Korea’s OCI, US partner CPS Energy sign 20-year energy storage deal

The project is ‘highly profitable,’ as over 40% of OCI’s investment is eligible for US tax credit

OCI Chairman Lee Woo-hyun (front, third from left) and CPS Energy CEO Rudy Garza (fourth from left) pose for a photo after signing a 20-year BESS deal

Sang-Hoon Sung 1

2024-12-10 16:36:21 uphoon@hankyung.com

Energy

South Korean solar cell company OCI Holdings Co. said on Tuesday it has signed a deal with US power supplier CPS Energy to jointly build a 120-megawatt solar cell plant and related battery energy storage system (BESS) with 480 MWh storage capacity in Texas.

OCI said it will take charge of the project’s development and financing. The Korean company’s US affiliate OCI Energy will be the battery facility’s owner and operator.

CPS, meanwhile, will have operational control of the system to serve electrical demand in the San Antonio region.

The scheme will be executed under a long-term storage capacity agreement between the two companies. The project vehicle will be called Alamo City ESS LLC.

OCI solar power generators in Namhae, Korea

To be located in southeastern Bexar County, the BESS will be able to serve the energy needs of the San Antonio community for 20 years. Its commissioning is scheduled for late 2026.

Once online, CPS Energy will have enough battery storage to power more than 104,000 homes. The system will be able to discharge power for up to four hours at full demand.

‘HIGHLY PROFITABLE’ PROJECT

OCI officials said the project is “highly profitable,” as over 40% of its investment in the project is eligible for the US government's Investment Tax Credit.

OCI has a longstanding relationship with CPS Energy. The Korean company operates a solar farm on 70 acres near Texas' Loop 1604 that’s already powering homes in the Lone Star State.

OCI logo

OCI said it is donating $250,000 to the University of Texas at San Antonio as part of the deal for the new site.

Based in Texas, OCI Energy has steadily invested in the US solar cell segment to bolster its presence in the North American BESS market.

Since 2011, OCI Energy has been operating 5.2 GW solar and ESS projects in the US.

“Through this agreement with CPS Energy, we have confirmed the local market's trust in OCI Energy's capabilities in the solar power business. We will strategically expand related projects to create a new revenue stream,” said Lee Woo-hyun, OCI Holdings chairman and chief executive.

Write to Sang-Hoon Sung at uphoon@hankyung.com

In-Soo Nam edited this article.