[2023 Economic Policy] Emphasis on SMR and Hydrogen Energy New Technologies... Will SK, Lotte, and Others Benefit?

President Yoon Suk-yeol is receiving an explanation about the Small Modular Reactor (SMR) during his visit to the Korea Atomic Energy Research Institute in the Daedeok Research Complex, Daejeon, in November last year when he was a presidential candidate. [Image source=Yonhap News]

[Asia Economy Reporter Donghoon Jeong] The government's 'New Growth Strategy 4.0' for next year's economic policy focuses on the development and industrial promotion of new energy sources such as SMR (Small Modular Reactor), hydrogen, and solar power. Accordingly, companies that have concentrated on eco-friendly energy development, such as SK, Lotte, Hanwha, and Doosan, are expected to gain momentum.

On the 21st, the government selected the energy sector as one of the 15 major projects within the New Growth Strategy 4.0. Specifically, it set detailed goals such as completing the SMR standard design by 2028, developing MSR (Molten Salt Reactor) technology by 2026, and domesticating 1-2 MW class clean hydrogen production technology by 2027.

The government especially plans to create and support a public-private matching fund worth 399 billion KRW to promote challenging next-generation nuclear power technology development led by the private sector. Through this, it aims to alleviate initial R&D risks and encourage companies to develop next-generation nuclear power technologies.

In the SMR sector, the Doosan Group is making aggressive investments. Since 2019, Doosan has been growing its business by investing 44 million USD in the U.S. SMR company NuScale Power, the first domestic company to do so, along with Whale Investment and Industrial Bank of Korea. Currently, it is also considering equity investment in X-energy, one of the top three U.S. SMR companies alongside NuScale Power and TerraPower.

In the hydrogen sector, the plan is to focus on domesticating core technologies, securing fundamental technologies, and establishing production and power generation infrastructure. In particular, to demonstrate hydrogen production via water electrolysis, a 12.5 MW water electrolysis demonstration test is planned in Jeju by 2026. Hydrogen is a field where SK and Lotte are concentrating their business efforts.

SK E&S received regulatory sandbox approval from the Ministry of Trade, Industry and Energy and launched the world's first large-scale blue hydrogen project. SK E&S and Korea Midland Power will invest about 5 trillion KRW in Boryeong, Chungnam, to build the world's largest blue hydrogen production base near the Boryeong LNG Terminal. This project aims to produce 250,000 tons of blue hydrogen annually. Lotte Chemical is also developing hybrid CO₂ (carbon dioxide) capture liquefaction process technology for blue hydrogen production. In June, Lotte Chemical was selected as a joint research institute participating in a national project in the CCU field by the Ministry of Science and ICT, developing a process that captures and utilizes more than 100 tons of carbon dioxide per day.

Additionally, solar power, a representative eco-friendly energy, plans to create an 'ultra-gap' through next-generation cell development. The government aims to commercialize solar tandem cells worldwide for the first time by 2026. Tandem cells refer to solar cells that maximize power generation efficiency and reduce production costs through dual junctions of different cells.

In the solar power sector, Hanwha is growing into a global company. Hanwha Solutions Q CELLS division, a solar power company, targets mass production of perovskite-based tandem cells by June 2026. In March, it set its own highest efficiency record by developing tandem cells with a maximum efficiency of 28.7% in collaboration with Germany's Helmholtz-Zentrum Berlin (HZB).