South Korea launches green H2 pilot project in Jeju

  • Market: Hydrogen
  • 03/10/22

South Korea's industry and trade ministry (Motie) announced on 29 September the start-up of what it describes as the country's first large-scale hydrogen demonstration project in Jeju city.

The 12.5MW project, costing 62bn South Korean won ($43.3mn), will run until March 2026 and will be operated by state-controlled utility Korea Southern Power. The pilot project aims to demonstrate hydrogen production with all four existing hydrolysis systems using a high renewable energy ratio — alkaline electrolysis cell, polymer electrolyte membrane, solid oxide electrolysis cell and anion exchange membrane.

The project aims to produce 1,176 t/yr of hydrogen at a 60pc utilisation rate. This is in line with a government target to supply 100pc of hydrogen demand in 2050, or 27.9mn t, with clean hydrogen and expand its clean hydrogen self-sufficiency rate to over 60pc. The produced hydrogen will be supplied to 200 cleaning vehicles and 300 buses in Jeju.

Installed electrolysis capacity has to rise to 850GW by 2030 and 3,600GW by 2050 to achieve net zero emissions by 2050, according to the IEA.

"Jeju will be the first to achieve the government's renewable energy target of 21.5pc in 2030 and build a global green hydrogen hub based on this," said Jeju governor Oh Young-hun. "We will take the lead in the national hydrogen economy by building hydrogen ports and importing and converting hydrogen."

"The government will actively make efforts to overhaul and deregulate related systems in order to induce and support private investment in the hydrogen industry, including the introduction of the clean hydrogen power generation system in 2023 and the implementation of the clean hydrogen certification system in 2024," said Motie's second vice-minister Park Il-joon.

More capacity comes on line

South Korea has also launched the country's third hydrogen production base in Samcheok city's Gangwon province on 30 September, Motie said the same day.

The Samcheok plant is Gangwon's first such plant with shipping facilities and has a production capacity of 365 t/yr. Hydrogen produced will be supplied to the province's hydrogen refuelling stations through a shipping facility. The Samcheok production base comes after the Pyeongtaek base that launched in July and the Changwon plant that has been operating since the end of last year.

Gangwon does not have any by-product hydrogen production facilities, so Chungcheongnam province's Dangjin and Daesan cities have been supplying the province's eight hydrogen charging stations. But supplies have to travel up to 200km, resulting in "burdensome transportation costs", Motie said.

The Samcheok facility will be fully operational from mid-October onwards, with supplies sent to five hydrogen charging stations in the province each day.

Motie also plans to start operating all seven natural gas-based small-scale hydrogen production bases early next year. Future hydrogen production facilities will only include those that produce green hydrogen through hydrolysis, or blue hydrogen using carbon capture to achieve carbon neutrality.

"In the future the government plans to push ahead with the transition to the hydrogen economy without a hitch by upgrading infrastructure related to hydrogen storage and transportation," said Park.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
24/04/24

