Hyundai E&C is expanding its scope of new business in the area of renewable energy power brokerage.
On October 13th, Hyundai E&C signed an agreement to start the ‘self-sufficient energy infrastructure construction and operation business’ of Namdong Industrial Complex in Incheon in earnest. Hyundai E&C (construction of power generation infrastructure), KT (construction of energy management system), YOUHOST (construction of high efficiency facility) and so forth will participate in a consortium with Incheon Technopark being the host organization, and as the comprehensive leader of the power generation infrastructure construction business, Hyundai E&C will be in charge of trading renewable energy power and construction and operation of the renewable energy power generation facility together with WonKwang S&T and JH Energy, a distinguished PV company in Incheon.
Self-sufficient energy infrastructure construction and operation business (hereinafter ‘self-sufficient energy business’) is a part of the project to promote smart green industrial complex under the leadership of Korea Industrial Complex Corporation with a goal of achieving digitization, carbon reduction and self-sufficient energy of the industrial complex, and the key areas include supporting RE100 of small and medium-sized enterprises, renewable energy conversion and carbon reduction of the industrial complex by constructing a renewable energy power plant and an integrated energy management system. Namdong Industrial Complex in Incheon was selected through public recruitment in April, and the operation business will start in earnest after the construction of the infrastructure is completed by 2025.
At the start of the year, Hyundai E&C entered into ‘renewable energy conversion cooperation agreement’ with an industry-academia-research group, ‘Incheon Mobility Alliance (formerly known as Namdong Smart Mobility Mini-cluster)’, led by automobile part companies residing in the Namdong Industrial Complex in Incheon, and cooperated in the implementation of the business involving the construction of the renewable energy facility and supply of electricity generated by renewable energy to review the actual methods of renewable energy being used by companies in the complex, consisting of small and medium-sized enterprises.
Self-sufficient energy business is one that is evaluated as the first accomplishment, and in this business, Hyundai E&C will adopt the ‘On-Site PPA’ trading method for the first time in the industrial complex. On-site PPA is a method where the power generator lease land or rooftop of companies (power consumer) that wish to use renewable energy and constructs renewable energy power generating facilities to operate with responsibility. Generated power is not linked to the power transmission grid of KEPCO and would be used entirely by the power consuming company.
Hyundai E&C is planning to generate eco-friendly power by constructing a 7.5㎿ PV power plant on the roof of the plant that was leased from companies residing in the Namdong Industrial Complex of Incheon, and is also planning to supply the generated power at an affordable price. Therefore, companies in the complex can not only lower the burden of the electricity cost but also satisfy RE100 by joining the renewable energy power generation business.
A relevant personnel of Hyundai E&C said, “Starting with self-sufficient energy business of the Namdong Industrial Complex in Incheon, we will expand the supply of renewable energy to small and medium-sized enterprises and key industrial complexes across the country, and we will continuously develop various business models and products that can lower the entry barrier of RE100,” and added, “We are planning to create an energy conversion market where the industry can cooperate to accompany the carbon neutrality journey, regardless of the size of the company”.
On one hand, Hyundai E&C recently entered into a 150Gwh Virtual Power Purchase Agreement (VPPA*) with Hyundai Mobis that will last until 2048. This corresponds to power that is used for 25 years by 42,000 households based on the annual average power usage by a family of four. Through this contract, Hyundai Mobis stably secured renewable energy that can be used for a long time and Hyundai E&C established a base to provide more diverse solutions and products to companies that commit to RE100. Hyundai E&C is planning to actively pursue carbon neutrality and eco-friendly management commitment of Hyundai Motor Group that joined RE100 by diversifying the renewable energy business portfolio including the power brokerage business in the future as well.
*VPPA: Virtual Power Purchase Agreement, an agreement that only trades Renewable Energy Certificate (REC) that is issued to renewable power generator. RE100 or carbon emission reduction can be recognized through this certificate.