On Thursday, the Innovation Center Denmark released a report titled, Outlook on Hydrogen Economy and Roadmap.
To discuss the report, its implications and the growing partnership between Korea and Denmark in the hydrogen economy, Alex Jensen is joined by Harry Oh Country Representative of Bloom Energy in Korea, Lars Kruse Director, Markets and Projects APAC for COWI, Dilshod Akbarov, Project Manager Energy and Environment Sector at Intralink and Bae Sungyou, Innovation Officer at Innovation Center Denmark Seoul.
The discussion dives deep into the status and near future of the hydrogen economy and how Korean and Denmark are well situated to synergize by dovetailing on each other’s strengths and challenges. Denmark is well situated in terms of upstream hydrogen elements such as gather electricity from offshore windfarms and use that energy to generate green hydrogen.
Korea on the other hand, is well placed in terms of applications and downstream solutions. Companies such as SK, GS, and POSCO are continuing to invest in hydrogen. Hyundai has committed 11.4 trillion won to its hydrogen-based business.
No one doubts that the moving to a hydrogen-based economy is not challenging, as Harry Oh from Bloom Energy says, “The devil as always in in the details when it comes to delivering innovation. Although it would be nice if Korean companies could do anything, that’s just not realistic. Hydrogen is a team sport.”
The conversation then moved to the increasing need for and speed of development in the sector. Many countries such as Demark are at or remarkably close to 100% renewable for the energy sources, while Korea in this respect lags. But as the global price of offshore wind power continues to fall, Korea has an excellent opportunity to put its fast follower skills into practice.
As these kinds of cross-border partnerships continue to develop, Koreans can look forward to a future not only of greener mobility, but also greener energy and manufacturing sectors. All key to achieving net zero by 2050.
Today’s episode was brought to you by the Innovation Center Denmark, at the Danish Embassy in Seoul.
A successful niche player in the cutthroat world of delivery apps
Lars, Sungyou Bae, Everyone, Bae sungyou, Alex Jenson, Dilshod, Harry
Alex Jenson 00:08
You’re listening to Koreabizcast with the KBLA. I’m your host Alex Jensen, and it’s Friday February 25. We’re repeatedly hearing about South Korea’s interests in harnessing the hydrogen economy. Previously, we’ve connected with guests on this very subject on cooperation with other parts of the world in fact, and on that note, today, we shift our focus to Denmark, which may have a major role to play in the clean energy space, including where Korea is concerned with Intralink who’s Korea Managing Director we heard from earlier this week, Innovation Center Denmark is today presenting a report titled Outlook on Hydrogen Economy and Roadmap. So that makes it pretty clear what we’re going to be talking about. We’ve got several guests on the line today for a virtual roundtable. We have tech advisor from this particular location Innovation Center, Denmark that I just mentioned, we have last crews, Business Development Director for the hydrogen transition from Danish consulting company, COWI, Harry Oh, CEO of Bloom Energy Korea, and Dilshod Akbarov, co author of this report that I just mentioned, and a hydrogen expert at Intralink, all of you, thank you so much for taking the time out of your day to speak with us. This is actually all happening on Friday, we’re recording ahead of time, just to make that perfectly clear. But this is something that you’re all involved with. And congratulations.
Thank you. Thank you.
Alex Jenson 01:37
If I can start with Sungyou Bae, you are a tech advisor, as I just mentioned it Innovation Center Denmark. And this is a big moment for everybody there in presenting how Denmark can work with Korea, how Danish entities can also get involved. Can you just introduce for us the background to this report? Why you asked Intralink to get involved? And where you hope it leads from here?
Sungyou Bae 02:01
Yes, of course. Thank you for hosting this podcast. Um, well, basically Innovation Center Denmark, in Korea, in Korea, we’re helping Danish companies to do business expand business in in Korea. And I know that Denmark is a front runner in green technology, especially offshore wind power, and power to x. And I thought we thought there is a great potential to if we work together Denmark and Korea, we can fully cover the full value chain of green hydrogen society, economy. And there will be so many opportunities for both of us to fill up this market.
Alex Jenson 02:50
So this is what we’re looking forward to discussing then in more detail, including I think just how hydrogen generally is looking today. It’s been something of a pipe dream. For many years, people have said it’s an exciting space, but maybe not practical, too expensive. Various different issues to solve along the way. But definitely in the last couple of years, I’ve noticed there’s been something like a momentum shift. Maybe I can bring you in straightaway Dilshod from Intralink because you co authored this report. What’s your view on the state of the hydrogen market today? globally?
