KEPCO Partners in World’s Largest Green Hydrogen Initiative
Industry news• Initial Phase of Western Green Energy Hub
The project's first phase will incorporate 6 GW of wind and solar power to produce green hydrogen. KEPCO, South Korea's largest utility company, has committed to funding the initial phase of what could become the world's largest renewable hydrogen facility, potentially scaling up to 50 GW of wind and solar power in southeastern Western Australia. This phase is expected to produce approximately 330,000 tons of green hydrogen annually, with an ultimate goal of reaching 3.5 million tons.
• Partnership with KEPCO
The collaboration with KEPCO, South Korea's largest energy firm, began in September of last year, following the signing of a memorandum of understanding. KEPCO is set to finalize a purchase agreement in the near future.
• South Korea's Hydrogen Strategy
South Korea plans to source a third of its energy from hydrogen by 2030. In January 2023, the South Korean government committed nearly $270 million to develop six hydrogen-focused cities.
• Project Stakeholders and Development
InterContinental Energy, a green hydrogen developer based in Singapore, holds nearly 50% of WGEH shares. The recent agreement pushes the project forward to feasibility studies for its first phase.
• Significance for Australia and Korea
Ray Macdonald, CEO of WGEH, highlighted the significance of Phase 1, saying it positions Australia as a leader in the global green hydrogen market while meeting the rising demand in South Korea.
• KEPCO's Key Contribution
Macdonald emphasized the importance of KEPCO's involvement, noting that the company's expertise in large-scale infrastructure projects and its extensive network would be crucial for the project's success.
• Focus on Engineering and Cost Analysis
The agreement with KEPCO encompasses project engineering, cost modeling for the first phase, collaboration with Korean and Australian companies, and identifying potential buyers.
• Ownership and Project Timeline
The $100 billion project is owned by Mirning Green Energy (10%), InterContinental Energy (46%), and CWP Global (44%). Construction is expected to take approximately 15 years, with initial production anticipated in the 2030s, pending a final investment decision in 2029.
• Regulatory and Market Challenges
Due to its timeline, WGEH will not qualify for South Korea's new clean hydrogen energy bidding market, which is open for a 15-year bidding process aimed at securing up to 6,500 GWh of electricity from hydrogen with a low carbon footprint. Hydrogen production must begin by 2028 for market eligibility.
• Support from Governments
The project’s feasibility studies have advanced significantly, partly due to Australian government support. WGEH has benefited from new incentives, including a $2 per kilogram renewable hydrogen production tax credit and a focus on renewable hydrogen in the broader $22.7 billion 'Future Made in Australia' initiative.