SK E&S sets up joint venture with Plug Power to produce fuel cells and electrolysis facilities

By Lim Chang-won Posted : October 6, 2021, 17:51 Updated : October 6, 2021, 17:51

[Courtesy of SK E&S]

SEOUL -- SK E&S, an energy company affiliated with South Korea's third-largest SK Group, set up a joint venture with Plug Power, an American provider of hydrogen fuel cell turnkey solutions, to produce fuel cells and water electrolysis facilities. The joint venture underlines the group's efforts to create a hydrogen ecosystem in South Korea and secure its leadership in the Asian hydrogen market.

Water electrolysis is an important process to produce hydrogen. Due to high production costs, hydrogen companies are researching ways to advance water electrolysis technologies for producing green hydrogen more economically.

Under an agreement signed on October 6, SK E&S will own 51 percent of the joint venture and the remainder will be controlled by Plug Power. By 2024, the joint venture will build a research center and a factory that produce fuel cells and water electrolysis facilities. In January, SK Inc., an investment-oriented holding company of SK Group, made a $1.5 billion equity investment to acquire a 9.9 percent stake in Plug Power, which operates a hydrogen highway across North America.

By utilizing Plug Power's technology, the joint venture will significantly lower the unit price of water electrolysis facilities and polymer electrolyte membrane fuel cells ((PEMFCs) and supply them to domestic and Asian markets. PEMFC is a type of fuel cell being developed mainly for transport applications as well as for stationary and portable fuel-cell applications due to its high energy efficiency, simple structure and excellent durability.

Plug Power's water electrolysis technology is less influenced by the volatility of supply power than alkaline water electrolysis. Using Plug Power's know-how in operating and distributing liquefied hydrogen charging stations, the joint venture will distribute liquefied hydrogen to more than 100 charging stations in South Korea.

"The establishment of this joint venture is meaningful in that it has secured a bridgehead for entering the Asian market based on Plug Power's core hydrogen-related technologies," SK E&S CEO Choo Hyeong-wook said in a statement. "It will be a great competitive edge in building a hydrogen ecosystem."

SK Group promotes hydrogen as a new growth engine. The group has presented a goal to build a plant capable of producing 30,000 tons of liquefied hydrogen per year from 2023, with SK E&S producing 250,000 tons of blue hydrogen from 2025. In March, SK E&S earmarked $1.4 billion to develop gas fields in northern Australia and bring in 1.3 million tons of liquefied natural gas per year for 20 years from 2025.

Blue hydrogen is produced by applying carbon capture and storage to reduce CO2 emissions. Green hydrogen can be produced through electrolysis, a process of passing an electrical current through an electrolyzer to split water and release only hydrogen and oxygen.

SK Inc. has made a strategic investment in Monolith Materials, an American turquoise hydrogen company to beef up clean energy capabilities. The company regards turquoise hydrogen as a strategic alternative to an energy shift from blue hydrogen to green hydrogen because it can be produced with less power than green hydrogen.

Turquoise hydrogen that sits somewhat between blue and green hydrogen uses methane as a feedstock, but the process is driven by heat produced with electricity instead of fossil fuels. Methane pyrolysis produces hydrogen and a solid carbon material called "carbon black" that can even be used in other applications. Monolith has developed a process technology that converts natural gas into clean hydrogen and carbon black.
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