SK E&S, Plug Power to invest $750 million in hydrogen industry

President Yoon Suk Yeol speaks at a Korea-U.S. business roundtable in Washington on March 25. [JOINT PRESS CORPS]

SK E&S and New York-based Plug Power will together invest 1 trillion won ($750 million) in Korea's hydrogen projects in a move towards green energy production.

The investments include a factory for hydrogen equipment and a research center for core technologies. SK E&S will invest 510 billion won, while Plug Power will invest 490 billion won.

The factory will produce hydrogen fuel cells for vehicles and a water electrolysis platform for power generation, with commercial operations expected to begin in 2025.

Electrolysis is the process of electricity splitting water to extract and produce hydrogen. It is considered a technology vital to producing green hydrogen using renewable energy.

Some of the money will be used to establish a research center for hydrogen technologies, SK E&S said.

The hydrogen fuel cells will be supplied to SK's clean hydrogen complex in Boryeong, South Chungcheong, which aims to produce blue hydrogen starting in 2026. Blue hydrogen is manufactured in the same way as gray hydrogen but utilizes carbon capture, utilization, and storage technologies to capture and bury the emitted carbon emissions deep underground or convert it into other elements through chemical reactions.

The joint venture also plans to invest in building liquefied hydrogen stations across the country. Liquefied hydrogen has a higher energy storage density and stability compared with gaseous hydrogen.

SK E&S is scheduled to produce 30,000 tons of liquefied hydrogen this year in its Incheon plan and 50,000 tons in its Boryeong facility.

"The latest investment with Plug will be a turning point for Korea's hydrogen business," said CEO Choo Hyeong-wook of SK E&S.

"By using the Boryeong facility, we will endeavor to form a clean hydrogen ecosystem in Korea and foster it as a hub of the world's hydrogen industry."

SK E&S and SK Inc. bought 9.9 percent Nasdaq-listed Plug Power in January 2021 for $1.5 billion. SK E&S and Plug Power established a joint venture, SK Plug Hyverse, last year to proceed with the hydrogen business in Korea.

The investment plan was first announced on March 25 in Washington during President Yoon Suk Yeol’s weeklong state visit, with Industry Ministry Lee Chang-yang and SK Group Chairman Chey Tae-won in attendance.

BY SARAH CHEA [chea.sarah@joongang.co.kr]