Volvo Group Korea signed a purchasing agreement with LS Electric on the 6th for the installation of solar panels and the implementation of a Factory Energy Management System (FEMS). The ceremony took place at the Volvo Construction Equipment Changwon Plant and was attended by Andrew Knight, CEO of Volvo Group Korea, Park Kang-seok, CEO of Volvo Trucks Korea, Koo Dong-hwi, CEO of LS Electric, and key stakeholders.
In response to the increasingly serious climate change, the Volvo Group has decided to gradually convert all electricity used in domestic operations to 100% renewable energy. Consequently, the Volvo Construction Equipment Changwon Plant will invest a total of 169 billion KRW over 20 years to pursue an energy purchasing agreement with LS Electric, proactively preparing for domestic and international management environments marked by rising energy costs and increasing demand for renewable energy. Meanwhile, Volvo Trucks Korea plans to invest approximately 13 billion KRW at its domestic locations in Dongtan, Gimhae, and Incheon.
Through this agreement, Volvo Group Korea aims to secure an average of approximately 55GWh of renewable energy at the Changwon plant over the next 20 years, transitioning to full renewable energy usage by 2026. This initiative is expected to reduce carbon dioxide emissions by approximately 21,000 tons annually, equivalent to planting about 1.5 million pine trees or saving around 10 million liters of oil from a thermal power plant.
Additionally, solar panels will be installed at the Changwon Plant, and the FEMS will operate on-site. The renewable energy supplied through the solar panel installation is expected to be around 7.6GWh annually, accounting for about 14% of the total supply. Moreover, Volvo Group Korea will procure renewable energy reliably through a Power Purchase Agreement (PPA) with LS Electric, utilizing its own power network.
The Volvo Construction Equipment Changwon Plant has also established a roadmap for carbon reduction focusing on three directions: ‘energy saving’, ‘energy transition’, and ‘renewable energy usage’. Currently, it is implementing electric forklifts and automated guided vehicle (AGV) systems on-site. Starting in 2026, Volvo Group Korea will phase out kerosene used for heating and will convert LNG fuel to electric energy by 2028.
Andrew Knight, CEO of Volvo Group Korea, stated, “As a global manufacturer of construction equipment, Volvo Construction Equipment Korea has been implementing energy-saving and carbon-neutral initiatives. Since 2014, we have saved a total of 10,616MWh of energy consumption and increased energy efficiency by 20%.” He added, “Furthermore, with this agreement, Volvo Group Korea aims to convert all electricity used at the Changwon Plant to renewable energy by 2026 and lead the construction equipment industry in carbon neutrality in Korea.”
Koo Dong-hwi, CEO of LS Electric, remarked, “LS Electric collaborates with domestic partners on their energy transition and optimization journey through solutions like the integrated energy management system (FEMS), which combines advanced data and technology. We will leverage our expertise across the entire smart energy value chain, including wind power and green hydrogen, to support Volvo Group Korea’s sustainable management and financial gain preservation.”
Meanwhile, Volvo Group Korea is shifting its business core to an ESG (Environmental, Social, Governance) foundation to become a global sustainable company.
To meet the growing interest and demand for sustainable, eco-friendly construction machinery solutions in Korea, Volvo Group Korea launched the country’s first 100% electric-driven excavator, with a capacity of 2.5 tons, last September. They continue to invest heavily in establishing production lines for electric excavators, battery packs, and hydrogen refueling stations, positioning themselves as a key hub for global Volvo excavator research, development, and production.
Lee Sang-jin daedusj@autodiary.kr