The site of the Yongin Semiconductor Cluster in Wonsam-myeon, Cheoin-gu, Yongin-si, Gyeonggi-do, where construction is underway. 2024.1.15 [Image source=Yonhap News]
The government has expressed reluctance regarding the liquefied natural gas (LNG) combined heat and power (CHP) plant that SK E&S plans to build in Yongin. SK intended to construct the LNG CHP plant to support the semiconductor factory that SK Hynix is building in Yongin, but the government drew a clear line, stating that there is no issue with electricity and heat supply even without a new LNG power plant.
On the 26th, a senior official from the Ministry of Trade, Industry and Energy explained, "The LNG CHP plant that SK E&S is promoting is not intended to supply the electricity it produces to SK Hynix but to sell it to Korea Electric Power Corporation (KEPCO, the power market). The 2.8 gigawatts (GW) of power required by SK Hynix’s Yongin semiconductor cluster until 2038 is already secured from KEPCO, so there is absolutely no problem with electricity supply."
SK Hynix had already signed a power supply contract with KEPCO in December 2021.
Earlier, some media reported that SK Hynix had planned from the initial stages to receive electricity and steam necessary for factory operation from a 1,200-megawatt (MW, 1.2 GW) LNG power plant constructed and operated by its affiliate SK E&S, but the Ministry of Trade, Industry and Energy, the competent authority, halted the plant’s construction citing carbon neutrality.
According to the Ministry of Trade, Industry and Energy, SK E&S applied for a district energy business permit from the government last November under the plan to build an LNG CHP plant in Yongin to supply heat needed by SK Hynix and sell electricity to KEPCO. It was explained that the plant was never intended primarily to supply electricity to SK Hynix.
The Ministry also expressed a negative stance on SK E&S’s plan to provide heat or steam from the LNG CHP plant to SK Hynix. Semiconductor factories require heat and steam to maintain cleanrooms at constant temperature and humidity.
A senior official from the ministry said, "It requires careful consideration from economic and environmental perspectives whether there is a need to newly install such a large-scale 1.2 GW LNG power plant solely for heat supply. Heat can be supplied through self-owned boilers or self-operated CHP systems." In fact, SK Hynix’s factories in Icheon and Cheongju supply heat and steam through self-owned power plants or boilers. Samsung Electronics’ Yongin semiconductor factory also plans to supply heat by installing self-owned boilers.
Meanwhile, Samsung Electronics’ Yongin semiconductor factory has already decided to supply electricity through six LNG power plants. Regarding this, the ministry explained, "Samsung Electronics’ six LNG power plants are conversions from existing coal-fired power plants to LNG power plants, which is different from the SK E&S LNG CHP plant plan."
The government’s explanation is that it must be cautious about constructing new LNG power plants for carbon neutrality by 2050. Even when converting coal-fired power plants to LNG power plants, the government is promoting a more eco-friendly hydrogen co-firing power generation method.
A senior official from the Ministry of Trade, Industry and Energy said, "The electricity required for the Yongin semiconductor cluster has been secured until 2038, and after 2038, it is planned to supply nuclear and renewable energy through transmission lines."
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