The Ministry of Trade, Industry and Energy (MOTIE) today (May 24) said operations awarded contracts under the schemes must start by 2028, with successful bidders allowed a three-year preparation period and a one-year grace period.

Available for 100% hydrogen-based electricity generation, ammonia co-firing with or hydrogen co-firing with natural gas, bidder will be selected on bid price of electricity produced as well as greenhouse gas (GHG) emissions from hydrogen production.

Companies will be able to bid using hydrogen produced with up to 4kg of CO2/kg of hydrogen.

MOTIE also revealed plans for a third auction for grey hydrogen power generation of up to 1,300GWh per year on 20-year contracts with operations set to kick off in 2026.

Following on its first round in March last year of 715GWh and a second in September for 650GWh, the government expects to select the winner bidders in August, taking price, power system impact and more into consideration.

South Korea has big plans for hydrogen and ammonia use in power generation. By 2027, the nation aims to generate 3,000-3,500GWh of power annually from clean hydrogen.

The nation looks set to rely heavily on export volumes of clean hydrogen to meet its demand. The Hydrogen Council estimated South Korea could be among the largest markets for clean hydrogen by 2050, requiring some 35 million tonnes.

Read more: Regional hydrogen supply and demand mismatch will force global trade links by 2050, report predicts

Companies in the country have already been looking to hydrogen and ammonia to clean up power plants. In 2022, SK E&S and SK Plug Hyverse said they would work with Korea Southeast Power Generation (KOEN) to establish green hydrogen and ammonia production technologies to see them used as feedstocks in fossil fuel power plants.

However, hydrogen’s use in power generation has faced wide criticism for being inefficient, expensive, and when using ammonia, potentially damaging to the environment.

When burned ammonia produces nitrogen oxide (NOx) – a greenhouse gas (GHG) almost 300 times more potent than (CO2).

But proponents of hydrogen in power generation say the pathway can help balance a high renewable energy-fed grid and prevent renewable curtailment during periods of high generation.

Javier Cavada, President and CEO of EMEA at Mitsubishi Power, previously told H2 View, “We can see hydrogen as one molecule that can complement other technologies in a way that has all the quality power generation that natural gas provides. Hydrogen can definitely take that role and replace the molecule.”