The LG Group will develop fuel cells as a next-generation growth engine. Three affiliates, LG Corporation, LG Electronics, and LG Chem, jointly bought a 51 percent stake in Rolls-Royce Fuel Cell Systems for US$45 million, the group said Thursday.
Rolls-Royce Fuel Cell Systems was established in Canton, Ohio in 2005. It will be renamed LG Fuel Cell Systems as a result of the takeover.
A fuel cell is a device that converts hydrogen from a fuel such as gas into electricity. It is considered an eco-friendly energy source, given that it emits little toxic substances like carbon dioxide and makes little noise. In Korea, POSCO Power and Samsung SDI already make fuel cells.
LG aims to achieve commercial viability of fuel cells for megawatt-scale power generation by 2015 or 2016. One megawatt generator can power 500 to 1,000 homes.
An industry insider said, "Fuel cells for power generation are a sector that has been attracting growing interest since the Fukushima nuclear disaster last year. The global market is expected to grow 35 percent annually once it reaches W2 trillion (US$1=W1,153) in 2015."
Rolls-Royce, as the second largest shareholder with 49 percent, will cooperate with LG. After buying Rolls-Royce in the 1970s, the British government sold its automotive division to the private sector. Since then, Rolls-Royce has focused on engine and energy projects.
"Rolls-Royce has the world's top-notch original technology for large fuel cells," an LG executive said. "LG Chem and LG Electronics will produce synergy based on the design expertise they've accumulated in solar cell and energy storage systems."