Energy storage system(ESS) is accomplished by devices that store electricity to perform useful processes at a peak time. These devices help to maintain electricity network stability and raise efficiency of energy supply. In addition, ESS loose the fundamental electricity problem which storage is impossible and improve the inefficiency of energy consumption and production. Therefore, it is said that ESS is the most important electricity infrastructure in the smart grid era.
 Despite the importance of ESS, researches which analyze Korea’s ESS industry and the development suggestions are not sufficient. Korea’s ESS industry is in its embryonic stage. Therefore, it is necessary to investigate the current issue and problems of Korea’s ESS industry and suggest the development plans. In addition, it is also important to estimate the ESS business profitability and suggest the systematic design for increasing this industry profit.
 This study analyzes the value chain and current issues of ESS industry and evaluate current competitiveness of Korea’s ESS industry by different battery technologies (Lithium-ion Batteries, Redox Flow Batteries, Sodium-Sulfuide Batteries, capacitor and Flywheel). The costbenefit analysis for ESS industry is also studied. It is concluded that the Korea ESS industry cost is over the benefit. It means that the ESS industry profitability is very low and the government support policy is necessary to increase private sector investment for ESS. Based on the results of the analysis, policy suggestions for upgrading the Korea ESS industry draw as a conclusion.
  According to B3(2014), the market share of Korea’s Lithiumion Batteries at third quarter in 2014 is 43.6%(Samsung SDI 23.6%, LG chemical 20.0%). It is known that Korea’s Lithium-ion Batteries technology is the word best. In case of Lithium-ion Batteries and Capacitor, the mass production is implemented in Korea. Other technologies are in the technology development stage.
  Finally, in this study, we suggest some strategies in order to develop the Korea ESS industry. ① The introduction of ESS installation obligation regime is necessary in energy consuming glutton buildings. In Korea, public building, institute, school, commercial buildings are the most energy consuming part. If ESS installation obligation regime is activated at these buildings, 232MW’s ESS new demand is created. ② It needs to proceed ESS lease project connecting with small scale new renewable energy. If the ESS lease business is introduced, the consumer’s installation cost burden is lowered and the management and maintenance risks are also reduced. ③ It is useful to develop the ODA energy supply support project with ESS installation. Based on this project, Korea domestic companies get Track-record and extend its business abroad. ④ It is necessary to establish ‘International ESS research institutions’. The main function of this institution is to build infra for ESS test and certification and support domestic ESS companies to extend its business abroad. ⑤ To expand ESS domestic demand market, ESS installation subsidy and tax credit policy are essential. ⑥ It is important to redesign the domestic Adjust Frequency Service(AS). The current subsidy price for AS is just 2,998won/MWh and this price can not cover the benefit of AS. AS subsidy price should be increased. ⑦ The domestic electricity price system should be redesigned. The current electricity price system can not encourage ESS installation due to the low price and small price difference between peak and off-peak time. ⑧ There is a need to design different support policy among different battery technologies. In case of Redox Flow battery, it is necessary to support technology development and Lithiumion Batteries Companies need to support to pioneer overseas market. ⑨ Lastly, the manpower training program for ESS should be expanded.