Competition for Korea’s first clean hydrogen power projects heats up

Korea Power Exchange CI

SK innovation E&S, Hanwha Impact Corp. and three subsidiaries of the state-owned power company have submitted bids for South Korea‘s first clean hydrogen power generation projects.

According to industry sources on Thursday, the Korea Power Exchange will close the bidding for clean hydrogen power projects on Friday. Five companies are expected to participate: SK innovation E&S, Hanwha Impact, Korea Southern Power Co., Korea East-West Power Co., and Korea Midland Power Co. The Korea Power Exchange plans to announce the preferred bidder in two weeks.

The Korean government implemented the Clean Hydrogen Energy Portfolio Standard (CHPS) in 2023, a move aimed at facilitating the transition to clean hydrogen energy. The CHPS requires Korea Electric Power Corporation (KEPCO) and other entities to prioritize annual purchases of electricity generated from clean hydrogen and ammonia. The government launched the world’s first clean hydrogen power generation market in May 2024 to support this initiative.

The initial tender is for 6,500 gigawatt-hours, enough to power about 1.55 million homes annually. The selected generators will be able to sell power to KEPCO and other entities at fixed prices for 15 years, starting in 2027 or 2028.

SK innovation E&S and Korea Midland Power plan to submit a joint proposal for a liquefied natural gas (LNG)-hydrogen co-firing project in Boryeong. SK innovation E&S also aims to establish a blue hydrogen production base in Boryeong by 2028, which will produce 125,000 tons of carbon-free blue hydrogen annually to fuel the co-firing power plant.

Hanwha Impact is advancing a 120-megawatt hydrogen-fueled power plant project in Daesan, South Chungcheong Province, while Korea Southern Power is preparing an ammonia co-firing project at its Samcheok Green Power Unit 1 coal plant, which will use 20 percent ammonia for power generation. Korea East-West Power plans to use coal-ammonia co-firing at its Dangjin plant by 2027, while Korea Midland Power is targeting ammonia co-firing at its Shin Boryeong Unit 2.

For its part, Lotte Fine Chemical Co. is expected to supply clean ammonia to the winning bidder among the three KEPCO subsidiaries.

According to the government‘s 11th Basic Plan for Long-Term Electricity Supply and Demand, hydrogen and ammonia power generation will account for 2.4 percent of Korea’s energy mix by 2030 and 5.5 percent by 2038.

“Achieving both power stability and carbon neutrality with renewables and nuclear power alone is challenging,” an industry official said. “Clean hydrogen power is expected to play a key role in reducing carbon emissions from coal and LNG power generation.”