Globally? Okay. Thank you. For your question. So first of all, the hydrogen, as you know, hydrogen enthusiasm, I would say was, it’s not nothing new here. I mean, hydrogen has been around for for many, many decades. But the enthusiasm has certainly come back to many developed countries, particularly to Korea and current status in Korea in the world. Well, they’re all about hydrogen produced about 70 million tons per year in the world, but most of that hydrogen is used in ammonia production and renewable energy in sorry, oil refinery, etc. But now what we’re looking at hydrogen as a as a solution to for you know, decarbonizing the mobility, power generation, and how to abate sectors like steel and cement manufacturing. So, the real kind of kind of change that we’re seeing the hydrogen these days is that phenomenal, dynamic change of hydrogen application from the conventional applications to renewable energy as a renewable energy solution. In this particular space and the world’s mean, European countries, in particular, Denmark, as Sungyou just mentioned, very strong in terms of the upstream hydrogen sector. Well, the countries are in East Asia, in particular, Korea is very strong in terms of the hydrogen applications and in in general media and downstream hydrogen solutions. So that’s where we are in terms of the hydrogen economy. And I’m looking forward to elaborate further on the hydrogen kind of society that’s being built in Korea.
Alex Jenson 05:22
Yeah, definitely want to revisit that in a moment. Let’s get a bit more on the Danish side for a moment, Lars, can you tell us how Denmark has come to be viewed with such respect in the hydrogen sector?
Yeah, that’s a nice question. Thank you for that. Despite Denmark is relatively small country with five, 6 million people, this has been a journey also, over decades and it but what happened was, in fact, in the 17, oil crisis hit worldwide was particularly also dinner was hit very hard. And that moment of time, it started. This wave has been released in a way it is optimizing wave of using energy and resources. So this is nearly 56 years ago, and hold that, that start of getting freezing, avoiding freezing freezing houses and reducing the energy consumption is the base from this green Denmark and the success of Denmark now worldwide, trying to help and promote solution that fit for example, Korea. So indeed, from the 70s already besotted also the industrialization of the the wind turbines, and at a certain point of time, we had 18 to 20 manufacturers of wind turbines, and they have now been consolidated through all these decades. And in parallel with that, there was an interlink of between the Scandinavian countries where we have undersea cables. So at the states we are today Denmark, we can produce green electricity is day and night from the wind turbines, we have surplus of electricity up to 120 30%. We send this off to Norway, they save their water in the dams and during the days of the weeks after we can get them the electricity back from Norway into Denmark. So so the scheme is today that we have in some of the European countries, particularly also in Denmark, we have a surplus of electricity, that we can directly feed into the cars into the mobility. So just been mentioned here by the other guests, we now come to a big game changer now where where we see what we call the PTS the power to x is hydrogen, how can we come a step further, using this surplus of electricity into into other transport sectors into trucks into into flights, aeroplanes into the maritime sector, and also how to get the heavy industry has just been mentioned here by my colleague, how to get that heavy industry even even greener by using hydrogen electricity into manufacturing of this. And in that sense, the connection between Denmark and Korea is an exceptional opportunity for both countries to improve the world around us and the chains upwards and downwards.
Alex Jenson 08:31
If we can also welcome you into the conversation Harry, CEO of Bloom Energy Korea, can you identify for us at what point Korea started to take hydrogen so seriously, and and why perhaps you view H2 as we might refer to it as such an important solution for this country?
Well, first of all, thanks for inviting me to this wonderful event. I really appreciate the opportunity to participate. I think hydrogen as everyone else has been around for a while and I think Korea as a small nation without a lot of natural resources, have forever been looking for different ways to substantiate their energy needs and power needs. I think has has the the the latest development of Korea being the first country to actually enact a law to kickstart the hydrogen economy. And I think that’s sort of embedded in Korean culture is to be a forefront and very early adopters of different technologies and different options for their needs in Korea. So I think it’s very natural for Korea to be in the forefront and I think the hydrogen, there are a few things we have to keep in mind. I mean, we can’t really do this alone. I think there has to be a rate constituents are participating in this hydrogen economy. And it’s obviously will take a lot of collaboration and the demonstration projects, and hence the to result in a very disruptive technology and to swap the product for Korea and beyond. So I think the there is a huge potential here. But as as everyone realizes, all the devils in the details, and everyone, I think has to work together to come up with a optimized solution that fits Korea and their fits everyone else around the globe.
