Winning ESS Volume Isn’t the End — Will It Extend Into an LFP Battery Ecosystem?

What is in focus: the chemistry mix of awarded volume has flipped

The chemistry mix of awarded volume in Korea’s second ESS (energy storage system) central-contract market has flipped. Unlike the first market, which was centered on nickel-cobalt-aluminum (NCA) batteries, LFP (lithium iron phosphate) batteries took 64.3% of the awarded volume in the second market, while NCA accounted for only 35.7%. This article examines what this result means for cell chemistry and the patent landscape, and what more is needed for the volume won to extend into a domestic LFP materials ecosystem.

Start with the industry context. The second-round results announced on February 12, 2026 covered a total of 565 MW (525 MW on the mainland, 40 MW on Jeju) across 7 project sites (6 in South Jeolla, 1 on Jeju), with total project costs reported to exceed KRW 1 trillion. By company, SK On won 284 MW (50.3%), Samsung SDI 202 MW (35.7%) and LG Energy Solution 79 MW (14.0%). In the first round, Samsung SDI took about 76% and LG Energy Solution about 24%, while SK On won nothing.

The source of tension is the evaluation method. According to reports, the price-to-non-price weighting of the second round shifted from 60:40 to 50:50, and within the non-price items, industrial and economic contribution and fire and facility safety were cited as key variables. In other words, this result is closer to saying that the chemistry that proved domestic production and safety won, rather than that the ‘cheap chemistry’ won. This article answers two questions. What are the cell-chemistry reasons LFP has an edge in grid-scale ESS, and what remains on the materials and patent side after the volume has been won?

Basic principle: a slow but sturdy iron-phosphate framework

Why LFP has an edge in grid-scale ESS is fairly clear from a cell-chemistry standpoint. It is lower cost, has a longer cycle life, and the thermal stability specific to its iron-phosphate bonding structure works in its favor for large-capacity stationary (fixed in one place) systems. Since it lags on energy density, it fits well with ESS applications, where volume and weight constraints are comparatively loose.

By analogy, an LFP cathode is like a reinforced-concrete warehouse. The olivine framework, in which phosphorus (P) and oxygen are tightly bound, holds its shape well even as lithium ions move in and out, so it lasts long and resists fire, but the warehouse doors are narrow, so goods (electrons) move in and out slowly. NCA, by contrast, is like a high-rise with a layered structure that can hold more in the same footprint, but the higher the nickel content, the greater the burden of managing its structure and reactions with the electrolyte.

This ‘narrow door’ is the starting point of LFP materials technology. A review paper on carbon-LFP cathodes published in 2022 puts the electronic conductivity of bare LFP at the level of 10⁻⁶ to 10⁻¹⁰ S/cm and explains that coating particle surfaces with a carbon layer 1-10 nm thick is the key means of offsetting this limitation. The follow-through tasks the original article pointed to connect to this point as well.

• Carbon coating and conductive-additive formulation: the step that offsets low electronic conductivity to bring performance close to theoretical capacity
• Electrolyte design for low temperatures: the step that offsets performance that drops at low temperatures
• Domestic materials sourcing: the step that sources cathode material, electrolyte and separators domestically and links them to ‘industrial contribution’ in the non-price evaluation

Comparison: LFP and NCA, and the auction results

The table below summarizes cathode-material properties confirmed from public academic sources. The NCA values are experimental values under specific test conditions and are difficult to generalize to commercial cells.

Item	LFP (LiFePO₄)	NCA (LiNi₀.₈Co₀.₁₅Al₀.₀₅O₂)
Crystal structure	Olivine	Layered
Operating voltage (V vs Li/Li⁺)	3.2-3.4	Test voltage window 2.8-4.3
Specific capacity (mAh/g)	Theoretical approx. 170	Pristine NCA 153 (experimental, 0.25C, after 60 cycles)
Electronic conductivity (S/cm)	10⁻⁶ to 10⁻¹⁰ (bare LFP)	Poor conductivity cited as a cause of performance loss
Thermal stability	Withstands up to approx. 270°C	Side reactions of highly oxidized Ni⁴⁺ with electrolyte need managing
Cycle life	Commercial cells approx. 10,000 cycles at 0.5C (figure cited in review)	Structural degradation from Ni ion mixing is a challenge

What this table says: At about 170 mAh/g and 3.2-3.4 V, LFP is at a disadvantage in energy terms, but its thermal stability up to about 270°C and long life are strengths. Its weakness, electronic conductivity at the level of 10⁻⁶ to 10⁻¹⁰ S/cm, is offset by carbon coating.

Company	Round 2 awarded volume (MW)	Round 2 share (%)	Round 1 share (%)
SK On	284	50.3	0
Samsung SDI	202	35.7	approx. 76
LG Energy Solution	79	14.0	approx. 24
Total	565	100	–

What this table says: The second-round chemistry split of 64.3% LFP and 35.7% NCA numerically corresponds to the shares of SK On and LG Energy Solution combined (50.3% + 14.0%) and of Samsung SDI (35.7%), respectively. The reversal in chemistry overlaps with a reversal among suppliers.

Plans for turning the volume into production have also been disclosed. SK On was reported to be converting two lines at its Seosan plant to LFP for ESS, preparing about 3 GWh a year, and plans to source cathode material, electrolyte and separators from domestic suppliers were also reported. As of a report on August 5, 2026, Samsung SDI is building an ESS line in Ulsan, and LG Energy Solution plans LFP production of about 1 GWh a year at Ochang from 2027.

