South Korea has moved another step closer to industrial-scale hydrogen power generation with the commercial launch of Ulsan Hydrogen Power No. 2, a 20 MW hydrogen fuel cell plant developed by Lotte SK Enerroot.
Commissioned in June 2025, the plant is the country’s largest hydrogen-only model of its kind and is expected to supply 160 GWh of electricity annually—enough to power 40,000 four-person households.
Strategically located on the grounds of Lotte Chemical’s Ulsan site, the project exemplifies the emerging trend of colocating hydrogen power assets within existing petrochemical and industrial infrastructure. It draws byproduct hydrogen from SK Gas subsidiaries and Lotte Chemical affiliates, offering a stable, long-term fuel supply chain without the need for costly hydrogen purification or transport infrastructure in the early phases.
Ulsan Hydrogen Power No. 2 is the first commercial-scale output from South Korea’s general hydrogen power generation bidding market, a new mechanism launched in early 2023 to stimulate hydrogen-based electricity generation. Following its selection in the first bidding round, the project broke ground in March 2024 and secured project financing of KRW 77.2 billion (approximately USD 56 million) just two months later.
The use of a public bidding system marks a shift toward market-driven hydrogen deployment in South Korea, offering a potential framework for scaling up similar projects. It also aligns with broader government ambitions to build out 15 GW of hydrogen-powered electricity capacity by 2040, with fuel cell systems playing a critical role alongside combustion-based hydrogen turbines.
Unlike dual-fuel or transitional systems, the Ulsan facility operates on a hydrogen-only configuration from day one—eliminating the need for fossil fuel backup and producing zero carbon emissions during operation. Its modular design allows for a future switch to clean hydrogen—such as that generated via electrolysis—without retrofitting.
In addition to emissions-free operation, the plant also captures and reuses waste heat from the fuel cell stacks to generate additional electricity, increasing overall energy efficiency. This integration of heat recovery into hydrogen fuel cell operations is increasingly seen as a necessary feature to improve capacity factors and project economics.
The Ulsan plant is the first of four hydrogen fuel cell power stations that Lotte SK Enerroot plans to bring online by November 2026. Collectively, these units will total 80 MW, forming the largest single portfolio of hydrogen fuel cell projects in Korea. While still modest compared to coal or LNG baseload plants, the modular expansion approach is designed to validate operational performance and grid integration at scale before broader deployment.
Yoon Byeong-seok, President of SK Gas, framed the plant’s operation as “the first tangible achievement” toward Korea’s hydrogen economy goals, adding that the project represents a key milestone in developing commercial-scale hydrogen fuel cell generation.
Meanwhile, Lotte Chemical’s CEO, Lee Young-jun, emphasized the importance of vertical integration, stating the company aims to “enhance core competencies across the entire process from hydrogen production to distribution, utilisation, and technology development.”
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