Alex Jenson 10:41
Well, speaking of working together, Dilshod, if we come back to you on this global cooperation aspect, wouldn’t in an ideal world Korea, produce its own hydrogen, use its own hydrogen and have a kind of circular economy of hydrogen without having to go outside of its own borders. And obviously, the answer is no, because otherwise they’d already be doing it. But can you better explain for us why Korea would be cooperating with a Northern European country on this?
Yeah, Alex, if Korea could do everything alone, that would be great. But then it’s so but as Harry mentioned, you know, I think hydrogen should be treated as a team sport. So they should be a team game here. And everybody must have their own kind of roles and responsibilities to deliver the hydrogen economy to reality. And in that sense, I think Korea and particularly the Korean government understands the fact that Korea has its own kind of land constraints, Korea has its own kind of technological challenges to address some parts of the hydrogen economy, such as the production of large scale hydrogen, so scaling up hydrogen is currently quite a big challenge that the Korean society is facing. And if you allow me to bring up the recent report made by Bloomberg, Korea along with Japan would be able to commercially produce or even import green hydrogen as late as 2030. So this is a this is the latest among the OECD countries. And the reason for that, you know, there are challenges in terms of the land constraints, as I mentioned, and due to the land constraints, the capex per megawatts, renewable energy Installation is pretty high in Korea, in particular the solar area is, is quite challenging in Korea in order to get for example, get permissions and bring the price down to the point where the green hydrogen can be scaled up and used commercially. And although there are all such challenges in the country, there are opportunities Korea has very high potential for offshore wind. And as we know Denmark is an absolute champion in terms of the wind power. And I see this in the in the recent activities being taken by Korean conglomerates, such as Posco and as we saw in their recent MOU signed between Posco and Danish offshore specialists or stir to develop 1.6 gigawatts hydrogen and offshore wind complex in Inchon, so these kind of cooperation between countries would definitely open the way forward to the better, well connected hydrogen economy, I would say.
Alex Jenson 13:47
Also with you Lars, I wanted to come back to this question of actually securing hydrogen, it’s all around us. It’s a key component of the universe of the air that we live in. So I mean, we don’t want to go into too much depth with the technology. But there there is the so called dirtier forms of hydrogen which require fossil fuels just to produce the hydrogen that we might use for energy, but then there’s the green hydrogen that we’ve heard referred to during the course of this interview. Can you just briefly explain for us how realistic it is for hydrogen to meet so many of our needs as a green source of energy without being counterproductive and ending up causing more pollution in its production?
Yeah, truly, it is nice at all on that on the way over here because in 2000, made the space in Stockholm where we talked about integrating fuel sales in trains, trains in Germany, and at that point of time, okay, isolated on the on this particular train, you can see there was energy saving, but if at that point of time the hydrogen was coming from fossil fuels, so it doesn’t, doesn’t Given meaning so shall we, I mean it, it’s a game changer coming now we are in a transition period as is mentioned here before, the technology is not up to full scale yet what is coming there there are manufacturing units coming up in in the Nordic countries, maybe in UK as well. And this is a benefit for Korea because we can get the first learnings from Europe anaemic and integrated. I see for Korea transition period, I see the need maybe over the next or the first I’d say five to eight years ago all the electricity we will produce on the wind offshore is going to be used electricity that we cannot transfer this into power to x yet. And in that window we can benefit from the learnings we get from other countries including Denmark and Norway to see how do we transfer this directly into hydrogen ammonia methanol or whatever. So So later on when when we have eliminated some of the fossil fuels electricity production in Korea we can indeed take the next step and is fully right we have to be cautious here that is really green the right way there is no reason to transfer from fossil fuel into hydrogen into the on so but what what what things are there the intention in Korea here the innovation is here the younger population also demands that the Korean manufacturers of any kind of product or cars inclusive will make green cars they say electrical cars but it’s also that the manufacturing units is also green. So all that is perusing the whole system in the right direction. And as a any other technologies we know for computers from solar phone forming turbine forever. It takes time to mature. But things are going so fast today and people are so clever investor that is going to happen.
Alex Jenson 17:09
Harry, here in Korea, we already have quite advanced hydrogen fuel cells in vehicles, although it’s a fairly small part of the mobility market and electric vehicles seem to have burst so far ahead that I don’t know. Is it more realistic that hydrogen would have applications elsewhere in the power picture in Korea? What’s your view on on where Korea most needs hydrogen in the next 10 years?
