Electric Power, Energy Transition, Hydrogen

April 17, 2025

South Korea may issue new 3,000 GWh low-carbon hydrogen-to-power tender in 2025

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HIGHLIGHTS

Trade expects pathways to be broadened

Change in low-carbon H2 definition expected

Learnings from 6,500 GWh tender in 2024

South Korea may launch a new 3,000 GWh low-carbon hydrogen-based power tender in 2025, incorporating lessons from its undersubscribed first round last year that failed to get bidders at the right price, industry sources told Platts, a part of S&P Global Commodity Insights, on April 17.

The country's Clean Hydrogen Energy Portfolio Standards (CHPS) launched its first 6,500 GWh low-carbon hydrogen-to-power tender in May 2024 which awarded only 750 GWh to Korea Southern Power Co. in November 2024, showing bidders were averse to risks relating to forex and delivery.

"Last year, meeting the criteria for clean hydrogen was quite difficult. This year, while the quantitative requirements will likely remain unchanged, the eligible technologies or production pathways are expected to broaden," Dilshod Akbarov, project director at Intralink, an energy consultant told Platts.

According to Akbarov, who is also a member of Korea Hydrogen Industry Association, trade talk suggested hydrogen produced from waste gas or biogas may also be recognized as low-carbon hydrogen in the upcoming tender.

Korea Power Exchange launched a competitive bidding process in May 2024 for the low-carbon hydrogen power market which was expected to set the benchmark for electricity produced from hydrogen or its derivatives.

"The government is clearly trying to convey a signal to the industry that its support for clean hydrogen will persist," Vince Heo, research and analysis associate director at S&P Global Commodity Insights, said.

"However, the industry is scrambling to understand more details on how CHPS will be set this year, especially whether the government will share risks on forex indexation and take-or-pay clause."

Heo said the government put 3,000 GWh as a low-carbon hydrogen-to-power tender scheduled for 2025 in a decree a few years ago, which was the reason behind the market speculation.

Expected bidders

Akbarov expects bidders would look to source the low-carbon hydrogen locally, rather than import it if the new tender was to be successful.

The low-carbon hydrogen could be sourced from within South Korea, specifically from industrial complexes in the southern region, which will capture carbon and offer the fuel. This would emerge as South Korea's short-term solution to decarbonize.

"In the medium term, maybe in 4-5 years, it's going to be imported from Saudi Arabia, India, North America or Northern Europe, but not this year," he said. "And in the long term, South Korea is going to fully -- almost fully, import liquefied green hydrogen.

Among the revisions, he also expects the current definition of 'clean' hydrogen, to change. At present hydrogen is considered 'clean' if its production results in up to 4 kg of CO₂ emissions per 1 kg of hydrogen.

However, producers that emit significantly less CO₂ are also grouped into the same category. This "unfairness" highlighted the need to revise the definition which would eventually mean a better success rate for the bidding, Akbarov said.

Electricity generation share

The 2024-2038 Basic Plan for Power Supply mapped out by the Ministry of Trade, Industry and Energy (MOTIE) Feb. 21, specified that low-carbon hydrogen and ammonia will jointly account for 6.2% of the country's electricity production in 2038 after reaching 2.4% in 2030.

MOTIE officials on the condition of anonymity, said the country aims to produce 15.5 TWh of electricity from low-carbon hydrogen/ammonia in 2030, out of 642.6 TWh in total power production in the year.

The country also aims to produce 43.9 TWh of electricity from low-carbon hydrogen/ammonia in 2038, out of 704.5 TWh in total power production in the year, MOTIE officials said.

Data from S&P Global analytics estimates that, in an inflection scenario, South Korea will have a total hydrogen consumption of 2.6 million mt by 2030. Of this, 1.7 million mt will be used for industrial purposes, while 900,000 mt will be used for power generation.

Platts assessed Queensland hydrogen produced via alkaline electrolysis -- including capital expenditures -- at $4.53/kg on April 16, up 40.25% month over month.

Japan hydrogen produced via alkaline electrolysis -- including capital expenditures -- was assessed at $3.83/kg on April 17, down 33.85% month over month.


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