[INTERVIEW] SK Gas CEO urges gradual shift to renewable energy

Industry

Published: 22 Nov. 2023, 19:12 Updated: 23 Nov. 2023, 09:24

[INTERVIEW] SK Gas CEO urges gradual shift to renewable energy

SK Gas CEO Yoon Byung-suk, who talked about the company’s necessary expansion into the hydrogen energy business in an interview with the Joongang Ilbo on Friday. [KIM JONG-HO]

The electric vehicle (EV) market's rapid growth may make it seem like humanity is close to an age of green energy. But much of the world is still reliant on nonrenewable sources of power.

35.4 percent of the world’s electricity is currently powered by coal, according to the London-based Energy Institute, while only 14.5 percent is produced through renewable energy sources, such as solar, wind, hydrogen and fuel cell energy. The reason for this is simple: The market has not found a renewable source that is both stable and reasonably priced.

“We must, however, still dream,” said SK Gas CEO Yoon Byung-suk on Friday, referring to the “net zero” goal of reducing greenhouse gas emissions and ensuring that ongoing emissions are balanced by removals. Korea has pledged to reach net zero emissions by 2050 in line with the Paris Climate Agreement, which aims to limit global warming to no more than 1.5 degrees Celsius.

Yoon started his career at Yukong, currently SK Innovation, in 1991. This year marks his 33rd year working at an energy company.

“If we only complain about how it’s not happening now, nothing will have changed after five years,” said the CEO. “If we make attempts with what is currently possible, step-by-step, change will surely come.”

The following is the transcript of CEO Yoon’s interview with the JoongAng Ilbo along with additional explanations, translated by Korea JoongAng Daily staff. Questions and responses have been edited for clarity and brevity.

Q. Why is the transition toward environmentally friendly energy sources still lagging?

A. The transition won’t go quicker by being in a hurry. Unlike coal and oil, renewable energy sources lack economic advantages as well as convenience. Hastening too fast will bring about aversion. The transition should be made using feasible technology at an adequate pace.

SK Gas is the leading supplier of liquefied petroleum gas (LPG) in Korea. Butane gas, which is sold in canisters and used in restaurants all over Korea, and propane gas, which is used as fuel for vehicles and boilers, are both LPGs. LPGs are relatively more environmentally friendly than coal and oil, as they emit fewer pollutants, but they are nevertheless a fossil fuel produced in the oil refining process similarly to liquefied natural gas (LNG). This is the reason SK Gas is ultimately moving toward becoming a hydrogen energy business.

Why is hydrogen energy on the rise?

Hydrogen is all around us. One kilogram (2.2 pounds) of hydrogen combined with oxygen produces 35,000 kilocalories of energy — almost three times the amount that gasoline emits. No carbon dioxide is emitted at all, and the amount of energy lost when transported through pipelines or tanks is very small.

What are the technology's current limits?

The problem is that hydrogen, like water (H2O), exists in a compound state. The chemical compound needs to be separated to be stored and transported in a liquid state. We are also lacking in some technologies. For instance, water electrolysis technologies that separate hydrogen by electrolyzing water, technologies to build storage and charging equipment that can withstand compression under high pressure and technologies that insulate against heat after liquefaction — the transformation of gas into its liquid state — in extremely cold temperatures.

The Korea Energy Terminal in north Ulsan, pictured, which is a port terminal for LNG exports and imports, is expected to commence operations in the second half of 2024. [SK GAS]

CEO Yoon’s conceived route toward hydrogen energy is as follows: The business is first expanding with the low-carbon energy LNG. Then, it plans to transition its portfolio from ammonia to hydrogen. To achieve this, SK Gas has invested around three trillion won into the construction of the Ulsan Gas Power Solution, the world’s first LNG and LPG dual-fuel power plant, and the Korea Energy Terminal, the largest private port terminal for LNG exports and imports, in Ulsan. Commercial operations are expected to begin in the second half of 2024.

What is the relationship between hydrogen, LNG, and ammonia?

Korea is the world's third largest consumer of electricity after the United States and Japan. Until we reach the ultimate goal of clean energy, we must fill in the gap with low-carbon LNG. Ammonia (NH3) is the best “carrier” for the storage and transportation of hydrogen. This is because the compound is made up of hydrogen but does not contain carbon. Around 200 million tons of ammonia are already being produced for purposes including its use as fertilizer, and transportation infrastructure for it exists. Furthermore, burning conventional fuels such as coal and LNG mixed with ammonia reduces carbon emissions, which may become a starting point for clean energy. And in the chemical decomposition process, hydrogen technologies may also advance.

In the age of hydrogen, will we able to achieve energy independence?

The future is not in Korea, but in Australia or the United States. This is because truly “green” hydrogen needs to use renewable energy even in the electrolysis process, which can be more effectively produced in the United States or Australia, as they have the more advantageous environment for solar and wind power. These regions must be invested in lowering hydrogen's production costs.

Is it still hard to take the lead in the energy sector, even in the era of the hydrogen economy?

The liquefaction, transportation and usage of hydrogen are all new technologies. Korea can earn money from this. That is why it is important to get ahead in the ammonia era and develop related technologies. Korea’s abilities in shipbuilding and operating power plants are also world class.

What is the government’s role in the process?

An energy transition requires investment into infrastructure, not to mention the difficulty of its quick success. If companies are to bear the costs of conducting tests and demonstrations with domestic and foreign companies, government support will be needed, to a certain extent, in the name of fostering new industries.

″It is important to get ahead in the ammonia era and develop related technologies [to hydrogen energy],” said SK Gas CEO Yoon Byung-suk in an interview with the Joongang Ilbo on Friday. [KIM JONG-HO]

“Our strengths lie in energy transportation, not energy invention,” said CEO Yoon. I want [the company] to be in charge of the flow of energy by being prepared for a new technology, importing it at low costs, conveying it domestically and then re-exporting it.”

To this end, SK Gas plans to build an energy complex in Ulsan that allows for the production and supply of hydrogen and has also left a site for its ammonia and hydrogen businesses at the LNG Terminal.

Lotte SK Eneroot, a joint venture established between Lotte Chemical, SK Gas and Air Liquide Korea, will build a hydrogen fuel cell power plant in Lotte Chemical’s Ulsan factory, which will operate for 20 years.

“As environmental regulations such as carbon taxes become stricter worldwide, Korea’s industrial competitiveness will weaken if it cannot utilize the most economic and environmentally friendly energy solution,” said Yoon. “I wish to serve with a sense of duty and as a fueling factor in reaching net zero.”

BY LEE SO-AH, KIM JU-YEON [kim.juyeon2@joongang.co.kr]