Hydrogen Industry and Association of KOREA

Korea Hydrogen Industry Association Junbom Kim

Korea Hydrogen Industry Association Ulsan : The Global City of Chemical and Automobile Industry

Techno Park Hydrogen Fuel Cell Vehicle Hyundidai Motors SK Petrochemical Hyundai Heavy Industries

Ulsan Mipo Hydrogen Production and National Industrial Complex Consumption Area

Onsan National Industrial Complex Househo ld Fuel Ce ll Demonstration Project

Hydrogen Fuel Cell Æ New Growth Engines of Ulsan

Korea Hydrogen Industry Association Optimization of Hydrogen Network in Ulsan Petrochemical Industrial Complex

Data collection Analysis and Inventories Report writing

1. Visit/Consult companies 1. Analysis of the data collected 1. Analysis of the data 2. Collect Basic data 2. Establish Material Balance collected 3. Integrate/ Present 3. Classify data and 2. Development study for Advisoryyp report make database fuel cells 4. Plan/Consult for 1. Progress and Final Report 3. Study on hydrogen-based Commercialization town planning

Expert Advisory Group

Council of Ulsan Petrochemical Compp,lex, Council of Onsan National Industrial Complex Superintendent, Council of Yongyeon Yongjam Superintendent, Council of foreign-invested enterppgrises in Ulsan Plant Manager, Roadmap for Ulsan Petrochemical Industry NCN HR Professional Career, Korea Gas Safety Corporation, Ulsan Fine Chemical Center

Korea Hydrogen Industry Association Target for Hydrogen Network Optimization

Hydrogen inventories in Ulsan industrial complex

1. Total Survey for company that has hydrogen production and discharge, consumption in industrial complex 2. Build inventory on the basis of survey

Optimum network business plan in industrial complex

1. Utilization of by-product hydrogen (PSA Tail-gas included) 2. Joint PSA use of low purity by-product hydrogen 3. Build optimum network and commercialization plan

Hyygdrogen fuel cell p ower su ppypply and residential area su ppyppply plan

1. Status analysis of the fuel cell power generation 2. Economic analysis for fuel cell power generation 3. Build residential area supply plan

Korea Hydrogen Industry Association Ulsan Petrochemical Complex

S-Oil, KPIC, Solvay, Isu Chemical, KPIC, Samsung BP Chem, Samsung Petrochemical, KOC, SDG, SPG Industries and Capro, KP Chemical, Kolon Industry, Korea LG Household & Health Care Alcohol Industrial and SKCEVONIK

KP Chemical, Hyosung, SKC, SK Chemical and SK Energy, Deoky ang, Dong deok, Korea PTG Samsung Fine Chem , Samyang Genex, Taekwang, BASF, Hansol chemical, Hanhwa Chem, Foosung, SK Lubricants Korea Hydrogen Industry Association Basic Data Survey of Hydrogen companies related

Used Used H Bypro Used Incin H Bypro Used Incin 2 in Purch 2 in Purc No Company produ duct in erati Sell Company produ duct in erati Sell Proc ase Proc hase ction H fuel on ction H fuel on 2 ess 2 ess

