Ørsted plans to build up to 1.6GW of offshore wind capacity along the South Korean coast; POSCO has so far supplied 1,00,000 tonnes of steel to the energy company and plans to conduct feasibility studies on green hydrogen production
Danish energy giant Ørsted has entered into a Memorandum of Understanding with South Korean steel major, POSCO to support the development of offshore wind and renewable hydrogen production. Ørsted has planned multiple offshore wind projects off Incheon which lies at the northwestern coast of South Korea.
With the MoU, Ørsted is confident of building and operationalising up to 1.6GW of offshore wind energy in the region. The energy company has stated that these projects could be up and running by 2026-27. As with all major construction projects, this timeline is contingent upon conditions such as availability of permits, an off-take agreement and a conclusive green signal from principal investors.
The South Korean government has major plans to develop renewable energy capacity in the coming decade. With respect to offshore wind, the country wants to develop up to 12GW capacity by the end of this decade. The MoU also builds upon a pre-existing relationship between POSCO and Ørsted: so far, POSCO has supplied Ørsted with over 1,00,000 tonnes of steel.
In addition to the development of offshore wind, the collaboration also seeks to explore the feasibility of renewable hydrogen production and supply. This endeavor supports the overall corporate vision of both companies. Ørsted has invested in the production of hydrogen before, and POSCO Senior Executive Vice President, Jung-son Chon has stated that his company has been “working to discover renewable hydrogen business opportunities.”
Renewable hydrogen has gained incredible traction with energy companies, government, academia and the media in the past few years. It is currently one of the most promising methods to transition sectors such as heavy industry and transport towards higher sustainability and lower carbon footprint. One of its major criticisms has been its exceptionally high cost of production and distribution. However, a new report released by an Australian energy think tank has projected that in energy-intensive sectors such as transport, hydrogen produced using renewable sources of energy (also known as ‘green’ hydrogen) will achieve cost-effectiveness along with fuels such as natural gas as soon as 2030.