six hours of continuous discharge and reach completion by February 2029. A separate 80 MW procurement has also been launched for Jeju Island, bringing the combined ESS procurement to 1.18 GW.
The mainland tender is structured around projects larger than 10 MW/60 MWh and smaller than 100 MW/600 MWh. Bids are submitted in 1 MW/6 MWh increments, while eligible projects must be newly installed standalone ESS facilities. Systems that have participated in other schemes, received subsidies or combine different storage technologies within the same project are excluded. The tender also requires eligible equipment to comply with Korean battery, power conversion, grid and safety standards.
A defining feature of the procurement is its emphasis on long-duration operation. Mainland projects must provide at least 383 charge-discharge cycles annually, equivalent to a minimum of 5,745 cycles over the 15-year trading period. Systems must also maintain at least 70% guaranteed capacity after 15 years and achieve at least 65% operating efficiency over the contract period. Grid-forming inverter capabilities and remote monitoring and control through an energy management system are also required.
KPX has given equal weight to price and non-price considerations, with each accounting for 50 points. The non-price evaluation covers grid stabilization, industrial and economic contribution, fire and equipment safety, technical capability, local acceptance and project readiness, as well as business credibility and financing. Fire and equipment safety alone carries 25 points, including assessments of battery chemistry, fire prevention measures and response plans.
The procurement also places unusual emphasis on supply-chain transparency and domestic industry participation. Bidders must provide information on the origin and manufacturing location of major components, including cathode and anode materials, separators, electrolytes, PCS, EMS and BMS. Evaluators will also consider domestic maintenance and spare-parts plans, employment, local industrial contribution, manufacturing capacity and battery recycling initiatives.
Location is another important part of the tender. KPX has expanded eligible connection points beyond designated system-management substations to include substations where storage is considered necessary based on broader grid conditions. It has also identified locations where ESS could provide greater congestion relief, allowing the procurement to direct storage toward areas with specific grid needs rather than treating capacity as geographically interchangeable.
The commercial structure provides a fixed contract price for each selected project over a 15-year trading period, without adjustment for inflation. Payments are linked to the contracted capacity and actual performance, meaning non-compliance with dispatch instructions can reduce monthly settlement amounts. KPX can also adjust the contract price if certain promised conditions, including equity contribution, guaranteed life, operating efficiency or credit standing, fall below the levels used during evaluation.
Project execution is subject to several safeguards. Selected bidders must obtain a generation business permit within nine months of the award announcement. Construction delays trigger financial and contract consequences, with delays of more than two years potentially leading to termination. Developers must also pass staged implementation checks covering permits, procurement, equipment installation, commissioning and commercial operation.
The contract requires a performance guarantee equal to 10% of the bid price multiplied by the contracted annual charge-discharge volume based on 383 cycles. The guarantee must be submitted within seven business days of contract signing and remains in place until commercial operation begins. If the project fails to reach completion because of the contractor's responsibility, the guarantee can be forfeited.
The bidding schedule began with business registration on September 28 and will continue through October 2. Bid proposals can be submitted from October 6 until November 4, followed by the submission and finalization of data sheets, business plans and supporting evidence through November 11. Evaluation and selection are scheduled for November, with contracts to be signed after successful bidders obtain their generation business permits.
The procurement forms part of South Korea's broader strategy to expand long-duration storage as renewable generation increases. The country's 11th Basic Plan for Electricity Supply and Demand estimates a need for 23 GW of long-duration ESS by 2038, including 22.5 GW on the mainland and 0.5 GW in Jeju. The 2026 procurement is intended to secure part of the storage requirement needed in the 2028-2029 period, particularly in grid-congested areas.