[Biz View] Should We Discard Gas Turbines That Have Outlived Their Usefulness?

One-Third of Domestic Power Generation Facilities Depend on LNG
Carbon Neutral Scenario Increases Share of Zero-Carbon Gas Turbines
Existing Gas Turbines Modified for LNG and Hydrogen Co-Firing

The 1st Combined Cycle Unit 2 Gas Turbine at Korea Western Power Pyeongtaek Power Plant. This equipment, manufactured by GE, began operation in the late 1990s and ceased operation in 2017. Recently, a project to modify it to a 50% hydrogen co-firing ratio has been started in collaboration with Hanwha.

[Asia Economy Reporter Choi Dae-yeol] Among domestic power generation fuels, liquefied natural gas (LNG) produces the most electricity. It accounts for about 31% of power generation capacity. Coal (including anthracite) accounts for 28%, and nuclear power about 17%. South Korea, along with neighboring Japan and China, is a representative country that uses a large amount of LNG. Since LNG emits relatively fewer pollutants compared to traditional coal or oil, the industry expects its usage to increase in the future. However, the drawbacks are that it is entirely dependent on imports and has large price fluctuations.

The equipment needed to generate electricity or heat using LNG as fuel is a gas turbine. The basic principle is simple: burning fuel to operate a rotating component to obtain heat and electricity. Power generation gas turbines are considered the pinnacle of mechanical engineering, as they incorporate advanced technology developed by modern engineering. The total number of parts reaches about 40,000, and a single blade, about 50 cm in size, costs as much as a mid-sized car. The market is dominated by companies from the U.S. (GE), Germany (Siemens), Japan (Mitsubishi), and Italy (Ansaldo).

Power generation gas turbine manufactured by Doosan Heavy Industries & Construction

To achieve carbon neutrality by 2050, carbon-based power generation facilities must be replaced. According to the mid-to-long-term plan finalized by the government in late October, the power generation sector must either emit no carbon at all (Plan A) or leave only a very small portion such as LNG (Plan B), with most of the power supplied by renewable energy.

Notably, the plan sets a high proportion for zero-carbon gas turbines. According to Plan A, zero-carbon gas turbines are expected to cover about 22% of South Korea's total electricity consumption, and about 14% under Plan B. This is the second highest share after renewable energy sources like solar and wind. The idea is to generate electricity by operating gas turbines with fuels that emit no carbon, such as hydrogen. There are also options to modify existing gas turbines, which currently burn LNG or diesel, to operate by mixing hydrogen or using hydrogen alone.

Typically, the lifespan of a gas turbine is considered to be about 15 to 20 years. In most cases, turbines are retired not because they are physically unusable but because their efficiency declines. South Korea's power system operates on economic dispatch, meaning cheaper electricity is used first. As more efficient, newer facilities are introduced, older ones are pushed to the back. Generally, larger turbines have better efficiency.

According to the industry, out of 158 gas turbines currently operating domestically, 75 units are over 15 years old, accounting for nearly half. In terms of classification by turbine inlet temperature, most belong to the relatively lower temperature F, D, or E classes. The gas turbine modification companies PSM and Thomassen Energy, acquired by Hanwha in the first half of this year, target this segment. They work on converting gas turbines, which have become economically inefficient and difficult to operate due to tightened environmental regulations, to run on fuel mixtures of LNG and hydrogen.

The higher the hydrogen ratio mixed with LNG, the more carbon dioxide emissions are reduced. Mixing about half hydrogen can reduce CO2 emissions by 20-30%, and mixing 80% hydrogen can reduce emissions by more than half. It is also technically possible to use hydrogen as the sole fuel. Costs are also reduced. Considering that building an LNG power plant typically costs about $1,000 per kW, a 100 MW power plant would cost around 120 billion KRW. The cost to modify turbines to enable hydrogen co-combustion is known to be less than half of that.

Linden Cogeneration Plant in New Jersey, USA. Hanwha recently won a project to enable hydrogen co-firing in the gas turbines of this power plant. After the retrofit, the hydrogen co-firing ratio will be 40%, making it the world's first power plant currently in commercial operation to be retrofitted with such a high hydrogen co-firing ratio.

The key is to develop technology to increase the hydrogen co-combustion ratio and to expand hydrogen production and supply infrastructure. The combined cycle power plant in the U.S. modified by PSM in 2019 can technically handle up to 35% hydrogen co-combustion, but due to hydrogen shortages, it operates at a 5% co-combustion ratio. Both this power plant and the world's first combined heat and power plant in the Netherlands, which was modified to allow hydrogen co-combustion, aim to operate entirely on 100% hydrogen in the mid-to-long term.