SEOUL -- Orsted, a Danish power company involved in major offshore wind power projects in the world, selected POSCO as a crucial business partner for green hydrogen and offshore wind power businesses. The Danish company has promised to shape a competitive supply chain with local companies for a major offshore wind power complex to be built off South Korea's west coast.
POSCO, a leading steel group in South Korea said that it signed a memorandum of understanding with Orsted for comprehensive cooperation. Orsted will develop offshore wind power projects and establish green hydrogen facilities in South Korea. POSCO will participate in the production of green hydrogen and supply steel materials. Green hydrogen is produced from water using renewable power.
POSCO said that its construction subsidiary, POSCO E&C, would build offshore wind power structures, while POSCO Energy will be in charge of green hydrogen storage and hydrogen generation. The steel group would conduct research and feasibility studies.
POSCO's strategic planning division head Chun Joong-sun said the partnership would create "win-win synergy" through the combination of POSCO's business capabilities and Orsted's operational know-how in the green hydrogen sector. "Our green hydrogen business will gain further momentum through this cooperation with Orsted," he said in a statement on May 27.
Orsted unveiled a green energy project in November 2020 to establish an offshore wind power complex with a potential capacity of up to 1.6GW near Kurop Island off the coast of Incheon, a port city west of Seoul. The site has relatively shallow water depths to allow for cost-effective development. The project requires about eight trillion won ($7.15 billion).
Orsted aims to commission the project from 2026 that could provide clean energy to 1.4 million households and reduce carbon emissions by almost four million metric tons per year, making significant contributions to South Korea's green energy campaign to achieve net-zero emissions by 2050. LS Cable & Systems (C&S) secured a five-year deal to supply high voltage export cables to Orsted.
"POSCO selected hydrogen as a future growth engine and strives to find opportunities for green hydrogen business," Chun said. In February, the steel group forged a strategic alliance with South Korea's Hyundai auto group to develop green hydrogen manufacturing technology using ammonia. POSCO would develop technologies to extract large amounts of hydrogen from ammonia and supply green hydrogen produced overseas to power stations and industrial facilities.
POSCO has tied up with SK Engineering and Construction to develop a competitive floating structure for offshore wind power generation. A floating structure for offshore wind power generation must provide enough buoyance to support the weight of turbines.
In an effort to reduce the use of fossil fuel and nuclear power for electricity generation, South Korea is gradually switching to renewable energy sources. The Seoul government has endorsed a number of projects to build clean energy facilities, including solar power plants and wind farms, onshore and offshore.
In November 2020, SK Engineering and Construction joined an all-star business team involving domestic and foreign companies that would secure core technologies and develop a competitive model for floating offshore wind farm projects at home and abroad. Offshore wind farms consume less space compared to other renewable energy sources such as solar power plants and can survive extremely harsh environmental conditions.
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