SK spurs net-zero transition with power purchase agreement

SK's headquarter in central Seoul / Yonhap

SK Group plans to accelerate its efforts to achieve carbon neutrality by signing the country's largest direct Power Purchase Agreement (PPA), the group announced Friday.

According to the conglomerate, SK Group's nine affiliates, including SK telecom, SK siltron, SK broadband and SK bioscience, recently signed a memorandum of understanding for direct PPAs with SK E&S to acquire renewable energy.

A direct PPA deal between a generator and a private-party purchaser of electricity is considered an effective way to realize corporate net-zero commitments, as companies can directly purchase and use electricity produced from renewable sources, contributing significantly to the expansion of renewable energy and the reduction of greenhouse gas emissions.

"SK E&S was selected as the provider of the electricity, primarily based on its competitive pricing and supply stability, among multiple participants in the bidding process," SK Group stated.

The nine subsidiaries of SK Group will receive renewable energy generated from SK E&S's solar power plants from 2026 for 20 years. The total amount of the contracted electricity is 537 gigawatt-hours annually, making it the largest-scale renewable energy supply agreement in Korea. The amount is equivalent to the combined consumption of around 190,000 households in a year.

As a result, SK Group will be reducing a cumulative total of 5 million tons of greenhouse gas emissions through the agreements, according to the company.

Since the conglomerate set ESG principles as the core value of the corporate management in 2020, SK Group has actively expanding investments in carbon reduction and renewable energy to accelerate the achievement of net zero goals ahead of the global carbon neutrality target in 2050.