SK riding on growing hydrogen industry

Plug Power's hydrogen tank truck is seen in this photo provided by SK Holdings, Wednesday. / Courtesy of SK Holdings

SK-invested Power Plug to begin hydrogen car biz with Renault

By Baek Byung-yeul

SK Group is riding high on the growing hydrogen fuel cell business as U.S.-based power company Plug Power, in which the group recently purchased shares, will expand into the fuel cell vehicle business with French automotive group Renault.

Plug Power said Tuesday (local time) that it signed a memorandum of understanding with French automotive Groupe Renault to launch a 50-50 joint venture based in France by the end of the first half of 2021.

It said the joint venture will conduct research and development activities, manufacturing and the sale of fuel cell-powered vehicles, and operate a hydrogen turn-key businesses in the coming years. The two companies also set the goal of taking a 30 percent share of the fuel cell-powered light commercial vehicle market in Europe.

"This joint-venture platform will serve the fast-growing market of fuel cell light commercial vehicles, taxis, and commercial transportation for people," Plug Power said in a statement.

SK Group owns a 9.9 percent share in Plug Power as SK Holdings, the holding company of the group, and SK E&S, a natural gas business arm, said Jan. 7 they had acquired the stake for 1.6 trillion won ($1.5 billion).

Thanks to the joint venture announcement, SK Group said its equity value in Plug Power increased by 2 trillion won just five days after the investment.

The group said Plug Power's stock price closed at $66, Tuesday, up 130 percent from the individual share acquisition price of $29.

Industry analysts say investors are betting big on Plug Power as the company can play a pivotal role with hydrogen rapidly becoming a viable energy source in Asia and Europe.

Meanwhile, SK Holdings and SK E&S will set up a joint venture with Plug Power to enter the domestic and Asian hydrogen markets.

SK Group already has a broad energy business portfolio, ranging from refineries and batteries for electric vehicles to natural gas and renewable energy. With this investment, SK Group is expected to accelerate its goal to expand its presence in the hydrogen sector.

In December, SK announced plans to produce 30,000 tons of hydrogen in 2023 and increase the figure to 280,000 tons by 2025. It also aims to establish a hydrogen value chain of production, distribution and supply.

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