Korea drops 100MW hydrogen fuel cell project in Yeongam
The South Korean government has withdrawn a 100 megawatt (MW) hydrogen fuel cell power plant project planned for the Daebul National Industrial Complex in Yeongam, South Jeolla Province.
According to industry sources on Sunday, the Ministry of Trade, Industry, and Energy recently announced the cancellation of the renewable energy power generation project at Daebul Complex.
The project aimed to generate electricity through an electrochemical reaction of hydrogen and oxygen after hydrogen was produced from LNG.
The estimated cost of the project was 610.8 billion won ($414 million), with construction initially set to begin in November of last year and completion targeted for December next year.
The project was led by Korea Midland Power Co. and Doosan Heavy Industries & Construction, currently Doosan Enerbility Co.
Korea Midland Power was responsible for purchasing renewable energy certificates (RECs) and operating the power plant, while Doosan was tasked with developing hydrogen turbines, supplying fuel cell equipment, and overseeing engineering, procurement, and construction (EPC).
Jcenergy Co., a renewable energy company based in Yeongam, was to handle permits and provide the project site.
An official from Yeongam County, said :
To our understanding, financial issues arose with the project’s key stakeholders,
“While discussions with local governments progressed, including agreements on profit-sharing, the project ultimately saw no progress.”
Both Korea Midland Power and Doosan confirmed that despite signing a memorandum of understanding (MOU) with Jcenergy, the project ultimately fell apart.
The hydrogen fuel cell power plant boom gained momentum under the previous administration’s push for renewable energy policies and nuclear phase-out, but has faced setbacks under the current government.
Several projects, including the 100 MW project for Songdo, Incheon, planned by Korea Gas Corp. (KOGAS) and Korea Hydro & Nuclear Power Co., were also cancelled.
Launched in 2021, the Songdo project was opposed by residents and was put on hold by the Ministry’s Electricity Review Committee in December 2022. Developers later abandoned the project due to difficulties in securing permits amid local opposition.
Other projects, including those in Daejeon’s Pyeongchon Industrial Complex and Sinnam-ri, Yeoju, Gyeonggi Province, were also withdrawn due to challenges in economic viability or overcoming local resistance.
Another setback contributing to the cancellation is the sharp rise in liquefied natural gas (LNG) prices, according to the energy sector.
The price of natural gas supplied by KOGAS to fuel cell power companies increased from 8.35 won per megajoule (MJ) at the end of 2020 to 29.9 won per MJ in October 2022.
As of December this year, the price remains more than twice as high as in 2020, at 19.4 won per MJ.
An industry insider, said :
Many fuel cell power plants struggle to turn a profit,
“Their profitability depends on LNG prices, and the recent price hikes have led many state-run power companies to withdraw from such projects.”
Government policy changes have also played a significant role.
Under the Renewable Portfolio Standard (RPS), power generation companies were required to secure RECs, which fueled investments in fuel cells. However, the introduction of the Clean Hydrogen Portfolio Standard (CHPS) last year shifted fuel cells under this new system, requiring projects to go through bidding processes.
This shift has limited demand for renewable energy, creating additional challenges for the sector.
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Korea drops 100MW hydrogen fuel cell project in Yeongam, source
