How ESS is powering Korea’s renewable energy: an interview with Bae Min-su

Along the similar lines of CCS and batteries, the energy storage system (ESS) is another prominent strategy for the world to gradually transition into eco-friendly energy usage. One company specializing in the development of ESS is SK Innovation E&S, and Team Leader of Renewable Energy, Bae Min-su, shared with us the company's progress. His responses about current challenges, ESG rating, and government policies, shed light to the complexities of ESS business and its importance as an environmentally and socially engaging business.

Could you introduce your department in SK E&S?

Our team is the team that promotes the ESS, the energy storage system, and various energy solution businesses. You can see it as a business development organization. SK E&S is basically the number one private company in domestic renewable energy. We operate LNG power plants, hydrogen, the energy solutions sector that I’m in, city gas, and various energy businesses.

Then, what efforts is E&S promoting to use renewable energy or reduce carbon emissions?

Basically, because the business itself utilizes renewable energy, the business itself is better in terms of carbon emissions compared to coal or other businesses. And also, the hydrogen business we’re doing is eco-friendly energy, so overall we think it has a positive effect on carbon emissions and responding to the climate crisis. Our business itself can reduce carbon emissions and can be seen as an environmentally friendly energy business.

Our business departments are very diverse. We do LNG trading, which is natural gas. Usually, natural gas is developed from the actual field, traded, and we operate power plants based on LNG. Next, there are eight city gas networks nationwide. For example, in Gangnam, there’s Cowon Energy Service, which is our subsidiary. Next, we do renewable energy projects like solar and wind, the ESS business I mentioned earlier, and hydrogen. You can now see hydrogen buses, and we are generally doing all of that.

How does the global trend of achieving net zero affect your work?

Basically, many talk about RE100, but for some countries, 2030 is almost impossible. Ultimately, if they’re going to pursue it, many renewable energy power plants must be built. Solar and wind must be built in large numbers. We keep doing that, so we’re contributing. Of course, there are electric vehicles now, but we also operate electric vehicle charging businesses. That can contribute a little, and hydrogen itself is the most eco-friendly energy. If a hydrogen ecosystem comes, it could contribute more to the carbon-neutral era.

What kind of work is being done for the hydrogen-driven energy era to arrive?

To do hydrogen, even if cars are internal combustion, recently electric vehicles have gained attention. For electric vehicles to spread, the infrastructure for EV charging must be well established. Korea has built many charging stations in a short period to secure many facilities, but hydrogen is just beginning, so first, hydrogen charging stations must be secured. Of course, there must be production facilities that can supply hydrogen. And besides the charging stations and production facilities, there must be hydrogen buses or hydrogen cars. Hyundai has released the Nexo hydrogen car, so there need to be more vehicles. The demand side itself must exist.

What do you see as the main motivation for companies to invest in eco-friendly energy?

For companies, the biggest thing is profit. They pursue profit, and earning revenue is important, but nowadays, it’s not only about profit. Companies must also consider stakeholders’ happiness, and the commonly mentioned ESG—environment, social, governance. So that could have a positive influence. I believe our company’s business portfolio fits well in the ESG era. We’ve received ESG awards, and although my department doesn’t manage the award itself, we’ve received awards and it’s being done in practice.

Are there difficulties in supplying renewable energy stably?

First, compared to coal energy or nuclear energy, production costs are higher. Installing solar panels has higher production costs, which is generally said to be expensive. Solar power requires wide areas. Therefore, securing sites can be difficult due to residents’ complaints and other issues. Wind power plants, whether onshore or offshore, are long-term projects, so they require long periods of time.

How do government policies or regulations affect your work?

They have a huge impact. Our company is a power company, so solar, wind, LNG power plants supply electricity. This is basically a national project, so government policies are very closely related. If the government supports renewable energy with subsidies, loosens regulations, or uses public funds to promote it, the business can grow. Otherwise, it may not grow. So these businesses are very closely linked to government policy.

Do you also conduct renewable energy projects overseas?

We are doing solar projects in Vietnam, and LNG mines and terminal businesses in the U.S. and Australia. But since these projects are closely tied to government regulations, it’s not easy for domestic companies to operate overseas. Nevertheless, we must continue globally, and renewable energy expansion is a worldwide trend. We continue to seek opportunities aligned with this global trend.

Domestically, we have large-scale renewable energy projects in Saemangeum, around Gunsan, on tidal flats. So we’re anticipating those projects. Hydrogen is also one of the largest among private operators, so from a mid-to-long-term perspective, it’s an anticipated project.

Which project are you currently focusing on the most?

I’m focusing on how to expand and improve ESS, the energy storage system. For renewable energy like solar power, when the sun isn’t shining, you can’t generate electricity. Solar only generates during the day, but when solar power is generated, the transmission network cannot accept all the capacity. That excess electricity would be wasted. ESS stores it so it can be used at night. We’re doing that significantly in Korea, so I’m concentrating on that business.

Are there other technologies or solutions being prepared to solve issues with solar or wind energy?

That’s what I just mentioned—the energy storage system using batteries. Electricity produced elsewhere can be stored and used when needed. For example, electricity prices are higher during the day and cheaper at night. You can store renewable energy when it’s cheap or abundant and use it when it’s expensive. This is the most effective method. SK On produces batteries, so electricity can be stored using their products.

Are there activities involving communication or cooperation with local communities?

For large-scale solar or wind installations, large land areas are required, so cooperation with residents is necessary. With renewable energy and wind, profits are shared with residents. A portion of the generated electricity is shared with residents, so the presence of power plants benefits their livelihood. Our projects follow this system.

For the domestic market to catch up with Europe or the U.S., what policies or regulations do you think are most needed?

It’s not easy to get approvals. Residents’ consent must be obtained, so local governments should be more proactive, and the process of getting residents’ consent should be better coordinated. Korea isn’t a very large country, so it’s difficult to build large-scale solar farms. Rooftop solar is common. For those projects, approvals and cooperation should be facilitated by the authorities.