Installation of Hydrogen Charging Stations to Accelerate in Korea
Business Korea reported that following a recent change, South Korea’s Ministry of Environment will take sole responsibility for approving the installation of hydrogen charging stations. Also, approval will now be given for hydrogen charging stations for commercial vehicles. This change should reduce the licensing application/approval period required to build new stations. Efforts to reduce fuel purchase costs are also ongoing through the joint purchase of hydrogen. It is expected that the construction of hydrogen charging stations to accelerate in 2H21.
Under the control of the Ministry of Environment, 16 private hydrogen charging stations are to be built, 10 of which are to be operated by Kohygen, 2 by HyNet, and 1 each by Hyundai Steel, E1, GS Caltex, and Daedo HyGen. For reference, Hyosung Heavy Industries is the number-one domestic installer of hydrogen charging stations.
As of Jun 18, Korea had a total of 93 hydrogen charging stations, 23 of which were installed this year. The government aims to build an additional 87 stations by yearend, bringing the total to 180. Accordingly, we expect installations to accelerate in H2 of 2021.
Business of commercial hydrogen charging stations has only recently been launched. The two major operators of hydrogen charging stations in Korea are HyNet (established in Sep 2019) and Kohygen (Mar 2021, a specialized constructor & operator of hydrogen charging infrastructure for commercial vehicles, such as buses and trucks.
KOGAS, a domestic hydrogen distributor, conducted its first joint hydrogen purchase for 12 hydrogen charging stations in 1H21. The joint purchase of hydrogen should lower unit prices by about 11%. In 2H21, the firm hopes to start making joint purchases for around 60 stations. Reducing fuel purchase costs will be a key factor in lowering operating deficits at hydrogen charging stations. A decrease in fuel purchase costs through joint purchases should contribute to improving operating income and expanding the hydrogen station network going forward.