SEOUL – Ground was broken on Monday in South Korea by a local-German joint venture on what is claimed to be the world’s largest liquid hydrogen production facility.
South Korean firm Hyosung Heavy Industries and German chemical multinational Linde Group have teamed up for the venture, providently set in the industrial city of Ulsan on the country’s east coast.
It is just the latest landmark in the country’s nascent hydrogen strategy and its upgrade to its impressive next-generation portfolio of industrial offerings. These have expanded beyond old-school metal-bashing staples such as ships, autos and steel to encompass semiconductors, displays, batteries, electronic devices and bio-pharmaceuticals.
This mighty manufacturing base points to a problem. Korea’s power-hungry economy needs high-grade, consistently generated power sources rather than oscillating renewable sources such as wind, solar or hydro. This could explain a historically low emphasis on green energy.
Government sources in Seoul told Asia Times that South Korea has about 6% of renewables in its energy mix. Outside observers put that percentage lower.
In 2018, According to the International Energy Agency, the country “had the lowest share of energy from renewable sources in energy supply among all IEA countries.”
According to Our World in Data, the share of energy from renewables in Canada was 27.64%, in Germany 17.4%, in the UK 14.45%, in China 12.26%, in Japan 9.31%, in the US 8.71% and in India 7.78%. South Korea’s percentage was just 2.54%, according to the same data.
For a country that is, like all other advanced economies, under international pressure to reduce its carbon footprint, this presents a major problem.
Hydrogen – the world’s most common element – could be the saving grace. As a clean, albeit not renewable energy source, it offers South Korea one avenue out of its power generation conundrum.
Hydrogen fuel cells combine hydrogen and oxygen in an electrochemical reaction that generates power, with heat and water vapor being the only byproducts.
Hydrogen fuel cells can use liquid hydrogen, or can use hydrogen from other chemical processes. The global hydrogen fuel cell market is expected to hit US$49.12 billion by 2026, according to a 2019 report by Reports and Data.
The Hyosung-Linde Group plant in Ulsan is set to be complete by 2023, according to local press reports. It will boast a production capacity of 13,000 tonnes of liquid hydrogen a year – enough to put 100,000 vehicles on the road and reduce carbon dioxide emissions by 130,000 tonnes each year, according to Hyosung Heavy Industries.
Ulsan – sometimes informally dubbed “Hyundai Town” – is a center for car manufacturing of Hyundai Motor Group, and home to the world’s largest shipyard, run by Hyundai Heavy Industries. Multiple plants operate in the town supplying components to these major operations.
Demand for hydrogen is likely to come from all the above elements – for factory operations, and for cars and vessels. According to an earlier statement, the JV will also build some 50 new hydrogen vehicle charging stations and expand facilities at 70 existing stations nationwide.
Hyosung is not alone in investing in hydrogen.
In August 2020, conglomerate Hanwha pressed the start button on the largest industrial hydrogen fuel cell power plant in the world at the Daesan Industrial Complex, southwest of Seoul. The plant was, according to specialist industry-media Powermag, the “first to use only hydrogen recycled from petrochemical manufacturing.”
The 50MW power plant could generate enough power to supply 160,000 South Korean homes.
“With the completion of this plant, we will help the government establish a roadmap to hydrogen energy while boosting the local economy,” Hanwha’s CEO said. And the company claims that the energy could not be cleaner.
The Daesan plant is a “near-zero-waste operation.” Microfilters installed on the fuel cells make the plant even greener, cleaning “the same amount of air that 350,000 people breathe annually,” Hanwha said on its website.
Hyosung and Hanwha may be ahead of the game for now, but they will soon have company.
Top-five industrial group SK, which has arms in chip-making, mobile telecoms and energy, is investing $16.4 billion in a massive hydrogen energy infrastructure, the company announced in March.
According to specialist publication Offshore Energy, the funds will be invested over five years. The first facility to come online will be a liquefied hydrogen plant with annual output of 30,000 tonnes – dwarfing the Hyosung-Lind plan – by 2023. A second facility will produce 250,000 tonnes of liquefied hydrogen from LNG by 2025.
While Hyosung, Hanwha and SK are in the business of creating and distributing hydrogen, other companies are releasing plans for its use as a power source.
Hyundai Motor, which released a hydrogen fuel-cell electric vehicle that it claims was a world first in 2013, is working to commercialize hydrogen cars and trucks – as well as hydrogen drones, hydrogen vessels, trains and Urban Air Mobility (UAM) solutions.
According to the roadmap on its corporate website, the auto group plans to manufacture 500,000 hydrogen-powered vehicles per year by 2030. It is cooperating with multiple partners across the world, including Toyota and Shell, to standardize hydrogen-charging technologies.
Separately, shipbuilder Hyundai Heavy, which also makes offshore platforms, robots and rolling stock, released its first hydrogen blueprint in March. The plan envisages a hydrogen value chain that will extend from production to transport, storage and sale of fuel cells by 2030.
The company plans to create hydrogen fuel-cell propelled ships and install 180 hydrogen fueling stations nationwide. And in October 2020, it received planning approval to build the world’s first liquid hydrogen carrying vessel.
Germany-founded, UK-headquartered multinational Linde noted in a statement that the “robust hydrogen network” it is creating with Hyosung will support South Korea’s “ambitious decarbonization agenda to achieve net zero emissions by 2050.”
And indeed, these private developments are all in synch with government policy as Seoul signals a major push to develop hydrogen.
In January 2019, multiple arms of government – the Ministry of Trade, Industry and Energy, the Ministry of Economy and Finance, the Ministry of Science, Technology and ICT, the Ministry of Environment, the Ministry of Land, Infrastructure and Transportation and the Ministry of Oceans and Fisheries – linked arms to create a blueprint for a “Hydrogen Economy.”
The goal is to create a hydrogen ecosystem that encompasses production, storage, transportation and usage.
According to a 2019 research report from the Netherlands Enterprise Agency on South Korea’s hydrogen ambitions, “it is expected that the hydrogen economy will be the next growth engine, to create 43 trillion won ($37 billion) in economic value and 420,000 jobs by 2040.”
South Korea has a long, detailed and impressive playbook to draw from when it comes to setting top-down industrial policies. These policies give industry incentives to invest in targeted sectors in which the bureaucratic brains trust believes the country can achieve world-class competencies.
The country created a world-class heavy industrial economy from scratch in the 1960s by building its first tranche of national champions – in the construction, steel, petrochemicals and automotive sectors – around the creation of national physical infrastructure.
It used a similar formula to repeat that feat in the late 1990s and 2000s, generating a clutch of new economy players that grew up around a cutting-edge mobile telecoms and broadband internet backbone.
When it comes to hydrogen, Seoul is being typically ambitious. It will incentivize the development of hydrogen-powered cars, ships, trains and factory machinery.
The government plans to increase the number of hydrogen-powered cars from 2,000 in 2018 to 6.2 million by 2040, to and make the country the leading producer of hydrogen-powered vehicles and fuel cells globally by 2030.
In terms of power generation, Seoul aims to reach a combined hydrogen capacity of 15 gigawatts by 2040, and will supply 2.1 gigawatts of fuel cell capacity – enough power to supply 940,000 households.
However, even this impressive capacity will be a long way from satisfying all national energy needs.
According to the IEA, South Korea’s total energy consumption in 2018 was 571.93 terawatts. (A gigawatt is 1,000 megawatts; a terawatt is 1,000 gigawatts.) And in 2019, South Korea had 20.9 million households.