Norway-German H2 pipeline hinges on demand: Equinor

Norway-German H2 pipeline hinges on demand: Equinor

London, 24 April (Argus) — Norway and Germany have renewed a commitment to the idea of a hydrogen pipeline, but Norwegian state-owned Equinor expects the link will come in a secondary stage of development as it is focused on hydrogen production in mainland Europe as a first step. Equinor plans to take a final investment decision in late 2025 on its 210,000 t/yr Eemshaven low-carbon hydrogen plant in the Netherlands, the company's director of H2 northwest Europe Henrik Solgaard Andersen said at the Hydrogen and Fuel Cells conference in Hanover. Equinor hopes the project will supply German buyers that participate in the country's carbon contracts for difference (CfD) auctions, which are designed to help large industry decarbonise, Andersen said. Equinor has entered the final phase of studies for the plant. The facility would reform natural gas from the Norwegian offshore to hydrogen with carbon capture and storage (CCS). Undertaking this in the Netherlands means existing pipelines can be used to carry the gas from Norway rather than having to build new links. Equinor sees this as its most mature hydrogen project, followed by one near the German port of Rostock , and one near Ghent in Belgium , according to Andersen. These "local European projects" are designed for early market development and "will be the first step," he said. Equinor expects to start large-scale production of hydrogen in Norway with pipeline exports to the continent only when there is a big enough market, he said. "You don't invest in a pipeline €4bn-6bn just for [transporting] a few molecules," he said. "You need to believe in the market." Equinor in early 2023 announced a plan to supply hydrogen from Norway to German utility RWE for use in power plants. But Berlin has shifted its plans for hydrogen power a couple of times since then. It also has ambitions to use hydrogen in sectors like steel, but companies have not yet taken firm investment decisions, meaning there is uncertainty about how much hydrogen demand will materialise and when. A joint government task force working on a Norwegian-German pipeline has identified the first regulatory barriers that need to be addressed, and private infrastructure companies will continue to study the logistics, according to an announcement from Oslo and Berlin. This will build on the positive feasibility study from last year. German gas system operator operator Gascade, which is developing the AquaDuctus North Sea pipeline connection to Germany, and Norwegian state-owned operator Gassco that is developing the Norwegian side, are aiming for a 2030 start date, the companies reaffirmed this week. Gascade has proposed an open access pipeline that would be able to aggregate hydrogen exports from England, Scotland, Norway, Denmark, and North Sea wind farms. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

Canada furthers investment in GHG reductions


18/04/24
News
18/04/24

Canada furthers investment in GHG reductions

Houston, 18 April (Argus) — The Canadian government plans to have C$93bn ($67.5bn) in federal incentives up and running by the end of the year to spur developments in clean energy technology, hydrogen production, carbon capture utilization and storage (CCUS) along with a new tax credit for electric vehicle (EV) supply chains. The Canada Department of Finance, in its 2024 budget released on 16 April, said it expects to have the first planned investment tax credits (ITCs), for CCUS and renewable energy investments, in law before 1 June. The ITCs would be available for investments made generally within or before 2023 depending on the credit. The anticipated clean hydrogen ITC is also moving forward. It could provide 15-40pc of related eligible costs, with projects that produce the cleanest hydrogen set to receive the higher levels of support, along with other credits for equipment purchases and power-purchase agreements. The government is pursuing a new ITC for EV supply chains, meant to bolster in-country manufacturing and consumer adoption of EVs with a 10pc return on the cost of buildings used in vehicle assembly, battery production and related materials. The credit would build on the clean technology manufacturing ITC, which allows businesses to claim 30pc of the cost of new machinery and equipment. To bolster reductions in transportation-related greenhouse gas (GHG) emissions, the government will also direct up to C$500mn ($363mn) in funding from the country's low-carbon fuel standard to support domestic biofuel production . Transportation is the second largest source of GHG emissions for the country, at 28pc, or 188mn metric tonnes of CO2 equivalent, in 2021. But the province of Alberta expressed disappointment at the pace of development of ITC support that could help companies affected by the country's move away from fossil fuels. "There was nothing around ammonia or hydrogen, and no updates on the CCUS ITCs that would actually spur on investment," Alberta finance minister Nate Horner said. The incentives are intended to help Canada achieve a 40-45pc reduction in GHG emissions by 2030, relative to 2005 levels. This would require a reduction in GHG emissions to about 439mn t/yr, while Canada's emissions totaled 670mn in 2021, according to the government's most recent inventory. The budget also details additional plans for the Canada Growth Fund's carbon contracts for a difference, which help decarbonize hard-to-abate industries. The government plans to add off-the-shelf contracts to its current offering of bespoke one-off contracts tailored to a specific enterprise to broaden the reach and GHG reductions of the program. These contracts incentivize businesses to invest in emissions reducing program or technology, such as CCUS, through the government providing a financial backstop to a project developer. The government and developer establish a "strike price" that carbon allowances would need to reach for a return on the investment, with the government paying the difference if the market price fails to increase. CGF signed its first contract under this program last year , with Calgary-based carbon capture and sequestration company Entropy and has around $6bn remaining to issue agreements. To stretch this funding further, the Canadian government intends for Environment and Climate Change Canada to work with provincial and territorial carbon markets to improve performance and potentially send stronger price signals to spur decarbonization. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