I think it’s probably within the mobility sector. And then also secondary market is in the power generation, because so many countries along with Korea is really focusing on becoming a carbon neutral nation by 2050. So you can’t really do it alone and mobility sector, will you have to also look at the hydrogen application in power generation sector. Look, you know, whether we we have firm belief that the hydrogen economy will be a success or not, I think we can just look at our track record in the past 10 years or less than 10 years. I mean, 10, less than 10 years ago, I mean, who thought about wind and solar being the significant portion of a power generation portfolio in any country. You know, for instance, Brazil has around 10% of renewable energy in the UK, I think is around 25% when the wind and solar and the other countries are right behind those marks, and then the cost of all these, at least on the offshore sector. And correct me if I’m wrong, I think we’ve we’ve seen around 60% reduction in the cost of installing offshore wind, wind power generation. So I think we have a pretty good track record leaving everyone in the room and everyone else around the world has a very good track record of beating the odds and for hydrogen economy, at least I think we can have a little bit of comfort in knowing that everyone has a very good track record of finding very innovative technology and and commercializing it to a level where it’s very affordable by everyone in the world.
Alex Jenson 19:36
That affordability question is so important, isn’t it Dilshod in this conversation? Based on your reports? What’s your view on on what I was just asking Harry about the practicality of implementing hydrogen in Korea and where the demand would be most realistically met in the foreseeable future?
Yeah, I absolutely agree with hurry but one way One thing that I would like to amplify further is power generation sector. Korea already accounts for more than 38% of the entire world’s utility scale fuel sales. And the reason why Korea has rolled out so much utility scale fuel cells is because Korea has a manufacturing economy. And in order to decarbonize such a massive manufacturing based economy, you would need a stable supply of electricity. And a stable supply of electricity with the current solution such as solar and wind is not always possible due to their energy intermittency. So this is the very reason why I say and Korean government and the Korean private sector, public sectors, they all know this, that the future of Korea, especially with Korea’s pledge to achieve a net zero by 2050, would perhaps be possible with a massive rollout of the further massive rollout of fuel cell with a power generation applications.
Alex Jenson 21:08
I wanted to stay with you for a moment to show and talk about some of the risks. We are about to see an election take place in Korea, and with a new government can come a new energy policy, that might be a risk. What do you think about that in in terms of factoring in possible downsides, and maybe anything else that you’d like to address?
Okay, that’s a very good question. Alex, actually, we work at Intralink with, with a lot of companies in the US and in Europe. And we tend to get such questions a lot, whether the elections would effect on the hydrogen economy, and how it’s going to look like in the next, you know, three, four years from now. But I want to say something that hydrogen has already reached to the level of no return in Korea. So there is no way that any kind of new government or any a new kind of political party would be able to reverse it back. So I think regardless, whoever comes to whoever wins the elections, upcoming elections, I think hydrogen will continue to be the major focus of Korea’s decarbonisation agenda. And I think companies like Hyundai or Posco or Samsung, GS, these conglomerates are already working on solutions that can bring so much value not only to the decarbonisation of the Korean manufacturing based economy, but also expertise to export these two abroad. And in this sense, I think, both political parties in Korea, they understand the value here, and they were willing to continue on betting big on hydrogen
Alex Jenson 22:56
Lars, let’s talk about what needs to happen from a business standpoint, both within the industry and from an investment perspective. We do already know, I think, as Dilshod was just suggesting that there are some huge industry players in Korea, who seem to be committing to hydrogen, either already or planning to do so. So that in itself is a sign that it will survive one administration to the next that presidential office level. But what’s your view on what’s required? From a money standpoint?
I honestly I think I don’t think the money is a problem anymore in this sector, because it’s proven now the solar wind is much cheaper than any other way of producing electricity. And the even even the last two years, we will call with his kidney shake to the market and everybody is now aiming to go green, and they have the objective to was 2050 or even before. And we saw yesterday through a green grocer, the Heinz, also arranged by the Danish embassy and the Korean Embassy, did they there that there is a lot of info of capital in this direction here. So financing these kinds of projects today is not an issue. So that being said, getting a project in construction is still a parcel of a 10 major puzzle pieces that need to bring together this this is in terms of is it the developers the financing, are we just discussing the regulatory framework and also integrating the local communities affected by construction, these kinds of projects around Korea. But this is the kind of learning we have been through in many, many other countries, including Brazil, as you were just mentioned there with the first nearshore projects. We have similar fishermen’s discussions as we all also have in Korea. So So all the parameters are in place and, and the need and the industry is screaming for the solution, then there is a time schedule, as I mentioned before, where things but will what will happen first saw the need for electricity and then the hydrogen, maybe as a second phase. So, already Sunday, all players is there on the table, demand is there, the regulatory framework is also in place, some minor adjustments here and there. But this is this is learning that the big players entering into this market that they can adapt to. So, I don’t see the big, the big hurdles. Honestly, it is it. And the nice thing is that we can Rican really do it fast here, what has maybe taken 20 years and other markets we can maybe do over the next five to eight years or 10 years here, so we can reduce the transition time in Korea.