1 SK Energy O O OO OO 16 Dongdeok OO

2 KPIC OOO OO 17 SDG OO

3 Samsung BP Chem OO18 SPG OO

4 SFiChSamsung Fine Chem OOOO O 19 LG Health Care O O

5 Solvay OO 20 SKC OO

6 S-Oil OOO 21 SKCEVONIK OO

7 Isu Chemical O O O O O 22 SK Lubricants OO

8 Capro OOOO O 23 SK NJC OO Samsung 24 OO 9 KOC OOPetrochemical

10 KP Chemical OO O25 Samyygang Genex OO

11 Taekwang OOO OO 26 Korea PTG OO

12 Hanhwa Chem OOO O 27 Kolon Industry OO

13 Hyosung OOO O 28 BASF OO

14 Foosung OO 29 Korea Alcohol OO

15 Deokyang OO 30 Hansol Chemical OO Korea Hydrogen Industry Association Main Usage of Hydrogen

• Hydrodesulfurization, • RED reproduction, Hydrotreating • Modification of the hydrocarbon, Cyclohexane • Production of Ethyyyl amine, Synthetic alcohol manufacture • PX/MEX manufacture, PTA manufacture • Olefinic hydrocarbons→ Saturated • Remove acetophenone(ACP) hydrocarbons • RlfhdRemoval of hydrogen peroxid iddtiPOe products in PO • Acetylenic hydrocarbons→ Olefinic hydrocarbons • Production of hydrogen peroxide • Polymerization process-Adjusting the • CHDM (1,4-Cyclohexane Dimethanol) molecular weight of the polymer manufacture • Removing sulfur in raw naphtha material Hydrodesulfurization, Dewaxing of base oil • Production of Terephthalic acid (PTA) • The addition of unsaturated hydrocarbons • Production of Sorbitol, Martinique pool, poly (Di-olefin → Mono-olefin) glycidyltol • Caprolactam manufacture • PX/MEX manuftfacture, PTA manuftfacture • PdtiProduction o f THF, BDO • Adjusting the molecular weight of the polymer • Acetylenic, saturated of olefinic hydrocarbon) • Sorbitol manufacture, Saturation of • Production of PTHF unsaturated fatty acids

Korea Hydrogen Industry Association Overall Mass Balance of hydrogen (Ulsan)

Unit (Nm3 / hr)

Manufacture Hydrogen Purification 85.85% 648,470 (57%) (PSA Unit)

(1,113,360) Hydrogen Production Process (1,137,770) Byproduct Usage 489,300 (43%) Tail-Gas (976,810) (136,550)

(24,030) 14.12%

Fuel Usage (160,580) Byproduct Needed Hydrogen Hydrogen (380) 0.03% ¾ Insufficient amount of Hydrogen is acquired as Byproduct Hydrogen Flilaring (380)

Korea Hydrogen Industry Association The amount of hydrogen for Hydrogen fuel cell vehicles

1003 cm3 mol 2 g l Kg 273 K 1 Nm3 = = 0.0846 Kg 22.414 l mol 103 cm3 103 g 288 K

Produced Hydrogen by new process: 50,000 Nm3 / h

50,000 Nm3 0.0846 K g 24 h 330 day = 33,501,600 Kg / yr h Nm3 1 day yr ( ≈ 33,500 ton / yr )

The number of operative FCEV

33,501,600 Kg 355 Km 0.9 1 vehicle = 198,218 vehicles/yr yr 3.6 Kg (efficiency) 15,000 Km ( ≈ 200,000 vehi cl es/ yr )

Korea Hydrogen Industry Association Operating costs of Fuel cell vehicle (Tucson)

▷ 3.6 Kg Hydrogen → 320 Km driving

▷ 0.085 Kg/ Nm3 : 3.6 Kg hydrogen = 42.55 Nm3 hydrogen

▶ Cartridge hydrogen sales prices (Fuel cell vehicles) - $ 0.7 / Nm3 × 42.55 Nm3 = $ 29.8 : $ 9.3 for 100 Km - $ 080.8 / N m3 × 42.55 N m3 = $ 34.0 : $ 10.6 for 100 K m

▶ Pipeline hydrogen sales prices (Fuel cell vehicles) - $ 0.4 / Nm3 × 42.55 Nm3 = $ 17.0 : $ 5.3 for 100 Km

- The length of H2 pipeline in Ulsan is about 100 Km

▶ Gasoline sales prices (IC engine vehicles) - $ 191.9 /L × 32.0 L = $ 60.8 : $ 19.0 for 100 Km

Korea Hydrogen Industry Association Production and supply of Deokyang Hydrogen

Hydrogen Source each business site Distribution of Hydrogen purification

(LNG SMR) 40,000 Nm3/hr

About 104,000 Nm3/hr Ulsan (Chloro-Alkali) 12,000 Nm3/hr Refinery and Petrochemical Applications (PDH etc.) 12,000 Nm3/hr Pipe Line - Ulsan : SKE, Lotte Chemical, SKC Evonic etc. - Yeosu : GS Caltex, Kumho, LG etc. - Gunsan : OCI

(Chloro-Alkali) 32,500 Nm3/hr Yeosu Deokyang Ltd. (Naphtha 6,500 Nm3/hr Cracking etc.) 111,000 Nm3/hr About 7,000 Nm3/hr

3 Gunsan (Chloro-Alkali) 2,500 Nm /hr Semiconductor, glass industry, Tube Trailer metal heat treatment purposes - SliSamsung electronic, HiHynix, Hyundai hysco

(Naphtha Seosan 5,500 Nm3/hr Reforming etc.)

