Hyundai Mobis to Purchase Renewable Energy... Diversifying Energy Strategy

Hyundai Mobis will purchase renewable energy produced by specialized energy generation companies. This move follows the installation of solar power facilities at major domestic sites last year and aims to diversify its energy procurement strategy by directly acquiring renewable energy.

On the 15th, Hyundai Mobis announced that it had signed a contract with Hyundai Construction, an electricity trading intermediary, to supply 150 GWh of renewable energy. When converted based on the average annual electricity consumption of a four-person household, 150 GWh corresponds to the electricity usage of 42,000 households. Hyundai Mobis plans to sequentially introduce the secured renewable energy to its nationwide business sites starting this month.

Hyundai Mobis procures renewable energy through a Virtual Power Purchase Agreement (VPPA). Virtual power is one of the implementation methods for RE100. It is an indirect investment method to expand domestic renewable energy infrastructure.

First, Hyundai Mobis requests a specialized power generation company through the intermediary. The intermediary induces renewable energy production from available power generators according to the volume, and the renewable energy produced by the generators is recognized as the renewable energy usage of the ordering company under the supervision of regulatory authorities. The purpose is to revitalize the domestic renewable energy market through corporate investment.

At the current point, it is practically impossible for companies to fully cover their electricity needs with renewable energy. This is because the sites for installing solar power facilities are limited and require enormous funds. With this contract, Hyundai Mobis has secured renewable energy that can be used stably over a long period.

Hyundai Mobis installed a solar power generation facility at the Ulsan Electrification Plant last year.
Photo by Hyundai Mobis

Renewable energy is also expected to contribute to greenhouse gas reduction. When the renewable energy supplied to Hyundai Mobis is calculated in terms of carbon dioxide equivalent (CO2eq), it results in an annual reduction of approximately 3,000 tons of greenhouse gases.

Last year, Hyundai Mobis became the first company in the domestic automotive parts industry to join RE100 (a campaign to cover 100% of corporate electricity use with renewable energy). The transition to 100% renewable energy use is expected around 2040. To this end, large-scale solar power facilities were established at major domestic sites last year.

Hyundai Mobis’s renewable energy procurement strategy consists of two main approaches: direct investment such as building solar power facilities and indirect investment methods like virtual power. Additionally, it is pursuing various indirect investment methods to secure renewable energy, including purchasing Renewable Energy Certificates (REC) that certify renewable energy production and paying a green premium that adds renewable energy costs to electricity bills.

Meanwhile, Hyundai Mobis is also expanding its renewable energy transition for global business sites. It has achieved significant results in securing renewable energy by utilizing solar power in its India subsidiary and in Turkey and Slovakia in Europe. From next year, it plans to expand to North America and other business sites as well.

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