GS Caltex shifting main focus to green energy

By Kang Seung-woo

GS Caltex, the nation’s second largest oil refiner, had a storybook year in 2010 after rolling up gaudy numbers in its balance sheet thanks to soaring crude prices. And it has stretched its stellar performance to this year with its best quarterly record in the first three months of 2011.

However, the company, the flagship unit of GS Group, is making efforts to accelerate the development of new growth engines in fuel cells, plasma-based waste recycling and thin-film batteries under the direct control of its Chairman Hur Dong-soo to stay in line with Seoul’s drive for low-carbon and green growth policy.

GS Caltex tallied 33.40 trillion won ($30.96 billion) in sales last year, up 71.1 percent from a year ago, while its operating profit and net income reached 1.46 trillion won and 716.1 billion won, respectively.

In the first quarter of this year, its sales posted a record 11.5 trillion won, with 827 billion won in operating profit and 618.3 billion won in net earnings.

GS Caltex, founded in 1967 as the first private oil company in Korea, began its fuel cell research more than two decades ago in preparation for the hydrogen era when such energy systems will call for near-zero carbon dioxide emissions.

Fuel cells, seen as an emission-free energy source, are a sustainable form of energy created through electrochemical processes between oxygen and hydrogen, which generates power efficiently without harmful pollutants.

GS FuelCell, the oil refiner’s subsidiary, has developed 1-kilowatt fuel cell systems for residences using natural gas and 5-kilowatt fuel cells combining heat and power. Both were successfully commercialized in 2010.

“The cells are sufficiently efficient compared to existing electricity and heat generators, and are good enough to meet the state target of expanding home fuel cells to 10,000 households by 2012,” said a GS FuelCell official.

GS Caltex, which has been delving into hydrogen, also introduced the country’s first hydrogen station in September 2007.

GS Caltex has also entered the promising energy-from-waste business on the strength of the cutting-edge plasma technology of GS Platech, another subsidiary. The sector is touted as one of the most viable renewable businesses.

According to the firm, the plasma technology can convert waste into energy using cost-efficient and eco-friendly methods by taking advantage of the characteristics of plasma.

“Traditional incinerators produce heavy metals and dioxins. With plasma, however, the amount of such toxic substances is reduced by 90 percent,” a GS Platech official said.

“In addition, the plasma format creates synthesis gases, which can be recycled to generate electricity.”

Another area that GS Caltex has been focusing on is rechargeable and thin-film batteries behind GS NanoTech. The batteries, which are seen as a next-generation cash cow for GS Caltex, are eco-friendly and less likely to explode.

Since its establishment in 2000, the company has stepped up efforts in research and development (R&D) to become the world’s top-tier player that specializes in manufacturing all-solid thin-film batteries and micro-array slides that are used in genetic disease research.

The manufacturer, the only entity for thin-film secondary batteries in Korea, has been preparing for mass production.