SK affiliates sign largest renewable energy deal in Korea

(SK E&S)

SK Group announced on Friday that nine of its affiliates have entered a long-term agreement to procure 537 gigawatt-hours of renewable energy annually from SK E&S, a clean energy provider within the group.

The 20-year deal is the largest direct renewable energy purchase agreement, or PPA, ever in Korea, and is expected to cut 5 million metric tons of greenhouse gas emissions over two decades, the group said, equivalent to planting some 20 million pine trees nationwide.

The size of the deal was not disclosed. The nine affiliates chose SK E&S after comparing quotes from multiple suppliers, and will now receive electricity at competitive rates thanks to the large volume, parent conglomerate SK Group said.

Under this PPA, SK E&S will supply 537 GWh of solar energy annually starting in 2026.

The volume, which is equivalent to the energy needs of around 190,000 households per year, will be used to power major sites and data centers of the participating affiliates, including mobile carrier SK Telecom, semiconductor materials manufacturer SK Siltron and semiconductor chemicals producer SK Materials.

The PPA model promises a stable, long-term financial structure for new clean energy projects by allowing energy consumers to purchase electricity directly from the energy supplier over a long contract.

SK Materials already signed a 65 GWh deal last year and has raised the volume of its purchase to 171 GWh, which is the biggest amount among the participants.

SK Group Chairman Chey Tae-won has advocated for an accelerated transition to net-zero carbon emissions across the group.

“SK Group should strive to chip away 1 percent of the global carbon reduction target by 2030 -- which is about 200 million tons of carbon emissions. It’s all about leading the change for eco-friendly business and achieving a net-zero footprint by 2035,” Chey said at the group’s executive seminar in 2021.

By Moon Joon-hyun(mjh@heraldcorp.com)