The Giant Gear of the 'Hydrogen Industry' Is Turning

[Asia Economy Reporter Park So-yeon] Large corporations are driving the creation of a hydrogen industry ecosystem that is rapidly growing as an eco-friendly energy source.

According to industry sources on the 6th, SK Group's holding company SK Inc. recently announced its plan to enter the hydrogen business. Based on this, the company plans to strengthen the domestic hydrogen market ecosystem and accelerate environmental, social, and governance (ESG) management emphasized by Chairman Chey Tae-won.

On the 1st, SK Inc. established a dedicated hydrogen business organization called the 'Hydrogen Business Promotion Team,' consisting of about 20 specialized personnel from related companies such as SK Innovation and SK E&S, which are energy-related companies.

SK Inc. plans to first actively utilize the infrastructure owned by the group to supply competitive hydrogen. Starting in 2023, SK E&S, a subsidiary, will build liquefied hydrogen production facilities with an annual capacity of 30,000 tons and supply liquefied hydrogen to the metropolitan area.

To this end, SK Innovation is expected to supply by-product hydrogen. In particular, SK Incheon Petrochem, a subsidiary of SK Innovation, is located adjacent to the metropolitan area, the largest demand center, which the company explains is an optimal location to efficiently solve cost issues related to long-distance hydrogen transportation.

Through SK E&S, a large-scale production system for blue hydrogen (hydrogen with captured and stored carbon dioxide) will also be operated. SK E&S, which directly imports more than 3 million tons of liquefied natural gas (LNG) annually, will utilize the large volume of natural gas secured to additionally produce 250,000 tons of blue hydrogen starting in 2025.

In the long term, the company plans to promote green hydrogen production projects using renewable energy such as solar and wind power, aiming to complete an eco-friendly hydrogen supply system that emits no carbon dioxide.

Alongside this, SK Inc. plans to integrate the hydrogen value chain?from production to distribution and supply?into a unified operation.

Although Hyundai Motor Group is actively building a hydrogen ecosystem, the domestic and global hydrogen markets are still in the early stages.

SK Inc. explains that the domestic hydrogen market faces difficulties in expanding hydrogen vehicle adoption due to a lack of transportation and charging infrastructure, and existing hydrogen businesses are caught in a vicious cycle of not actively investing in production facilities due to insufficient demand.

SK Inc. plans to leverage its experience in leading the energy ecosystem through value chain integration in existing energy businesses such as oil and LNG to quickly establish a virtuous cycle structure in the domestic hydrogen ecosystem.

To this end, by 2025, the company aims to have a total production capacity of 280,000 tons and utilize SK Energy’s gas stations and truck rest areas as green energy service hubs to supply hydrogen for vehicles, while actively developing demand for power generation such as fuel cell power plants.

SK Inc. expects to create an additional net asset value (NAV) of about 30 trillion won at the group level by 2025 through these efforts.

Hyundai Motor Group has also recently taken steps to expand and secure a leading position in the hydrogen industry by cooperating with the UK-based global integrated chemical company INEOS Group to spread the global hydrogen ecosystem.

The goal is to build an integrated hydrogen value chain from production to utilization and expand hydrogen-related public and private sector projects to accelerate the realization of a hydrogen society.

Last month, Hyundai Motor signed a memorandum of understanding (MOU) with INEOS, headquartered in the UK. INEOS is a global integrated chemical company specializing in petrochemicals, specialty chemicals, and petroleum products. It currently produces 300,000 tons of hydrogen annually and has recently been expanding its hydrogen-related business areas.

According to the MOU, the two companies plan to showcase a new hydrogen electric vehicle by installing Hyundai Motor’s fuel cell system in the Grenadier, a sports utility vehicle (SUV) being developed by INEOS Automotive, a subsidiary of INEOS.

Hyundai Motor’s fuel cell system has already been applied to the hydrogen electric vehicle Nexo, the hydrogen electric truck Xcient, and the hydrogen electric bus Elec City.

To promote the spread of the hydrogen economy in Europe, where movements to lead the hydrogen economy are active, the two companies plan to form a consultative body composed of key stakeholders immediately after the MOU and closely cooperate with the EU, European governments, and private companies to seek immediate business opportunities.

INEOS will be responsible for hydrogen production, supply, and storage through its subsidiary Inovyn, while Hyundai Motor will handle the supply of fuel cell systems.

Based on INEOS’s chemical technology and Hyundai Motor’s fuel cell system technology, the two companies plan to build a hydrogen value chain covering production, storage, transportation, and utilization, and actively work to expand the global hydrogen ecosystem beyond Europe.

Doosan Heavy Industries & Construction is participating in a 'green hydrogen' demonstration project using wind power.

Last month, Doosan Heavy Industries & Construction signed a project agreement to promote the 'Green Hydrogen Production, Storage, and Utilization Demonstration Project' led by Jeju Energy Corporation.

The agreement involves 10 organizations, including Doosan Heavy Industries & Construction, Jeju Provincial Government, Korea Midland Power, and Korea Gas Corporation.

The organizations will develop and demonstrate technologies to produce hydrogen using electricity generated from wind power, and to store, transport, and utilize it.

Doosan Heavy Industries & Construction will be responsible for integrated design and supervision of the hydrogen plant and will also develop an energy management system (EMS).

Doosan Heavy Industries & Construction will also conduct the demonstration project at the Dongbok and Bukchon wind farms owned by Jeju Energy Corporation.

At this site, a system will be established to produce about 600 kg of hydrogen daily using 3 MW (megawatts) of electricity generated by wind power.

The project period is until December 2022, and the hydrogen produced here will be used as fuel for hydrogen buses to be introduced in Jeju Island.

Hydrogen is classified by production method into by-product hydrogen, extracted hydrogen, and electrolyzed hydrogen. Hydrogen produced by decomposing water using renewable energy such as wind power emits no environmental pollutants and is called green hydrogen.

Hanwha Solutions signed a business agreement with Gangwon Province and Korea Gas Technology Corporation to build an electrolyzer facility and hydrogen charging station capable of producing 290 tons of hydrogen annually on a 1,488㎡ (approximately 450 pyeong) site in Daegwallyeong-myeon, Pyeongchang-gun, Gangwon Province.

Electrolysis is an electrochemical technology that decomposes water into hydrogen and oxygen by passing electricity through it. It is regarded as a key technology connecting renewable energy, which produces surplus electricity due to inconsistent power generation, with the hydrogen ecosystem.

The green hydrogen production complex, which will be constructed with a total investment of 30 billion won and is scheduled to begin commercial operation in the second half of 2022, will operate for 15 years.

In this project, which is carried out through cooperation among the private sector, government, and public institutions, Korea Gas Technology Corporation will oversee the construction and maintenance of production facilities, Gangwon Province will provide the site and wind power electricity, and Hanwha Solutions will build the green hydrogen production facility.

The 290 tons of hydrogen produced using electricity from Gangwon Province’s wind power plants will be used for transportation such as hydrogen buses, hydrogen trucks, and hydrogen passenger cars through hydrogen charging stations. The amount of hydrogen, 290 tons, is enough to charge 130 Hyundai Motor hydrogen electric vehicles 'Nexo' daily for one year.

Through this project, Hanwha Solutions plans to secure infrastructure to test P2G (Power to Gas) electrolysis technology that converts renewable energy into hydrogen and to collect operational data to strengthen its green hydrogen production technology capabilities.