[Lagging Hydrogen Economy]
In the Decarbonization Era, Hydrogen Dependence Continues to Rise
Limits of Green Hydrogen Using Renewable Energy
Voices for Pink Hydrogen as an Alternative in Nuclear Power Nation Korea
"Catching Two Rabbits: Eco-friendliness and Economic Feasibility"
Possibility of Achieving 100 Years of Energy Independence
Global Carbon Neutral Trade Barriers Pose Challenges
Issues Including High-Level Radioactive Waste Disposal Facility Construction and Economic Feasibility
"Pink hydrogen is perfect for South Korea, a nuclear technology powerhouse."
South Korea has limited sunlight and a small land area, making it difficult to achieve carbon neutrality solely through renewable energy sources like solar and wind power. Even if the country were covered with solar and wind power facilities, it would still have to rely on coal and natural gas, which currently account for about 60% of power generation, to meet electricity self-sufficiency. Among industry experts, the consensus is that 'pink hydrogen' is the only alternative. Pink hydrogen is produced by splitting water using surplus electricity and heat from nuclear power generation. It emits no carbon and is cost-effective. It can simultaneously achieve both environmental friendliness and economic feasibility.
However, there are many hurdles to overcome. Above all, carbon-neutral trade barriers such as RE100 (Renewable Energy 100) and the European Union (EU)'s green taxonomy pose problems. South Korea's nuclear power plants lack a high-level radioactive waste disposal facility, and hydrogen is not recognized as decarbonized or renewable energy, resulting in disadvantages. Securing economic feasibility and safety is also a challenge.
The government pledged in its October 2021 2050 Carbon Neutrality Scenario to reduce greenhouse gas emissions to 40% of 2018 levels by 2030 and to zero by 2050. To achieve this, coal and liquefied natural gas (LNG) thermal power generation must be drastically reduced and completely phased out or only LNG plants partially retained by 2050. Instead, the share of renewable energy generation such as solar and wind power will be increased from 6.2% to 30.2%. The proportion of green hydrogen must also be expanded to 20% of total energy. The predicted hydrogen demand is 3.9 million tons in 2030 and 27.9 million tons in 2050. On the 21st, the government announced a revised carbon neutrality scenario that reduces the burden on the industrial sector while increasing the use of nuclear power and hydrogen, with finalization expected next month.
The problem is that South Korea faces limitations in producing green hydrogen domestically. Therefore, the government planned to import large quantities of green hydrogen produced using solar power from overseas regions such as the Middle East, Australia, and Africa. The additional costs are enormous. In 2021, Korea Gas Corporation predicted that by the 2050s, annual investments of around 60 trillion won would be required solely for hydrogen liquefaction, storage, and transportation.
The nuclear and industrial sectors propose pink hydrogen, produced using South Korea's nuclear technology strengths, as an alternative. Pink hydrogen is much cheaper than domestically produced green hydrogen. According to data submitted by the Ministry of Trade, Industry and Energy to the National Assembly last year, the production cost per kilogram of hydrogen from a wind power-based green hydrogen pilot facility in Jeju Island is about 15,000 won. In contrast, the U.S. Argonne National Laboratory and the International Energy Agency estimate the production cost of pink hydrogen to be around $2.5 per kilogram. The domestic nuclear sector claims that using nuclear power can reduce production costs to as low as $1.7 per kilogram.
Research in major countries overseas is also active. France announced in September 2020 its carbon neutrality plan, pledging to invest 30 billion euros to significantly increase hydrogen production, actively utilizing nuclear power as a major energy source. The United States, Japan, Germany, and others have also embarked on technology development. Since President Yoon Suk-yeol took office, the South Korean government has been actively promoting pink hydrogen introduction in cooperation with Korea Hydro & Nuclear Power. The goal is to develop demonstration production technology by 2024, scale up by 2027, and commercialize thereafter.
However, pink hydrogen carries the inherent problems of nuclear power generation. These include the costs of radioactive waste disposal generated during nuclear plant operation, increasing generation costs, and the risk of accidents, which are critical weaknesses.
The EU's green taxonomy, finalized in July 2022 to impose a carbon border tax, is also a burden. Although the EU classifies nuclear power as a decarbonized energy source, it requires the operation of a high-level radioactive waste disposal facility by 2050. South Korea currently only has low- and intermediate-level waste disposal sites and only temporary storage for high-level waste. Therefore, K-pink hydrogen is not recognized as decarbonized energy under the EU green taxonomy and is subject to the carbon border tax. Ultimately, a disposal facility capable of handling high-level waste must be constructed. This is not a problem that can be solved in the short term. The high-level waste disposal facility plan remains shelved within government departments.
Regardless of the high-level waste disposal facility installation, the private campaign RE100, which does not recognize nuclear power and hydrogen as renewable energy, is another obstacle. RE100 is a campaign started in 2014 by the UK-based international non-profit organization The Climate Group. Major countries, public enterprises, and large private companies have made RE100 membership a mandatory condition for procurement, effectively making it a regulation. In South Korea, major corporations such as Samsung Electronics, SK Group, and Naver have joined in large numbers because of this. RE100 argues that although nuclear power emits little carbon, considering total costs including waste disposal, it is not economically viable and thus not an alternative for carbon neutrality. In other words, RE100 does not recognize pink hydrogen as a future clean energy.
Pink hydrogen's price competitiveness compared to overseas green hydrogen is also a weakness. The domestic production cost of pink hydrogen (electricity price) is currently about 60 won per kWh. This is nearly four times higher than the overseas green hydrogen production cost (local solar power generation cost of 1 cent per kWh, about 13 won). Experts point out that even when adding transportation and storage costs for imports, it is expected to be cheaper than domestically produced pink hydrogen.
However, relying on overseas hydrogen production means losing price-setting power over another critical resource after oil and facing geopolitical risks. This is why Japan, when setting its hydrogen production plan in 2021, aimed to achieve energy self-sufficiency by having its companies produce 100 million tons of green hydrogen overseas.
By leveraging the strengths of a nuclear power powerhouse and effectively utilizing K-pink hydrogen, South Korea could pioneer a path to energy independence that has eluded it for the past 100 years since modern times. A 1GW-class nuclear power plant can produce about 200,000 tons of pink hydrogen annually. Some experts argue that selling this hydrogen to other regions as compensation for hosting nuclear plants could bring income worth several hundred billion won to those areas. In the oil era, this would be akin to having a large oil field in the neighborhood.
Lee Dong-hyung, Deputy Director at the Korea Atomic Energy Research Institute, said, "It is necessary to change the system to allow electricity from operating nuclear power plants to be used not only for electricity supply in power supply plans but also for hydrogen production," adding, "We must mass-produce dedicated small modular reactors (SMRs) to achieve economic feasibility and urgently resolve the construction of a high-level radioactive waste disposal facility."
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