[Let's Run Again 'Construction Korea'] Construction Leader SK, Fuel Cells & Offshore Wind Power as a 'Green New Deal' Pioneer

Emerging New Growth in Global Construction Industry
Joint Venture with Global Fuel Cell Manufacturer Bloom
Establishment of Solid Oxide Fuel Cell (SOFC) Factory

World's Highest Efficiency Equipment and Eco-Friendly Energy
Contract Signed Last September, Production Facility in Gumi, Gyeongbuk
Beyond Simple Production, Initiating Technology Localization

Collaboration with Over 130 Companies... Export Hub
Contract with No.1 US Data Center Operator

Entry into Floating Offshore Wind Power Business
Cooperation with 15 Domestic and International Design, Manufacturing, and Construction Firms
Securing Advanced Technology and Korean-Style Model

A panoramic view of Hwaseong Fuel Cell Power Plant in Jangan-myeon, Hwaseong-si, Gyeonggi, constructed by SK Engineering & Construction. (Provided by SK Engineering & Construction)

[Asia Economy Reporter Lee Chun-hee] 'Construction companies and fuel cells.' At first glance, this is a combination that does not easily connect. Because of this, SK Engineering & Construction's recent entry into the fuel cell business has attracted industry attention.

SK Engineering & Construction's active move into the fuel cell business is based on the judgment that the 'Green New Deal' is emerging as a new growth engine in the global construction industry.

In fact, U.S. President-elect Joe Biden emphasized during the election process that "the Green New Deal is an important framework to address the climate change we face." Newly appointed Minister of Land, Infrastructure and Transport Byeon Chang-heum also presented smart industries and energy transition as key tasks in his inaugural speech, stating, "We will transform the construction industry, which is concentrated in the construction field, into a high value-added industry encompassing construction project management (PM), business planning, engineering, and operation management to enhance competitiveness."

SK Engineering & Construction is actively pursuing new renewable energy businesses such as domestic production of fuel cells and offshore wind power to secure future new growth engines.

Starting Construction Transformation with Eco-friendly Fuel Cells

Bloom SK Fuel Cell Manufacturing Plant in Gumi-si, Gyeongbuk (Provided by SK Engineering & Construction)

Last October, SK Engineering & Construction held an opening ceremony for the BloomSK Fuel Cell manufacturing plant in Gumi City, Gyeongbuk Province. BloomSK Fuel Cell is a joint venture (JV) established in January this year by SK Engineering & Construction and the global fuel cell manufacturer Bloom Energy of the United States to produce solid oxide fuel cells (SOFC).

Through this, SK Engineering & Construction plans to produce eco-friendly fuel cells with world-class performance and achieve domestic production of SOFC.

In particular, SOFC is evaluated as the world's highest efficiency renewable distributed power generation facility that extracts hydrogen from liquefied natural gas (LNG) and reacts it with oxygen to generate electricity, with power generation efficiency far superior to existing fuel cells. It is recognized as an eco-friendly energy source with no white smoke or fine dust emissions, has a small installation area, and high safety. In the U.S., it is installed and operated in various locations such as large supermarkets in urban areas, the Morgan Stanley building in New York, and SoftBank buildings in Japan, as well as urban buildings and residential areas.

Under the vision of leading the global eco-friendly distributed power market, SK Engineering & Construction has long pursued the SOFC domestic production project. It took its first step into the fuel cell business in 2018 by signing an exclusive domestic supply contract for SOFC with Bloom Energy and has continued strategic cooperation with Bloom Energy to explore new business opportunities.

SK Engineering & Construction is attempting SOFC technology localization beyond simple production. In September last year, it reached an agreement with Bloom Energy on SOFC localization and signed a joint venture agreement (JVA), completing the establishment of the joint venture in January this year. In July, it completed the installation of production facilities at the Gumi manufacturing plant and started pilot production of SOFC. The production scale will start at 50 MW annually next year and gradually increase to 400 MW by 2027. Equipment is expected to be supplied starting with the fuel cell power plant scheduled to begin construction as early as January next year.

