SEOUL, May 22 (Yonhap) -- The government said Thursday it will invite bids to construct a homegrown energy storage system (ESS), a project estimated to cost around 1 trillion won (US$725 million), in a move aimed at enhancing the efficiency of domestic power production.

According to the Ministry of Trade, Industry and Energy, the project involves building a 500-megawatt (MW) ESS facility on the mainland and a 40-MW facility on the southern island of Jeju.

"Through this ESS project, we expect to strengthen grid stability, despite the inherent volatility of renewable energy, and reduce the frequency of curtailing renewable power output," a ministry official said.

Industry sources anticipate fierce competition among South Korea's top three battery makers -- LG Energy Solution, SK On and Samsung SDI.

Under the new initiative, selected operators will be required to complete ESS installation by 2026, the ministry said.

For 15 years following the project's commencement, they will operate the facilities based on bidding prices submitted during the tender.

In selecting a bidder, the ministry said it will evaluate not only the price competitiveness but also non-price factors, such as contributions to the domestic industry and battery recycling potential.

Final bidder selection is scheduled for July.

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