SK Launches 'Green Hydrogen' Business... Expanding Energy Portfolio

Blue Hydrogen Followed by Green Hydrogen Electrolysis Facility Project Accelerates

Annual Supply of 450 Tons of Green Hydrogen by 2025... 'Largest Operator'

Vice Chairman CEO Yoo Jeong-jun Pursues Realistic 'Net Zero Management' by Complementing Renewable Energy Weaknesses with Green Hydrogen, Blue Hydrogen, and LNG

Synergy with Group Nuclear Business... Presence in Energy Market

Vice Chairman Yoo Jung-joon, CEO of SK E&S, delivering a keynote speech on "Asia's Gas Industry Toward Net Zero Goals" at the "2022 World Gas Conference (WGC 2022)" keynote session on the 26th of last month. (Photo by SK E&S)

[Asia Economy Reporter Moon Chaeseok] SK Group's new and renewable energy affiliate, SK E&S, is accelerating its green hydrogen business following blue hydrogen. Green hydrogen, which produces no carbon dioxide emissions, aligns with the group's 'net zero management' as well as South Korea's energy transition. With SK Group independently entering the nuclear business, including small modular reactors (SMRs), the group is making a full-fledged move into the energy market.

According to SK E&S on the 1st, SK Plug Hyverse, a joint venture established with the U.S. hydrogen company Plug Power, signed a contract the day before with Korea Gas Corporation to supply a 1MW (megawatt) class PEM (polymer electrolyte membrane) water electrolysis facility. This is the first time a PEM water electrolysis facility with a capacity of 1MW or more per unit has been introduced domestically. While small and medium-sized enterprises have produced KW-class facilities so far, this is the first time MW-class facilities have been supplied. The project will proceed by producing green hydrogen through water electrolysis using renewable energy power generated at the Haengwon wind power complex in Jeju Island and supplying it to hydrogen charging stations within Jeju. Verification of facility efficiency and safety will be handled by the lead organizations, Jeju Energy Corporation and Korea Gas Corporation. The company explained, "The selection was based on recognition of excellent technology, price competitiveness, and overseas order achievements in the PEM water electrolysis field, as well as proactively securing demonstration exceptions for core devices to meet domestic safety standards."

Image of a 1MW-class polymer electrolyte membrane (PEM) type water electrolysis facility by the U.S. hydrogen company Plug Power, which established a joint venture with SK E&S. (Photo by SK E&S)

The excellence of the PEM method can be found in its ability to reduce the intermittency characteristic of renewable energy (increased power instability due to weather). Compared to the existing alkaline water electrolysis method, it takes less time to start operation and has superior load response capability, designed to operate without issues even when power supply fluctuates. It is compact and requires lower maintenance costs. This technology development is also a government national project. Since Plug Power is the world's number one company in the PEM water electrolysis facility market, this contract is expected to significantly boost the localization of facilities. SK Plug Hyverse is expected to become the largest green hydrogen supplier in South Korea, producing and supplying 450 tons of green hydrogen annually starting in 2025. To supply water electrolysis facilities and hydrogen fuel cell products domestically and in Asia in the second half of the year, it is building a hydrogen facility production and research base called the 'Gigafactory' in Cheongna International City, Seo-gu, Incheon, targeting completion by the second half of next year.

SK Group is significantly expanding its portfolio to include green and blue hydrogen as well as the nuclear market, strongly asserting its presence in the energy market. Although some criticize blue hydrogen as "not completely carbon neutral," the group's smooth progress on large-scale projects such as the Timor-Leste Bayu-Undan liquefied natural gas (LNG) production facility is well regarded in the industry.

Particularly notable is Vice Chairman Yoo Jung-joon of SK E&S, who views blue hydrogen and eco-friendly LNG as a "practical alternative" that addresses both environmental and energy supply issues. Considering that E&S leads the group's energy business, his remarks carry significant weight. He believes that carbon-neutral LNG, combined with carbon capture, utilization, and storage (CCUS) technologies, can be a realistic solution in the eco-friendly era. At the 28th World Gas Conference held at EXCO in Daegu on the 26th of last month, he stated, "Natural gas can complement the intermittency of renewable energy, making it a practical alternative that will help achieve net zero," adding, "There are various means for carbon neutrality, including blue hydrogen, CCUS, and carbon emission permits."

Regarding this agreement, Lee Ji-young, Vice President of SK E&S's Hydrogen Global Group and CEO of SK Plug Hyverse, said, "This Jeju demonstration project will be the first step toward localizing water electrolysis facilities and entering the rapidly growing overseas water electrolysis market," adding, "SK E&S will continue to expand technological cooperation with Plug and contribute to building a domestic hydrogen ecosystem based on clean hydrogen."