Korea Hydrogen Industry Association Overall Scheme of Domestic Hydrogen industry

Hydrogen Production Storage / Transportation Application

Pipe Line *Deokyang Pipe Line Steam Total length of 82 km Hydro Treating & Cracking Reforming (Ulsan / Yeosu / Seosan / Gunsan)

Daegu On Site Water H2 Station Hyygdrogen Electrolysis Fuel Cell Vehicle

Fuel Cell Chlor-Alkali Tank Lorr y Power (Liquid Phase) Generation

Chemical Tube Trailer Others (Deokyygang 200ea)

Korea Hydrogen Industry Association Hwaseong Fuel Cell PP 58.8MW MCFC

• Site : Hwaseong Balan Industrial Complex • Capacity : 58.8MW

• Annual Electricity Generation: 464 GWh (covers 70% of households)Installation site Company Operation Date Capacity (MW) • Annual Heat Output: 195, 000 Gcal (covers 20% of households) • Installation Area: 20,000 m2 1 Bundang KOSEP '06.11 0.25 2 Pohang POSCO '08.03 0.3 • Consortium: Posco Energy, Samchully, Korea Hydro & 3Nuclear Pohang Power POSCO (RPS ENERGY obligator) '08.08 2.4 4 Jeonju HS holdings '08.09 2.4 5 Gunsan Natura Power '08.09 2.4 6 Boryeong KOMIPO '08.09 0.3 7 Nowon SH Public Company '09.05 2.4 8 Yeosu MPC Yulchon power '09.10 4.8 9 Dangjin GS EPS '09. 10 242.4 10 Ilsan KEWP '09.10 2.4 11 Incheon POSCO ENERGY '09.11 2.4

12 Busan BYUCKSAN '10.05 1.2

13 Sangam SH Public Comppyany '10.09 2.4

14 Daegu TCS1 '10.09 5.6

15 Ilsan KEW '11.04 2.8

16 Daegu TCS1 '11.06 5.6

17 Saha BFC '11. 10 565.6

18 Yeosu MPC Yulchon power '12.01 5.6

19 Eunpyeong Seobuck Hospital '12.02 0.1 20 Kwangjin Children's Grand Park '12.02 0.1 21 Ilsan KEW '13. 03 282.8 22 Ulsan KEW '13.10 2.8

23 Hwasung Gyeonggi Green Energy '13.12 58.8 13 Total 115.85 Korea Hydrogen Industry Association Hydrogen Fuel Cell Power Generation

z LNG is supplied to reform and supply hydrogen to MCFC z There are few cases of large-scale power generation PEMFC

z Thermal balance and CO2 supply are optimized in system z Durability Problem of Platinum Poisoning by Low z Direct hydrogen MCFC is not developed yet Temperature Operation (High Purity Hydrogen needed)

Direct Hyygdrogen PEMFC for larg e-scale Power Generation is expected to increase 9 in near future, it is essential to develop catalyst and MEA Technology.

Korea Hydrogen Industry Association Policy of Power Generation

The fuel cell weight of 2.0, Assuming REC 50 won / kWh

Feed in Tariff Renewable Energy Electricity Electricity [FIT] Portfolio Standard [RPS] sales sales revenue 250.13won/kWh revenue 217.8won/kWh expected - Produced Electricity is purchased at - Pre-set of production amount. the price set by the government. - Market determines the price, Mechanism - The amount of electric power is due to the imposition of determined by the company. obligation amount.

Easy to achieve policy target by Supply Goals Variable target amount. assigned amount. Period PeriodPeriod Electricity sales revenue Power It is needed to purchase all of the Set target amount by electric Constant Variable Selection requested amount. source.

Germany, Spain, France, Denmark, United States, United Kingdom, Countries Solar etc. (34 countries) Canada (16 countries) Onshore wind - Reducing production costs by Offshore wind - The mid and long-term price promoting competition Small-scale hydropower guarantees maintain certainty of among providers. investment. Landfill gas Advantages - Financial burden of - Technology development and Bio gas government is reduced industrial growth due to stable Bio mass because t he p rice is attracti ng i nvest ment . determined by private sector. RDF Tidal - The government's huge financial - Overemphasized in specific For power generation burden. energy source. Fuel Disadvantages - Lack of incentives for lower - The infrastructure should be Cell production costs due to lack of essential for system For cogeneration competition between companies. introduction.

