North Asia – It is all about Energy Transition – still

Energy transition will be a regular feature given that our resource-starved economies in North Asia need reliable partners and the goalposts keep shifting.

As many of you may have seen on social media, I joined the Port of Newcastle delegation last week to Seoul to progress discussions with government and corporates in market. It was a very fruitful exercise and reinforced why showing face in market can be an effective tool to beef up reputation and trust.

Current Australian Ambassador to Korea, HE Jeff Robinson quipped in our meeting that, “the Koreans spend as much on entertainment as Americans do on lawyers.” Suggesting that personal relationships are so important. They are.

Twiggy Forrest’s announcement that he was cooling his heels on green hydrogen may have sent shockwaves through the media, but the reality is that Japan & Korea have a combined target of 50 million tons of green hydrogen by 2050.

It is fair to say that the Korean reverse auctions remain colourless (no differentiation between green, blue and grey) which is more a reflection on not being able to secure enough of the commodity to do green only which is unfeasible given 98% of projects haven’t hit FID. SO blue and grey hydrogen in the short term is the necessary evil to ensure the industry can be built well in advance of green hydrogen coming on in larger quantities.

POSCO seems to be resigned to the fact that producing 7 million tons of hydrogen by itself by 2050 is unrealistic. It has a demonstration plant to produce 300,000 tons of green steel by 2034/5. This pilot demonstration plant is scheduled to open in 2027. POSCO is using a direct reduction process to make steel using its Hyrex technology.

Samsung C&T is holding its green hydrogen/ammonia cards to its chest until there is more clarity around green auctions from MOTIE. For now, they are investigating blue ammonia using LNG until clarity occurs.

KEPCO – I met with the Head of Nuclear at KEPCO who was the individual that costed the entire US$24.4bn 5,600MW APR1400 Barakah nuclear plant (BNPP) in UAE and the Koreans are very interested in nuclear in Australia. These projects lean heavily on localizing supply chains – especially cement, steel, pipes, cables and rebar. As a rule, the materials required would be around 4x that used in the Burj Khalifa building.

KEPCO said the latest CSIRO GenCost report overestimates its per kW cost on BNPP by c.35% and nuclear plants in Australia would be cheaper than the BNPP project, due to it being unnecessary to add the extensive mitigation measures required to combat the extreme desert temperatures and sandstorms in the Middle East.

The Koreans have had no cost overruns at BNPP as they have been building nuclear plants continuously since commissioning its first plant in 1971. APR1400 reactors have a 60-year design life with multiple 10-year expansion capability.

Here is the average price of generation in Korea according to the KPX.

Korea continues to add new nuclear plants to its domestic fleet because of the cheap baseload it provides. KEPCO is slated to build reactors in Poland, the Czech Republic and currently doing a feasibility study in Holland.

Whatever one’s position is on nuclear, if it comes to Australia, presumably many companies in the Hunter can partner and benefit from the enormous supply chain that will follow, and the Koreans will be scouting for capabilities well beforehand.

 

Visits to the Hunter

In early August, Hyundai Motor is due to visit Newcastle to look at hydrogen.

On August 22-23, Japan’s Ambassador Suzuki is due to go to the opening of Nihon University and to look at clean energy.

JETRO will be leading a 50 person delegation to the Hunter on September 9th. This will be interesting because it will include visitors from Japan HQs and the Tokyo Metro Government (discovered when I watched NSW beat QLD at the QLD Trade office in Tokyo)

Sydney Events

Grant Thornton is hosting an event in Sydney on 14 August (Wednesday) between 4:30pm and 6:30pm in Sydney to discuss legal frameworks in both Japan and Australia across a broad range of topics.

Register here – GT + M&P Roundtable | Registration Blank (vuturevx.com)