OCI Holdings is accelerating its North American power infrastructure business by breaking ground on a large-scale energy storage system (ESS) project in Texas.

On May 20, OCI Holdings announced that its U.S. subsidiary, OCI Energy, held a groundbreaking ceremony for the "Alamo City ESS Project" in Bexar County, southeastern Texas, alongside local energy utility CPS Energy. The ceremony was attended by key stakeholders, including Kim Cheong-ho, President of OCI Enterprises (the U.S. solar holding company), Sabah Bayatli, President of OCI Energy, Rudy D. Garza, CEO of CPS Energy, and Park Jae-hong, Head of LG Energy Solution Vertech.

The project involves building a massive ESS facility with a 120MW power capacity and 480MWh storage capacity on a site spanning approximately 140,000 square meters near San Antonio, Texas. OCI Energy aims to commence commercial operations by 2027. Once completed, the facility is expected to meet the electricity demand of roughly 30,000 three-person households near San Antonio for up to four hours, contributing to a stable regional power supply during peak demand periods.

A number of global partners are taking part to support stable execution of the project, including ING Capital handling financing, LG Energy Solution Vertech supplying batteries, and Elgin Power Solutions acting as the engineering, procurement, and construction (EPC) contractor.

Following its initial announcement of the "Alamo City ESS LLC" project, OCI Energy signed a Storage Capacity Agreement (SCA) with CPS Energy to provide electricity to the San Antonio region over the next 20 years. CPS Energy is one of the largest public energy companies in the United States, supplying electricity and natural gas to approximately 1.28 million households in Texas.

Industry insiders are also highlighting the fact that this project has secured tax incentives under the U.S. Inflation Reduction Act (IRA). According to OCI Holdings, the project meets the groundbreaking requirements under the OBBB legislation, making it eligible for an investment tax credit (ITC) of up to 40%. The structure includes a 30% base ITC plus an additional 10% energy community bonus.

OCI Holdings also outlined a strategy to increase its ratio of direct asset operations, shifting away from its conventional business model focused solely on selling projects after development. The company envisions securing long-term power sales revenue through project equity investments and joint operations.

In line with this strategy, OCI Energy recently signed an equity investment agreement with Israeli energy firm Arava Power for the 500MW "La Salle" project. The two companies will each hold a 50% stake and jointly handle everything from financing to construction and operations. The project is scheduled to break ground late this year and enter commercial operation by 2028.

"We plan to move away from our existing structure of selling projects right before completion, and instead increase direct operations through joint ventures to generate long-term power sales revenue," an OCI Holdings official stated. "In particular, we intend to strategically expand our ESS business to complement the intermittent nature of solar power."

Meanwhile, OCI Energy continues to invest heavily from its base in Texas to solidify its leadership as a core player in the North American utility-scale solar and ESS markets. The company currently holds a pipeline of 31 projects totaling 7GW, which includes 3.9GW of solar power and 3.1GW of ESS assets.