Alex Jenson 26:06
And Bloom Energy’s mission, it says on the official website is to make clean, reliable energy affordable for everyone in the world. We’re interested in Korea’s corner there Harry, are there any particular messages that you’d like to share with us in terms of what needs to happen from an investment perspective to make this successful transition?
I think as with solar and wind and fuel cells, I think even for green hydrogen, we can’t really follow ourselves. In conducting business without government support, I think he will really accelerate the, you know, green hydrogen economy, I think you’re going to be needing a lot of support from government. And of course, the end game is to achieve the subsea free market for green hydrogen economy. So I think that’s the kind of message I want to bring in Bloom Energy is just one piece of the solution. And one piece of the puzzle, I think, as I said before, it’s gonna take a lot of co work, co creation, and a lot of demonstration projects, to to have some viable and commercially viable, disruptive technology for.
Alex Jenson 27:22
I’d like to come to you to finish Dilshod to see if there’s anything particularly from that report. And I know that it’s going to be quite long. So you can hardly cover all the bases now. But is there anything else that we haven’t touched on, that you would like to leave us with or two other rises? Summarize what you think would be the most important takeaway here?
Well, yes, Alex, I think as we are now as the last point, we’re talking about the financial kind of side of the hydrogen projects, I would like to say just one point here, whether hydrogen projects are bankable or not these days, for example, in order to finance a hydrogen project, whether the project financing is possible or not, is a key question. Okay. And these days, the hydrogen projects are mostly being financed depending on which project you look at mostly being financed by equity financing, but where we should aim at is the ultimately the project financing that is backed by a proven technology and a stable customer base. So this is where we need to lead the market forwards, especially the solutions that for example, blue energy offers such as SFC Solutions, and I’m already we already see that you know, in a power generation sector, hydrogen fuel cell projects are already bankable, and they are being project financed by banks, because of the strong PPA that three placed between the power generators and the utility companies. So we need to achieve the same kind of trends with other spaces such as hydrogen generation, hydrogen refueling stations, etc. So for now, we actually don’t see such I mean, we are not there yet. With regards to the hydrogen production and hydrogen fueling station spaces.
Alex Jenson 29:22
Thank you very much. Dilshod, Dilshod Akbarov, co author of this report that’s being presented today in hydrogen expert Intralink, also Harry Oh, CEO Bloom Energy Korea, Thank you. And last crews, speaking to us from Danish consulting company Cowi. I hope my pronunciation is not too far off there. But thank you. I’d like to offer you based on you tech advisor at Innovation Center Denmark, some closing remarks for us. Have you got anything particularly that you want to add beyond the the guests that we’ve heard from or anything related to this presentation, because I know it is going to be made available online, isn’t it?
Bae sungyou 30:05
Yes. right. Um, so along with this podcasts, as you mentioned before, we are presenting this report on Outlook on Hydrogen Economy and Roadmap today, and this is actually a part of Korea, Denmark green hydrogen Alliance roundtable, which is kicking off today. And while the report is all about introducing, showing what the Korean hydrogen industry looks like, and what are the opportunities in general, the alliance, the discussion in alliance is going to be more concrete focus on how two countries Denmark and Korea can collaborate on producing green and green hydrogen from biogas and renewable energy, and how you’re going to connect these solutions to maritime. So this alliance also with also with presenting this report is going to be a good starting point for both of the country to stimulate collaboration around technology, R&D, government, to government collaboration, and etc.
Alex Jenson 31:30
I’m dreaming of a hydrogen future where the emissions are made of water and our fine dust pollution is seriously minimized. Thank you so much. It’s been wonderful connecting with you as well, Bae sungyou. Good luck with the event. And I want to say thank you to Innovation Center Denmark for making today’s episode possible. As ever, we’re available on LinkedIn if you search KBLA and you want to get in touch if you want to perhaps connect with any of the people you’ve heard from today or otherwise pose a question. You can also email email@example.com and we’ll be back Monday.