SK Group to invest $1.5 billion in Plug Power to develop hydrogen business
SK Group, a major South Korean conglomerate will invest $1.5 billion in Plug Power, a US fuel cell maker, for around 10% share, to develop hydrogen energy industry in Asia. As a part of the deal, both companies will form a joint venture company in South Korea to supply hydrogen fuel cell products to Asian markets, including China. The JV will serve the market with hydrogen fuel cell systems, fuelling stations, and electrolysers.
The market has responded positively to the news. Shares of both companies jumped in their respective markets. The parent company SK Holdings shares rose ~7% in Korea on Thursday morning, while Plug Power’s stock climbed 20% in the US.
SK Group has been moving away from high carbon industries to electric vehicles and renewable energy. The group has started reviewing the potential opportunities in the hydrogen business. It plans to produce 30,000 tonnes of blue hydrogen by 2023 annually and add 250,000 tonnes production capacity between 2023 and 2025. The company plans to move towards green hydrogen in the long run by using solar and wind power.
The company investment policy is in line with the Korean government hydrogen economy roadmap. The government roadmap set an ambitious long term plan to produce 5 million tonnes of annual hydrogen production, 6 million fuel cell vehicles on roads, 1,200 hydrogen refilling stations and 15 GW of fuel cell power generation. All these developments will make the hydrogen economy worth $40 billion by 2040.