Danish renewables company Orsted and Korean conglomerate POSCO Group have signed a memorandum of understanding (MoU) to expand their relationship in offshore wind and renewable hydrogen projects. POSCO, the world's fourth largest steel producer, said that it will use its capabilities to support the development of Orsted's 1.6GW offshore wind projects off the coast of Incheon City.
South Korea has set an ambitious target of installing 12GW of offshore wind capacity by 2030. In September 2020, President Moon Jae-in unveiled his Green New Deal, which targets net zero emissions by 2050.
In December 2020, POSCO joined the Korean government in its decarbonization declaration, announcing its ambition to become a leading renewable hydrogen company and reaching carbon neutrality by 2050.
The company plans to get actively involved in the hydrogen supply chain from production to application while gradually transforming its production into hydrogen-based steel making. Under the MoU, Orsted and POSCO will conduct feasibility studies on potential collaboration on renewable hydrogen.
Orsted already has a well-established relationship with POSCO, which supplies over 100,000 tonnes of steel for Orsted's Hornsea 1 and three other offshore wind farms.
"POSCO has placed the hydrogen business as one of our growth engines for the group and is working to discover renewable hydrogen business opportunities," says POSCO Group senior executive vice president Jung-son Chon. "We hope to see our renewable hydrogen business pick up speed through this business collaboration with Orsted. Combining the operational knowhow of Orsted, a global company in the field of offshore wind and renewable hydrogen, with the business capabilities of POSCO Group, which includes construction and energy, both companies will be able to create synergies for a win-win collaboration."
Matthias Bausenwein, president of Orsted Asia-Pacific, adds: "With the Danish state as our majority owner, Orsted is committed to working with local partners and suppliers across the value chain to build a vibrant Korean offshore wind industry through our 1.6GW Incheon projects, and potentially more buildouts in other regions of the country. In addition to greening the electricity mix, offshore wind can become the feedstock for renewable hydrogen, which can help decarbonizing sectors that cannot be directly electrified such as transport and heavy industry."
Orsted opened an office in Seoul in 2018 and established the legal entity of Orsted Korea in 2019. In November 2020, Orsted announced plans to develop offshore wind projects with a potential capacity of up to 1.6GW, which will be located 70 kilometres off the coast of Incheon City. Subject to permits, off-take agreement, and final investment decision, the projects could be commissioned in 2026 or 2027.