AFC Energy plc – the industrial fuel cell power company and member of the Scottish Hydrogen Fuel Cell Association (SHFCA) – has signed an agreement in principle for a 5-megawatt fuel cell power system with a South Korian hydrogen supplier, Chang Shin Chemical Co.
This is the first commercial agreement signed by the AFC Energy in South Korea, one of the world’s fastest growing markets for large scale, stationary fuel cell power generating systems. AFC and Chang Shin will now work towards finalising a definitive contract within six months.
South Korea is one of the key target markets for hydrogen fuel cells which are being adopted rapidly by industry and utilities to reduce reliance on imported fossil fuels. Whilst the country is poor in natural resources, it has an abundance of available hydrogen and syngas that is produced as a by-product by its large chemicals industry. In addition, demand is also being driven by South Korea’s comprehensive incentive regime to boost the use of clean energy from fuel cells by large-scale producers and users of electricity.
Under the proposed deal, AFC will harness hydrogen produced at Chang Shin’s chemical works to generate clean energy with zero carbon emissions. The power will then be delivered into the South Korean electricity grid, thereby enabling Chang Shin to diversify its revenue stream and achieve greater value from its hydrogen.
In line with AFC’s strategy, the deal will be structured as an energy supply contract under which it will install and operate its low cost fuel cell systems at Chang Shin’s sites in return for long term fees.
The agreement will be implemented in stages, the first of which will be a pilot KORE fuel cell unit at one of Chang Shin’s gas processing facilities. Following evaluation from both AFC Energy and Chang Shin the intention is for the pilot unit to be scaled up to systems with an envisaged capacity of between 1 MW and 5MW. Importantly, Chang Shin estimates it has total available hydrogen for power generation significantly in excess of 5MW.
Ian Williamson, Chief Executive, AFC Energy, said: “This agreement is the first step towards a potentially major long term collaboration with Chang Shin. We have made this important breakthrough into South Korea just as this country’s demand for fuel cell systems is set for strong growth. We look forward to working with Chang Shin and expect to clinch further new business in this market in the near future.”