SK Group to invest $1.5bn in hydrogen fuel cell company

Out-Law News | 13 Jan 2021 | 5:25 am | 1 min. read

South Korea’s SK Group has agreed to buy a 9.9% stake in US hydrogen fuel cell maker Plug Power for $1.5 billion.

The investment will make SK the largest shareholder in Plug Power. According to a statement, the companies will form a joint venture to provide hydrogen fuel cell products to South Korea and wider Asian markets.

The two companies intend to provide hydrogen fuel cell systems, hydrogen fuelling stations, and electrolyzers to the Korean and broader Asian markets.

Energy expert George Varma of Pinsent Masons, the firm behind Out-Law, said: “This is a sound investment, given South Korea’s hydrogen strategy. As the country, like many others, transitions from petrol to hydrogen powered vehicles, particularly in the commercial sector, the development of hydrogen fuel cell infrastructure is critical. This investment will take South Korea one step closer to achieving its ambitions to be a world leader in the deployment of hydrogen technology, particularly in the transport sector.”

SK Group in 2020 established a hydrogen business team consisting of 20 experts from SK Innovations, SK E&S and SK Engineering & Construction. The group plans to produce 30,000 tons of liquefied hydrogen each year from 2023 and secure 280,000 tons capacity by 2025 to manage an integrated value chain with an aim to nurture hydrogen as next-generation energy source.

In 2019, the South Korea government announced the Hydrogen Economy Roadmap through 2040 including over 5 million tons of hydrogen each year, 6.2mn fuel cell EVs, 1,200 refilling stations and 15 GW of fuel cell power generation. It was expected the cumulative economic value of its hydrogen economy to reach around $40bn by 2040.