Competition within the Competition among the Renewable Energy Renewable Energies z Change from RPS to FIT to reduce Financial Burden of Government. z Expected to intensify competition among Renewable Energies. 9z RPS is adopted in 2012, and MW scale MCFC is installed by POSCO Energy. Korea Hydrogen Industry Association Economy of Large-scale Fuel Cell Power Generation

Economic Analysis

• Expenses : Annual maintenance cost of 900 Mwon, Water costs 1.5 Mwon, Labor costs 40 Mwon. Net present value is calculated with REC price and variable Comparison electricity prices ■ Industrial (unit : KWh/$) hydrogen price. ■ Residential (unit : KWh/$)

• Fue l ce ll power genera tion w ith curren t hy drogen pr ice has low economic value in 30~50 won/kWh REC price • Good economic value with Future Technology Development and the REC price based on Hydrogen Production Cost from 200 to 250 won / NM 3 (2012 REC 30~70 won / NM3) KOR JPN USA FRA GBR ITA KOR JPN USA FRA GBR ITA Comparison electricity prices overseas 16 Korea Hydrogen Industry Association History for preparing Hydrogen Association

Establishing Committee of Korea Hydrogen Industry Association

Operations Green hydrogen Compositing and operating of industry Research Group Aug. world's largest hydrogen town Aug. Nov.

2006 2009 2010 2011 2012 2013 2014

Feb. (’10.6~‘13.4) Feb. Dec.

Promoting fuel cell for Green technology Launching the world's first Hydrogen industry transportation practical cluster commercialization project mass production line of development seminar for implementation hydrogen fuel cell vehicles professionals using by-product gas Establishment of Hydrogen Association (Jan. 2014)

•President : Lee Chi Yun (CEO of Deokyang. Ltd)

•EtiExecutive Direc tor : Pack, Jong Hoon (Chairman of Green Hydrogen Industry Study Group), Kim, Jun Bom (Professor, University of Ulsan), Kim, Ki Cheol (Vice presiden t of DkDeokyang. Ltd), Cha, Jun Gi (Managing director of SDG), Woo, Hang Soo (Director of Ulsan Tech. Material Center)

•Founding Member s : Ulsan council, Deokyang, SDG, Ulsan Technopark, University of Ulsan, Hyundai Motors, Korea Research Institute of Chemical Technology, Around 100 Hydrogen Business Related Companies, Research Centers and Universities

*Role Survey of domestic hydrogen supply Propose Government policy and R&D Plan Study for Safety and Environmental Issues Hydrogen Quality Standard and Specification Convergence of Hydrogen Related Industries Build Future Plan for Hydrogen Economy Society

Korea Hydrogen Industry Association Hydrogen Fuel Cell Association Establishment

1. Background • Lack of research and development support specialized agencies and hydrogen related policies • The use of hyygdrogen in various fields (hyygdrogen fuel cell vehicles, fuel cell power generation etc.) • Request of specialized agencies for price and supply/demand control participated with Industry, Academia, Government, Local governments 2. Association establishment plan • Industry(for Supply and Demand), University and Research center(for Research and Development), Local governments (for Development of related regulations and Corporate participation) • The Research Association of Hydrogen Supply Utilization Technology (HySUT), Fukuoka Strategy Conference for Hydrogen Energy Benchmark • Organize association in hydrogen abundant areas → expand to other regions 3. Role of Association • Domestic hydrogen supply and demand Survey to make long-term counter plan • Support research and develo pment and government policies : Support lo gic develo pment for government, consulting for government and municipals, revision and promotion of hydrogen related law, suggestion of technology development and policy. • Planning to build hydrogen supply infrastructure : Development of management plan for hydrogen supply pipeline in domestic, efficiency improvement of hydrogen supply facilities, Demonstration ppjroject plannin g for h ydro gen town and fuel cell vehicles

4. Expected Effects • Stability of hydrogen price due to balancing supply and demand • Developing hydrogen policy and R&BD plan • Build up Hydrogen supply infrastructure for fuel cell electric vehicle • Improvement of investment efficiency by hydrogen pipeline management Korea Hydrogen Industry Association Members

Korea Hydrogen Industry Association Thank you for your attention!

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