SK E&S, Establishes Joint Venture with US Plug Power... Full-Scale Entry into Asian Hydrogen Market

SK E&S Invests 51% Stake to Establish Joint Venture in Korea
Building Hydrogen Fuel Cells and Green Hydrogen Production Facilities

[Asia Economy Reporter Hwang Yoon-joo] SK E&S is teaming up with the leading U.S. hydrogen energy company Plug Power to actively enter the Asian hydrogen market.

On the 6th, SK E&S announced that it has signed a shareholder agreement to establish a joint venture with Plug Power aimed at jointly promoting hydrogen business in Asia. In the joint venture to be established, SK E&S will hold 51% of the shares, and Plug Power will hold 49%.

The joint venture plans to build a 'Giga Factory & R&D Center' in the metropolitan area by 2024, capable of mass-producing core hydrogen business equipment such as hydrogen fuel cells and water electrolysis facilities. Using Plug Power's technology, it aims to drastically reduce the unit cost of water electrolysis equipment and fuel cells produced there and supply them to the domestic and Asian markets. The water electrolysis equipment market in the Asia-Pacific region is currently at about 125MW but is expected to rapidly grow to 490GW by 2040.

The polymer electrolyte membrane fuel cells (PEMFC) produced at the Giga Factory & R&D Center have high energy efficiency, simple structure, excellent durability, and operate at low temperatures, making them rapidly expanding into various fields such as hydrogen vehicles and power plants. Unlike fuel cells using LNG or LPG as fuel, these directly inject hydrogen, producing only electricity, heat, and clean water, thus attracting attention as an eco-friendly power source.

Plug Power already boasts overwhelming competitiveness with a 95% market share in the U.S. hydrogen forklift market, exclusively supplying its hydrogen fuel cell forklifts to Amazon and Walmart. The joint venture plans to enter not only the domestic but also the Asian hydrogen fuel cell market based on this proven technology.

Additionally, it will lead the commercialization of green hydrogen by producing water electrolysis equipment domestically and utilizing it. Water electrolysis equipment produces hydrogen by electrolyzing natural water, generating no environmental pollutants such as carbon dioxide (CO2) during hydrogen production, making it a key future eco-friendly hydrogen production technology.

In particular, Plug Power's water electrolysis technology (PEM method) has the advantage of being less affected by fluctuations in the power supply input during electrolysis compared to the conventional alkaline electrolysis method, thus best complementing the intermittency of renewable energy.

The joint venture will also be responsible for distributing liquefied hydrogen produced by SK E&S to about 100 refueling stations nationwide. Plug Power already operates 120 liquefied hydrogen refueling stations across the U.S. and has accumulated distribution know-how using liquefied hydrogen tankers. Through the joint venture, SK E&S plans to stably expand the nascent domestic liquefied hydrogen distribution market.

At a media day held last month, SK E&S presented a vision to leap to become the 'global No.1 hydrogen operator' by leveraging the infrastructure and value chain integration capabilities of its existing LNG business. It plans to increase hydrogen production capacity to 280,000 tons annually by 2025, including 30,000 tons of liquefied hydrogen and 250,000 tons of blue hydrogen (50,000 tons liquefied, 200,000 tons gaseous).

President Choo Hyung-wook said at the event, "The establishment of this joint venture is significant as it secures a foothold for entering the Asian market based on Plug Power's core hydrogen-related technologies," adding, "Green hydrogen production using water electrolysis technology will be a great competitive advantage for SK E&S in building a hydrogen ecosystem."

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