After a five-month investigation into fires at 23 energy storage installations in South Korea, an expert panel has blamed poor-quality installations, faulty operating procedures, missing protections against electrical shocks and lack of overall control systems, several South Korean media outlets reported after the June 11 release of the committee's findings.

The probe also revealed manufacturing defects in lithium-ion battery cells from one undisclosed manufacturer, but did not find that those flaws ignited the fires.

"Battery manufacturers, system integrator companies and power conversion system companies are all at fault," Kim Jung-hoon, an electrical engineering professor at Hongik University who headed the committee, said at a press conference, according to a June 12 article in the Korea Joongang Daily newspaper. The panel, however, refrained from assigning liability for the series of fires that began in August 2017. "The investigation committee is focused on finding the cause of the accidents, not finding who is responsible," Jung-hoon said.

The government, which suspended operations at 522 of the country's 1,490 energy storage facilities as part of its audit, plans to give the facility owners discounts on power to make up for losses, according to a June 11 article in the Korean Herald newspaper.

The conclusion of the investigation, which was launched by the South Korean Ministry of Trade, Industry and Energy in January, opens the door for suppliers to restart what had emerged as the world's largest battery storage market before stalling in 2019 amid the probe and audit of installed systems. It also gives the global energy storage industry an opportunity to learn from South Korea's experience dealing with a major safety issue that, if uncontained, could derail anticipated strong growth in worldwide demand for lithium-ion battery storage systems.

Market recovery expected 'as uncertainty clears'

In the wake of the committee's findings, South Korea-based global suppliers of lithium-ion batteries LG Chem Ltd. and Samsung SDI Co. Ltd. expect market activity to resume in the second half of 2019 after suspending shipments in the first quarter of 2019, which led to significant downturns in their energy storage businesses.

"As the battery is not found to be the cause of the fire[s], the Korean [energy storage] market is expected to recover again ... as uncertainty clears," a spokesperson for LG Chem said in a June 14 email. New government safety standards for energy storage installations to be released in September will have an additional "positive effect," the spokesperson said.

LG Chem lost roughly $124 million in its energy storage business in the first quarter of 2019, following seven straight quarters of profits.

The company, which also manufactures lithium-ion batteries in the United States at a factory in Holland, Mich., says it will work with companies throughout its global supply chain to ensure systems relying on its batteries are of the highest quality, according to the spokesperson. LG Chem recently signed a corporate responsibility pledge produced by the U.S. energy storage industry to create best practices to deal with operational hazards, battery recycling and supply chain risks.

Fire safety officials in the United States, where LG Chem is a major battery supplier, are updating codes for energy storage installations. A recent fire at a utility-scale battery storage project in Arizona remains under investigation.