US Gulf lowest-cost green ammonia in 2030: Report


16/04/24
News
16/04/24

US Gulf lowest-cost green ammonia in 2030: Report

New York, 16 April (Argus) — The US Gulf coast will likely be the lowest cost source of green ammonia to top global bunkering ports Singapore and Rotterdam by 2030, according to a study by independent non-profits Rocky Mountain Institute and the Global Maritime Forum. Green ammonia in Singapore is projected to be sourced from the US Gulf coast at $1,100/t, Chile at $1,850/t, Australia at $1,940/t, Namibia at $2,050/t and India at $2,090/t very low-sulphur fuel oil equivalent (VLSFOe) in 2030. Singapore is also projected to procure green methanol from the US Gulf coast at $1,330/t, China at $1,640/t, Australia at $2,610/t and Egypt at $2,810/t VLSFOe in 2030. The US Gulf coast would be cheaper for both Chinese bio-methanol and Egyptian or Australian e-methanol. But modeling suggests that competition could result in US methanol going to other ports, particularly in Europe, unless the Singaporean port ecosystem moves to proactively secure supply, says the study. In addition to space constraints imposed by its geography, Singapore has relatively poor wind and solar energy sources, which makes local production of green hydrogen-based-fuels expensive, says the study. Singapore locally produced green methanol and green ammonia are projected at $2,910/t and $2,800/t VLSFOe, respectively, in 2030, higher than imports, even when considering the extra transport costs. The study projects that fossil fuels would account for 47mn t VLSFOe, or 95pc of Singapore's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia (about 1.89mn t VLSFOe) and green methanol (3.30mn t VLSFOe). Rotterdam to pull from US Gulf Green ammonia in Rotterdam is projected to be sourced from the US Gulf coast at $1,080/t, locally produced at $2,120/t, sourced from Spain at $2,150/t and from Brazil at $2,310/t. Rotterdam is also projected to procure green methanol from China at $1,830/t, Denmark at $2,060/t, locally produce it at $2,180/t and from Finland at $2,190/t VLSFOe, among other countries, but not the US Gulf coast . The study projects that fossil fuels would account for 8.1mn t VLSFOe, or 95pc of Rotterdam's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia, at about 326,000t, and green methanol, at about 570,000t VLSFOe. Rotterdam has a good renewable energy potential, according to the study. But Rotterdam is also a significant industrial cluster and several of the industries in the port's hinterland are seeking to use hydrogen for decarbonisation. As such, the port is expected to import most of its green hydrogen-based fuel supply. Though US-produced green fuels are likely to be in high demand, Rotterdam can benefit from EU incentives for hydrogen imports, lower-emission fuel demand created by the EU emissions trading system and FuelEU Maritime. But the EU's draft Renewable Energy Directive could limit the potential for European ports like Rotterdam to import US green fuels. The draft requirements in the Directive disallow fuel from some projects that benefit from renewable electricity incentives, like the renewable energy production tax credit provided by the US's Inflation Reduction Act, after 2028. If these draft requirements are accepted in the final regulation, they could limit the window of opportunity for hydrogen imports from the US to Rotterdam to the period before 2028, says the study. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Capital costs slow renewables in developing world


