Opening SOFC Manufacturing Plant in Gumi, Gyeongbuk
Joint Venture BloomSK Fuel Cell Factory with US Bloom Energy
Starting at 50MW Annually, Increasing to 400MW by 2027
SK Engineering & Construction held an opening ceremony on the 20th to commemorate the completion of the BloomSK Fuel Cell manufacturing plant located in Gumi, Gyeongbuk. From the fifth person on the left, Ahn Jae-hyun, President of SK Engineering & Construction; Kang Kyung-sung, Director of Industrial Policy at the Ministry of Trade, Industry and Energy; Koo Ja-geun, Member of the National Assembly from the People Power Party (Gumi City Gap); and Jang Se-yong, Mayor of Gumi, participated in a touch button ceremony to celebrate the opening of the manufacturing plant. (Photo by SK Engineering & Construction)
[Asia Economy Reporter Lee Chun-hee] SK Engineering & Construction has officially embarked on the localization of fuel cells by starting operations of production facilities for world-class high-performance eco-friendly fuel cells.
On the 20th, SK Engineering & Construction held an opening ceremony to commemorate the completion of the BloomSK Fuel Cell manufacturing plant located in Gumi, Gyeongbuk Province. BloomSK Fuel Cell is a joint venture established in January by SK Engineering & Construction and the global fuel cell manufacturer Bloom Energy from the United States to localize Solid Oxide Fuel Cells (SOFC).
SOFC is a world-class high-efficiency renewable distributed power generation system that produces electricity by extracting hydrogen from liquefied natural gas (LNG) and reacting it with oxygen. It is evaluated to have significantly higher power generation efficiency than existing fuel cells. As an eco-friendly energy source with no white smoke or fine dust emissions, it requires a small installation area and is safe. In the U.S., it is installed and operated in various urban sites such as large marts like Walmart, the Morgan Stanley building in New York, and the SoftBank building in Japan, as well as residential areas.
Under the vision of leading the global eco-friendly distributed power market, SK Engineering & Construction has long pursued the localization of SOFC. After signing an exclusive domestic supply contract for SOFC with Bloom Energy in 2018, marking its first step into the fuel cell business, the company has continued strategic cooperation with Bloom Energy to explore new business opportunities.
Last September, the two companies agreed on the localization of SOFC and signed a Joint Venture Agreement (JVA). In July, they completed the establishment of production facilities at the Gumi manufacturing plant and began pilot production of SOFC. The production scale is planned to start at 50 MW annually next year and gradually increase to 400 MW by 2027. The fuel cell power plants, expected to begin construction as early as January next year, will be supplied with these cells.
The domestic production of SOFC by BloomSK Fuel Cell is highly significant as it represents the localization of world-class specification fuel cells. SK Engineering & Construction has succeeded in localizing top-tier fuel cell technology, which is difficult to develop in a short period, through the establishment of the joint venture with Bloom Energy. Through this, it plans to collaborate with over 130 domestic parts manufacturers to achieve excellent quality and price competitiveness, serving as an Asian forward base for exporting domestically produced fuel cells equipped with the highest technology. Moreover, it aims to act as a foothold to support overseas exports by domestic small and medium-sized enterprises (SMEs).
This process is also expected to create a trickle-down effect for SMEs. With sequential workforce increases, it is anticipated that about 400 jobs will be created, contributing to the revitalization of the Gumi regional economy.
The opening ceremony held to celebrate the success of SOFC localization was attended by about 30 officials, including Ahn Jae-hyun, President of SK Engineering & Construction; Kang Kyung-sung, Director of Industrial Policy at the Ministry of Trade, Industry and Energy; Koo Ja-geun, Member of the National Assembly from the People Power Party (Gumi City Gap); and Jang Se-yong, Mayor of Gumi. K.R. Sridhar, President of Bloom Energy, and Randy Ahuja, President of BloomSK Fuel Cell, also participated via online video system. Following the ceremony, there were tours of the fuel cell exhibition hall and production line.
Following the SOFC manufacturing plant opening, various additional business plans were also announced
At the opening ceremony, SK Engineering & Construction also announced two major achievements related to the SOFC business promotion.
First, SK Engineering & Construction announced that it had won the EPC (Engineering, Procurement, and Construction) contract for SOFC from Equinix, the leading data center operator in the U.S. market. This project involves constructing a 6.4 MW SOFC at an Equinix-owned data center located in San Jose, California. Construction is scheduled to begin in April next year, with commercial operation expected after eight months of construction.
Notably, SK Engineering & Construction plans to apply its self-developed SOFC multi-layer design technology called Power Tower to this project. This technology enables SOFC installation in limited spaces by stacking the fuel cells in multiple layers.
By winning this project, SK Engineering & Construction is recognized globally for its excellent design and construction capabilities and extensive experience in the SOFC field, securing a favorable position to acquire more business opportunities in the U.S. SK Engineering & Construction also plans to directly participate as a power generation operator in this project, expanding its business area into eco-friendly distributed power generation.
As part of the opening ceremony, SK Engineering & Construction signed a Memorandum of Understanding (MOU) with SK Advanced and Bloom Energy for a pilot fuel cell project utilizing by-product hydrogen as fuel. This project will use by-product hydrogen from the propylene production process at SK Advanced's Ulsan PDH plant as fuel for SOFC to verify commercialization. Successful commercialization will enable operational cost reduction.
To this end, the three companies plan to construct the SOFC to be used in the pilot project within SK Advanced's Ulsan PDH plant by April next year and operate it for about one year to demonstrate commercialization. SK Engineering & Construction will perform SOFC EPC, SK Advanced will provide the site and supply by-product hydrogen, and Bloom Energy will operate the SOFC.
Ahn Jae-hyun, President of SK Engineering & Construction, said, "Based on the excellent quality and price competitiveness of domestic parts manufacturers and SK Engineering & Construction's outstanding construction capabilities, we plan to enhance export competitiveness and lead the global eco-friendly distributed power market. Through the localization of fuel cells, we will also respond to the government's Green New Deal and energy new industry promotion policies."
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