"Korea's Suspension of Hydrogen Power Bidding Seen as Opportunity to Advance Decarbonization"

There is analysis suggesting that Korea Power Exchange (KPX)'s suspension of the clean hydrogen power generation bidding process reveals the government's commitment to reducing fossil fuel use and increasing the proportion of renewable energy.

The Ministry of Climate, Energy and Environment announced on the 23rd that BloombergNEF, a research institute under Bloomberg, evaluated the recent move by the Korean government as "an opportunity to halt national support for high-cost technologies with low environmental value."

According to the energy industry, KPX announced on the 17th that it was canceling the 2025 competitive bidding for the clean hydrogen power generation market. The stated reason for the cancellation was "to replace it with a new announcement." The selected bidders for this round were originally expected to supply 3 terawatt-hours (TWh) of electricity annually for 15 years, starting from either 2029 or 2030.

BloombergNEF reported that although KPX did not specify the exact reason for the cancellation, the new bidding process will be decided in consultation with experts and the Hydrogen Economy Committee, which oversees the national hydrogen strategy. It also stated that a new bidding plan is expected to be announced by the end of the year.

BloombergNEF added that many domestic media outlets have analyzed this action as supporting President Lee Jaemyung's pledge to phase out all existing coal-fired power plants from the power system by 2040.

BloombergNEF also observed that the new bidding process, which will replace the canceled one, is likely to favor green hydrogen co-firing at natural gas power plants, or to set shorter contract periods to ensure all coal-fired power plants are closed by 2040.

BloombergNEF commented, "This new auction appears to be an opportunity for Korea to shift its policy direction and move toward a path more aligned with decarbonization." However, it also assessed that "clean hydrogen is costly, and for power generation, it is considered preferable to use it only as a supplementary means to cover seasonal fluctuations in renewable energy generation, rather than as a base load power source."

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