Aiming for the Global Market through Localization

Panoramic view of Paju Fuel Cell Power Plant in Wollong-myeon, Paju-si, Gyeonggi-do, constructed by SK Engineering & Construction (Provided by SK Engineering & Construction)

The domestic production of SOFC by BloomSK Fuel Cell is significant in that it localizes the world's highest specification fuel cells. SK Engineering & Construction quickly secured the top-tier fuel cell technology, which is difficult to develop in a short period, through the establishment of a joint venture with Bloom Energy, which leads in technology, and succeeded in starting localization.

Through this, SK Engineering & Construction plans to collaborate with over 130 domestic parts manufacturers to achieve excellent quality and price competitiveness, serving as an Asian forward base exporting domestically produced fuel cells equipped with top technology, while also acting as a bridgehead to help domestic SMEs export overseas. Additionally, through sequential workforce expansion, it is expected to create about 400 jobs, contributing to the economic revitalization of the Gumi region.

Practical results are also emerging. SK Engineering & Construction recently won the SOFC EPC (Engineering, Procurement, and Construction) contract from Equinix, the leading data center operator in the U.S. The project involves constructing a 6.4 MW SOFC at an Equinix-owned data center located in San Jose, California. Construction will start in April next year and enter commercial operation after eight months. Notably, SK Engineering & Construction will apply its self-developed SOFC multi-layer design technology called Power Tower in this project. This technology stacks SOFCs in multiple layers, enabling installation in limited spaces.

SK Engineering & Construction plans to use this project as a foothold to gain global recognition for its excellent design and construction capabilities and rich experience in the SOFC field, thereby expanding business opportunities in the U.S. market. It also plans to participate directly as a power producer, expanding its business area into eco-friendly distributed power generation.

SK Engineering & Construction, along with SK Advanced and Bloom Energy, is also promoting a pilot project using by-product hydrogen as fuel for fuel cells. This project verifies commercialization by using by-product hydrogen from the propylene production process at SK Advanced's Ulsan PDH plant as fuel for SOFC. Successful commercialization is expected to reduce operating costs.

To this end, the three companies plan to build SOFC for the pilot project at SK Advanced's Ulsan PDH plant by April next year and operate it for about one year to demonstrate commercialization. SK Engineering & Construction will handle EPC, SK Advanced will provide the site and supply by-product hydrogen, and Bloom Energy will manage SOFC operation.

Accelerating Renewable Energy Business

SK Engineering & Construction is actively diversifying its business not only in fuel cells but also in renewable energy fields such as offshore wind power. After entering the offshore wind power sector by obtaining a power generation permit for the Ulsan Southeast Coast offshore wind power project in 2018, it began full-scale business promotion this year. Currently, it is developing projects with capacities of 136 MW in Ulsan and 800 MW on the West Coast.

Furthermore, to strengthen competitiveness through cooperation, last October it signed a memorandum of understanding (MOU) for technology development and cooperation to promote floating offshore wind power projects with 15 domestic and international offshore wind design, manufacturing, and construction companies.

Floating offshore wind power is a method of generating electricity by floating wind turbines like buoys in the open sea. It is relatively free from site restrictions and has little concern about environmental destruction or infringement of fishing rights. It produces high-efficiency power by utilizing faster wind speeds than onshore or nearshore and contributes to regional economic revitalization and job creation through large-scale power complexes, as well as stabilizing domestic power supply.

The project involves design firms such as Dohwa Engineering, Yushin, and Gentek; major equipment manufacturers including Doosan Heavy Industries & Construction, LS Electric, Dongkuk S&C, Samkang M&T, Human Composite, Geonhwa Engineering, Sejin Heavy Industries; domestic construction specialists CGO, KT Submarine, Ocean CNI; and leading overseas construction companies Van Oord from the Netherlands and Jan De Nul from Belgium.

Through this, SK Engineering & Construction plans to actively discover business opportunities and establish a 'One Team Operation' system that moves as a single team from the early stages of the project through collaboration with participating companies. Based on this cooperation, it aims to secure advanced technology, especially core technology for floating bodies, which are key components of floating offshore wind power, enhancing global competitiveness and developing a Korean-style independent model.

This content was produced with the assistance of AI translation services.