16/04/24
News
16/04/24

Capital costs slow renewables in developing world

New York, 16 April (Argus) — Higher cost of capital in emerging economies for clean energy technologies remains the key challenge for attracting investments to meet the goal set last year of tripling global renewable capacity by 2030. Developing nations, excluding China, need to spend around $2.4 trillion/yr on clean energy and climate resilience by 2030 to help reduce global warming, according to the UN. But governmental and development spending will fall short, said Avinash Persaud, the special adviser on climate change to the president of the Inter-American Development Bank. "There are not enough subsidies in the world to blend 2.4 trillion/yr every year to fund the energy transition," Persaud said today at the Columbia Global Energy Summit in New York. And characteristics of renewable energies make filling the gap with private-sector financing more difficult than for traditional hydrocarbons. Some clean energy technologies such as solar plants and wind farms have seen their cost of capital decreasing in more developed regions. But this cost, or the minimum expected financial return to justify an investment, for utility-scale solar PV projects in emerging and developing economies was more than twice that in advanced economies last year, energy watchdog the IEA has said. The biggest risk for developing clean energy projects in emerging economies stands on currency risks, according to Persaud. "When an investor in the developed world invests in an oil, gas, coal project in a developing country they know they have an asset that is going to earn them a foreign currency revenue if they need it. They can export that," he said, adding that the case for renewables plants is different, raising the financial risk of projects. Investors in a solar farm are paid by local consumers of the utility in local currency, increasing the hedging cost. The IEA has estimated that narrowing the gap in the cost of capital between emerging and developing economies and advanced economies by 1pc could reduce financing costs for clean energy by $150 bn/yr. By Jacqueline Echevarria Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Singapore, Rotterdam advance 'green' shipping corridor


15/04/24
News
15/04/24

Singapore, Rotterdam advance 'green' shipping corridor

Singapore, 15 April (Argus) — The Singapore-Rotterdam Green and Digital Shipping Corridor (GDSC) is accelerating its decarbonisation efforts with new partners, and is advancing initiatives to encourage the uptake of sustainable marine fuels. The world's two largest marine fuel hubs established the Singapore-Rotterdam GDSC in August 2022, in a push for maritime decarbonisation and digitalisation between the ports. There are 26 global value-chain partners in the GDSC initiative including fuel suppliers, shipping lines, knowledge partners and financial entities. German container shipping line Hapag-Lloyd is the latest partner in the Singapore-Rotterdam trade lane, committing to operate large container vessels on zero and near-zero carbon emission fuels. Hapag-Lloyd is the world's fifth-largest liner shipping firm with at least 260 ocean-going vessels, according to the Maritime and Port Authority of Singapore (MPA). GDSC working groups will also pilot the uptake of sustainable marine fuels — like bio-methane, methanol, ammonia, and hydrogen — and test out commercial structures to reduce cost barriers in switching to alternative fuels. This includes a bio-methane working group that is studying regulations and standards to support adopting the fuel for marine bunkering on a commercial scale. GDSC partners also plan to carry out bio-LNG bunkering pilots over 2024-25, based on a mass balancing chain of custody principle. A methanol working group is working on fuel standards and knowledge exchange, in addition to addressing common challenges to carry out commercial methanol bunkering at Singapore and Rotterdam. And an ammonia working group is developing a framework to assess the lifecycle greenhouse gas intensity of green ammonia for bunkering, to be completed by 2025. Improvements to digitalisation have also been made as part of the GDSC initiative, with Singapore and Rotterdam successfully piloting an exchange of port-to-port data. Both ports will be able to exchange vessel arrival and departure times for port planning, and ships travelling between Singapore and Rotterdam can also optimise their port call voyage. The maritime sector is pushing towards a more resilient and efficient energy transition, and participants have pointed out that collaboration between countries and stakeholders would be key to green shipping corridors . The GDSC is a "very valuable collaboration in accelerating the twin transition: the integration of digital innovation in energy transition efforts," said chief executive officer of Port of Rotterdam Authority (PoR), Boudewijn Siemons. "Not only are we seeing the first results in standardization and data sharing for Port Call Optimization but also the first steps in moving towards operationalization of zero and low carbon fuels on this trade lane." Progress on the GDSC development also reflects that "public-private collaboration across global value chains can be achieved," said MPA chief executive Teo Eng Dih. By Cassia Teo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more