Solar Power Instability Due to Weather
Increased Investment in Ammonia, LNG, etc.
Doosan, KEPCO Engineering Sign Agreement
Accelerating Ammonia Co-firing Power Project
SK, Innovation & E&S Lead
Speeding Up Technology Cooperation and Business
[Asia Economy Reporter Moon Chae-seok] As intermittency issues of major new and renewable energy sources such as solar power emerge as a weakness, companies are actively expanding investments in alternative fuels like ammonia and liquefied natural gas (LNG). In particular, SK and Doosan are drawing attention by broadening their energy portfolios through parallel investments in nuclear power and alternative fuels. Intermittency refers to the characteristic of solar power where power supply becomes unstable depending on the weather.
According to the industry on the 18th, major heavy chemical companies such as SK, POSCO, Doosan, and S-OIL are increasing investments in alternative fuels like ammonia and LNG. Although they are also investing in zero-carbon-emission sources such as solar power and green hydrogen, they are simultaneously investing in alternative fuels considering intermittency and low economic feasibility.
Despite being a company with a diverse energy portfolio including nuclear power and new and renewable energy, Doosan is steadily advancing its alternative fuel business. On the 14th, it signed a memorandum of understanding for the activation of the green ammonia co-firing power generation project with Korea Electric Power Technology, and Samsung C&T Construction Division. Doosan Energyability is capable of manufacturing main equipment such as ammonia co-firing boilers, KEPCO Technology handles power plant engineering, and Samsung C&T manages overseas production and domestic introduction. They also unveiled a blueprint to introduce green ammonia to a domestic 1000 MW-class power plant.
Doosan is also a formidable player in the gas sector. It produces 100% domestically made LNG turbines for the Korea Western Power Gimpo Combined Heat and Power Plant.
SK is accelerating its business mainly through SK Innovation and SK E&S. SK Innovation is increasing its investment in ammonia. On the 12th (local time), Vice Chairman Kim Jun flew to the United States and secured a $30 million (approximately 38 billion KRW) investment and technology cooperation commitment from Amogy, a company specializing in ammonia fuel cell systems.
SK E&S stands out in the LNG business. On the 26th of last month, it signed a strategic cooperation agreement on LNG and hydrogen with Beijing Gas Group, which operates approximately 29,900 km of natural gas pipelines in Beijing and surrounding areas. It is also involved in developing carbon capture and storage (CCS) projects such as a 10 million ton-scale CCS project utilizing the Bayu-Undan gas field in Timor-Leste and investing in the world's largest 12 million ton-scale CCS project in North America.
While several companies including POSCO, Hyosung, and S-OIL are investing in hydrogen and ammonia, some analyses suggest that the differentiation of Doosan and SK’s energy businesses lies in their consistent investment in 'alternative fuels.' This strategy considers issues such as spent nuclear fuel management in nuclear power, intermittency of solar power, and technological challenges and economic feasibility of hydrogen. Hydrogen is known to be transportable only in a liquefied form at minus 253 degrees Celsius, making the construction of suitable carriers and containers challenging. Due to transportation difficulties, it naturally takes time to improve economic feasibility.
On the 26th of last month, SK E&S CEO Vice Chairman Yoo Jung-joon stated at the World Gas Conference, known as the 'Gas Olympics,' that "Natural gas can help achieve net zero as a practical alternative by complementing the intermittency of renewable energy," and added, "There are various means for carbon neutrality such as the introduction of blue hydrogen, securing carbon capture, utilization, and storage (CCUS) technology, and purchasing carbon emission rights."
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