Wood Mackenzie predicts that onsite green hydrogen production cost in South Korea will halve by 2030.
South Korea has announced ambitious plans to become a hydrogen-based economy by 2050.
The government has plans for three hydrogen-powered cities by 2022 and to accelerate deployments of fuel cell vehicles (FCVs).
South Korea is currently the fifth-largest hydrogen market globally, with its demand expected to hit 4.44 million metric tons this year.
South Korea aims to expand hydrogen use across industry, heating and mobility sectors. The production of FCVs (including exports) will increase to 810,000 by 2022 and 6.2 million by 2040 from under 2,000 units today. The government plans to import hydrogen as well as produce it domestically.
Almost 86% of the demand comes from refineries for desulphurisation.
Wood Mackenzie research director Prakash Sharma said: “Cost is the biggest challenge today as green hydrogen costs 2-4 times more than fossil-fuel hydrogen. This is set to change by 2030. Net-zero emissions policies, falling renewables costs and strong business activity in electrolyser manufacturing and efficiency gains could deliver up to 50% cost decline for green hydrogen by 2030.
“This magnitude of cost reduction will require sub-$30 per megawatt-hour renewable electricity prices, large size electrolyser deployments and high load hours.
“The hydrogen journey for South Korea will not be a smooth sailing one. Continued investments in hydrogen infrastructure and policy support are needed to meet long-term goals.”