Patent perspective: the foundational patents have ended, and the fight has moved to improvements

Status of the foundational patent: US5910382A (title “Cathode materials for secondary (rechargeable) lithium batteries”, applicant University of Texas System, inventors John B. Goodenough et al.), regarded as the origin of the LFP olivine cathode, has a priority date of April 23, 1996 and a grant date of June 8, 1999, and according to Google Patents it expired on April 21, 2017 (Expired – Lifetime). Claim 1 claims a cathode material consisting of a LiMPO₄ compound containing a first-row transition-metal cation.

Carbon-coating patent: US6855273B2 (“Electrode materials with high surface conductivity”, original assignees Université de Montréal, CNRS and Acep Inc, inventors Michel Armand et al.), a representative carbon-coating patent that offsets LFP’s weakness, has a priority date of April 30, 1999 and a grant date of February 15, 2005, and according to Google Patents it expired on May 4, 2020. Claim 1 claims an electrode material in which a conductive carbon material is uniformly deposited on the surface of complex-oxide particles, and it states a carbon content of 0.1-55 wt%.

Insight: the expiry of the foundational patents changes the ‘localization conditions’. The fact that both foundational rights, the composition (LiMPO₄) and surface carbon coating, have expired means that when domestic materials makers enter LFP cathode materials, the scope of the foundational patents themselves is unlikely to be a barrier. Instead, the weight of FTO (freedom-to-operate) review shifts to later improvement patents covering particle-size distribution, dopant elements, coating process conditions and precursor synthesis. If the ESS auction structure rewards domestic production with non-price points, the materials maker that first clears the infringement risk of improvement patents is likely to be the fastest to meet the ‘domestic sourcing’ requirement.

Design-around points: Because anyone may practice the claimed content of expired foundational patents, a design that stays within the composition and coating ranges described in the expired documents carries no infringement risk as far as the foundational patents are concerned. These expired documents can also serve as prior art for challenging the novelty and inventive step of later improvement patents.

Design-around scenario (counterargument): However, a design that stays within the range of the expired documents may be less competitive in performance. The moment a specific particle design or doping is adopted to achieve commercial-level conductivity, tap density or low-temperature performance, there is a possibility of falling within the scope of a living improvement patent that claims those conditions. In the end, ‘foundational expiry = free practice’ guarantees only baseline performance, and in the range where mass-production competitiveness is decided, individual improvement patents must be compared one to one. The specific filing status of improvement patents related to domestic LFP cathode materials could not be confirmed this time and is left in the verification items below.

Limits and outlook

The optimistic outlook is that ESS auctions create domestic LFP cell lines, and those cell lines create demand for domestic cathode material and electrolyte, forming a virtuous cycle in the ecosystem. As of a report on August 5, 2026, the third-round announcement was expected between mid-August and September, and the 50:50 price/non-price evaluation structure was reported to continue.

There is also a contrary scenario. If domestic LFP lines stay at cell assembly and key materials such as cathode material are imported, the industrial-contribution element of the non-price evaluation may not spread to materials makers as much as expected. And because LFP’s cost competitiveness comes from large-scale production, domestic lines of about 1-3 GWh a year may find it hard to compete on cost with large overseas supply chains.

The strategic alternative is for cell makers and materials makers to jointly present, bid by bid, a package combining the ‘share of domestic materials used’ and ‘safety data.’ In that case, materials makers should treat clearing FTO on improvement patents as a precondition, and cell makers can share the risk by reflecting materials makers’ rights status in supply-contract terms.

Practical action: Staff planning LFP cathode materials or ESS cells should, on the premise that US5910382A and US6855273B2 have expired, list the particle-design, doping and coating conditions their own process adopts, and then narrow the scope of FTO review by separately extracting only the living improvement patents that claim those conditions.

Items requiring verification

• The cell chemistry (whether LFP) of LG Energy Solution’s second-round award (79 MW), and the official source for the 64.3% LFP / 35.7% NCA tally
• The start of operations of SK On’s Seosan LFP lines (reports differ between conversion completed in Q4 2026 and production in early 2027)
• Key applicants and rights status of domestic improvement patents on LFP cathode materials (particle design, doping, coating process)
• Whether low-temperature performance requirements for ESS LFP cells are included in the auction evaluation items

Sources

1. Dealsite, SK On ranks first with 50.3% in second ESS central-contract market (2026-02-12)
2. Asia Economy, ESS landscape shifts: SK On becomes top winner in second central-contract market (2026-02-12)
3. Aju Business Daily, Korea’s three battery makers compete in domestic LFP production, targeting AIDC and third ESS market (2026-08-05)
4. THE ELEC, report on the ESS central-contract market auctions (first-round chemistry)
5. Ramasubramanian et al., Recent Development in Carbon-LiFePO4 Cathodes for Lithium-Ion Batteries: A Mini Review, Batteries 8(10):133 (2022)
6. Zhang et al., Mechanical Composite of LiNi0.8Co0.15Al0.05O2/Carbon Nanotubes, Nanoscale Research Letters (2017)
7. Google Patents, US5910382A – Cathode materials for secondary (rechargeable) lithium batteries
8. Google Patents, US6855273B2 – Electrode materials with high surface conductivity

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