SK E&S launches hydrogen and new renewable energy businesses

With 1.4 trillion won in funding, SK E&S officially launches its hydrogen and new renewable energy businesses.

The first step of the “green portfolio conversion based on fundamental competitiveness” that CEO Hyeong-wook Choo stated in his New Year’s address at the beginning of the year has been assessed as having been taken in earnest.

Bond issuance and the sale of real estate holdings are expected to generate 1.4 trillion won for SK E&S. The monies collected are intended to be used for initiatives connected to innovative and renewable energy sources as well as for securing blue hydrogen manufacturing facilities classified as future food projects.

In order to do this, SK E&S will twice issue redeemable convertible preferred shares (RCPS) totaling 735 billion won, one in October of last year and the other this month. The company being targeted is global private equity fund manager KKR (Kolberg Kravis Roberts). Of the money raised, 525 billion won is used to pay off debt, and 70 billion won is utilized for operating expenses.

Prior to this, it sold a Daewoo E&C consortium its office building in Namcheon-dong, Busan, which was owned by Busan City Gas, a subsidiary of Busan City Gas, for 632.8 billion won last month. A wholly owned subsidiary of SK E&S is Busan City Gas.

The primary initiatives for SK E&S this year include projects involving hydrogen and new renewable energy, which will be funded through bond issues and real estate sales.

To enter the hydrogen industry, SK E&S teamed up with Plug Power, a US hydrogen energy business, in January of last year. First, SK E&S would spend 40.7 billion won in SK Plug Highbus, a division of the company. SK Plug Highbus, a joint venture between SK E&S and Plug Power, an international hydrogen company, plans to construct a hydrogen facility production and research facility called the “Giga Factory” in Incheon within the year and manufacture products for hydrogen fuel cells and water electrolysis equipment.

By increasing its capacity to supply 280,000 tons of hydrogen annually, including 30,000 tones of liquefied hydrogen and 250,000 tons of blue hydrogen through SK Plug Highbus by 2025, SK E&S intends to assume the lead in the hydrogen market. SK E&S also intends to aggressively participate in the new and renewable energy industry. It intends to invest 93.2 billion won in its subsidiary to achieve this.

A joint venture between Jeonnam Offshore Wind Power and CIP, a Danish energy infrastructure investment management organization, was founded in 2020. In Jaeun-myeon, Sinan-gun, Jeollanam-do, a 99MW (megawatt) fixed offshore wind power complex is now being constructed.

The Blue Hydrogen Project, which utilises the energy produced when LNG is evaporated at – 162°C for hydrogen reforming and carbon dioxide/hydrogen liquefaction procedures, was also unveiled by SK E&S. With an expenditure of 5 trillion won, the blue hydrogen project employing LNG cold heat, which is promoted in conjunction with Korea Midland Power, can create 250,000 tons of blue hydrogen yearly.

The massive Bluesoso project, which SK E&S has been promoting this year, has attracted a lot of interest from related businesses. “We want to increase profitability while pushing full-scale growth focused on hydrogen and new renewable energy,” an SK E&S official stated.