Korea opens world's first hydrogen power bidding market

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Korea opens world's first hydrogen power bidding market

Published: 09 Jun. 2023, 16:19 Updated: 11 Jun. 2023, 16:56

Hydrogen fuel cells installed at SK Energy's charging station in Geumcheon District, southern Seoul [SK ENERGY]

Korea opened the world’s first hydrogen power bidding market with new bids of 650 gigawatt-hours.

The Ministry of Trade, Industry and Energy on Friday published a tender notice for hydrogen power, as the government set up a bidding market where power producers can sell electricity generated with hydrogen or hydrogen compounds such as ammonia to Korea Electric Power Corp. (Kepco), the state-run power distributor, or other regional operators.

It is the first of its kind in the world.

In Korea, power generation companies sell the electricity they produced to Kepco through the Korea Power Exchange. As prices of the electricity set in the market are coupled with fuel prices, renewables such as solar and wind power — which are not subject to fuel price fluctuations — are not traded in the traditional energy bid market under the Korea Power Exchange.

Instead, renewables and hydrogen power have been traded in renewable energy certificates under the Renewable Energy Portfolio Standard, or the RPS system.

However, a new system was needed for hydrogen power because hydrogen power generators burn fuels, namely hydrogen and hydrogen compounds, unlike renewables, according to the Energy Ministry.

Moreover, as only electricity produced from hydrogen fuel cells had been subject to the previous trading system, the government aims to reflect newly adopted power generation technologies such as hydrogen turbines in the bidding system.

A bidding round will open twice a year, with a total bidding volume of 1,300 gigawatt-hours annually. The first round opened on Friday, with 650 gigawatt-hours — 50 percent of this year’s total bidding volume — up for bidding.

The winner of the bid will be announced in August.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]