Korea Developing Infrastructure for Import of Green Hydrogen
The authors are analysts of NH Investment & Securities. They can be reached at ys.jung@nhqv.com. -- Ed.
Storage solutions
In general, physical and chemical solutions are adopted for hydrogen storage. The physical method is to store hydrogen physically as either gas or a liquid, while the chemical method uses compound materials as carriers of hydrogen. The latter method is known to be more convenient in terms of storage and transportation.
High pressure storage tanks under development
The key to physical solutions for hydrogen storage is to manufacture special high-pressure containers or tanks for storage of gaseous hydrogen. Hydrogen storage tanks are classified into four different types (Type 1~4), depending on the materials and pressure level. We note that Type 4 tanks refer to high-pressure tanks with carbon fiber-reinforced structures.
Liquefied hydrogen: Volume at 1/800 of gaseous hydrogen
Hydrogen in a liquid state is much smaller in volume (1/800) than gaseous hydrogen, and accordingly, liquid hydrogen is much easier to store and transport. That said, as hydrogen is liquefied by reducing its temperature to -253°C, storage of liquid hydrogen entails aboil-off loss issue. In addition, the liquefaction process is very costly at W1,000~1,500/kg, versus an electricity price of W100/kWh.
No Korean companies own proprietary liquefaction technologies
It is mostly US and European companies specialized in gas (e.g. Linde, Air Liquid, Air Product) that own proprietary technologies for hydrogen liquefaction. Such companies are currently running pilot hydrogen liquefaction plant and HRS sites. Due to the high technological entry barrier to the hydrogen liquefaction business, Korean companies are relying entirely on foreign companies for liquefaction plant technologies. We note that among Korean firms, KOGAS has plans to construct liquefaction plants in Changwon and Pyeongtaek, and the Hyosung-Linde JV and SK E&S have also announced plans for liquefaction plant construction in Korea.
Ammonia comes into spotlight
Chemical solutions for hydrogen storage are to use chemical compounds as carriers of hydrogen for easier storage and transportation. In general, ammonia and methylcyclohexane (MCH) are the two major hydrogen carriers. Using ammonia has strong advantages: 1) as ammonia is a material that is widely used for chemical processes, existing infrastructure can be utilized for hydrogen storage and transportation; and 2) ammonia can be converted into a liquid state at a temperature of -33°C. That said, we note that ammonia producing plants consume large amounts of energy and emit greenhouse gases.
Ammonia, a cheaper option for long-distance transportation
The International Energy Agency (IEA) refers to ammonia as an inexpensive storage and transportation solution compared to liquefied hydrogen and liquefied organic hydrogen carriers (LOHC), when it comes to hydrogen delivery via pipelines or vessels. YARA International, a leading ammonia manufacturer in Europe, and Engie, a French energy company, are developing green ammonia production process in Australia, a country abound with renewable energy sources. Meanwhile, Korea lags behind other countries in related technologies. We note that among Korean companies, Hyundai E&C has a track record of constructing ammonia plants.
Korea developing infrastructure for import of green hydrogen
As Korea lacks natural conditions for renewable energy sources, it will likely need to import green hydrogen from 2030. To this end, we expect the government to focus on developing hydrogen liquefaction technologies, constructing hydrogen carriers, and establishing hydrogen terminals at ports.