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Hydrogen Energy Bidding Market is Likely to Get Started by South Korea

Hydrogen Energy Bidding Market is Likely to Get Started by South Korea

Hydrogen Energy Bidding Market is Likely to Get Started by South Korea

  • 24-Mar-2023 4:41 PM
  • Journalist: Peter Schmidt

South Korea: By commercialising clean hydrogen power generation by 2027, South Korea hopes to take the lead in the world of hydrogen energy production. The commerce and industry ministry has set ambitious goals for cutting greenhouse gas emissions by around 8.3 million tonnes from 2027 levels by 2030. In an effort to meet these goals, Motie launched the first Hydrogen power bidding market in the world with the hope that competition amongst businesses will lower prices. The Ministry announced intentions to launch a general market and a clean market for bidding on Hydrogen power generation on March 13. While the clean market is anticipated to become available from early 2024 following the implementation of a certification and certain laws, the general market will open twice in the first half of 2023 as this market and supply infrastructure are still developing for power generation, the market is expected to split into two parts one for general hydrogen power generation and other for clean hydrogen power generation.

In order to account for a higher clean hydrogen supply in the future, the general market will open in 2023 with new bids of 1,300 GWh/yr starting in 2025. Beginning in 2024, the clean market will feature new bids of 3,500-3,500 GWh/yr starting in 2027. According to Motie, the specific goal of 3,500 GWh of power generation in 2027 was set which was lower than the target co-firing rates of 50 percent hydrogen and 20 percent ammonia and the goals are to be met starting in 2028, when power generation is expected to reach about 6,500 GWh/yr.

In addition to that, by 2025, the ministry hopes to have accomplish national research and development on technology that will enable 20 percent ammonia co-firing in coal-fired power plants and 50 percent hydrogen blending in gas turbines, with long-term plans to create approx. 100 percent hydrogen electric turbines and 50 percent ammonia co-firing. From 2025, utilities will purchase electricity from the auction market, with buyers' purchase volumes distributed based on the percentage of transactions in the power market the year prior.

The ministry further intends to implement. long-term contracts for the market's hydrogen power generation span of10 to 20 years to eliminate the uncertainty of private investment in the hydrogen ecosystem. It is also necessary to consider the investment period, which is typically 15 years or more, when setting the contract period for hydrogen power generation volumes secured in the market.

By establishing a forward market for hydrogen energy, South Korea is moving closer to a future with clean and renewable energy. This plan seeks to ensure the establishment of an effective hydrogen supply chain and will replace the current spot market. The new system aims to ensure that investments in infrastructure for fuel production and power generation come before electricity is produced, contributing to the development of a strong and effective network of renewable energy sources. Also, by developing infrastructure and utilizing government assistance, domestic companies in Taiwan's hydrogen industry are encouraged to participate actively. The Ministry of Economic Affairs (Motie), for instance, provides assistance with the acquisition of bases and pipes. This financial support is anticipated to further support those within the industry who wish to contribute to its growth.

Beside this, When evaluating producer bids, authorities should take into account localizing co-firing facilities, producing domestic clean hydrogen, and introducing clean hydrogen with domestic firm involvement. Participants in the industry said this would support the development of the domestic hydrogen market during a meeting with Motie on March 21.

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