Korea reduces hydrogen power generation costs, awards 52 contracts in bidding
Industry newsThe government’s hydrogen power competition bidding has resulted in a decrease in power generation costs for the third consecutive year, along with an increase in various small-scale distributed power facilities centered around the metropolitan area.
The Ministry of Trade, Industry and Energy announced the results of the 2025 general hydrogen power competition bidding on the 14th with the Korea Power Exchange. The Korea Power Exchange is the management agency for the hydrogen power bidding market.
The general hydrogen power bidding market refers to a system that purchases and supplies electricity produced using hydrogen or hydrogen compounds as fuel, in accordance with the “Act on the Promotion of the Hydrogen Economy and Hydrogen Safety Management.” It mainly targets distributed generation such as fuel cells and was established for the first time in 2023.
In this year’s bidding, a total of 3,137 GWh was offered, with 77 power plants participating. Following deliberations by an evaluation committee composed of external experts and the hydrogen power bidding market committee, a total of 1,355 GWh and 52 power plants were confirmed as final successful bidders. The competition ratio was 2.4:1.
The bidding results indicate that the effect of price reduction due to competition and the inducement of distributed power installations are continuing. The average successful bid price has decreased compared to the previous year, continuing a downward price trend since the introduction of the general hydrogen power bidding market in 2023.
All successful projects are small-scale facilities with a capacity of 20 MW or less, and 88% of the successful bid quantity (based on generation) is located in metropolitan and urban areas with high power demand, mainly selecting locally produced and consumed distributed power facilities. Additionally, it has been confirmed that the diversity of the successful power generation facilities has expanded (from 2 types to 5 types), indicating increased competition among power generation technologies.
The selected operators are expected to begin commercial operations in 2027 after a preparation period of about two years for related permits and facility construction. Detailed bidding results can be found on the Korea Power Exchange’s low-carbon central contract integrated platform website.