South Korea’s second-largest conglomerate SK Group is accelerating its net zero transition with its affiliates agreeing to buy 537 gigawatts hour (GWh) worth of renewable energy per annum from their green and clean energy-producing sibling SK E&S Co.
The group announced on Friday that its nine affiliates have signed a direct power purchase agreement (PPA) with SK E&S to buy 537 GWh worth of solar energy every year to power each company’s key business operations and data centers for 20 years starting 2026.
This is the largest direct PPA deal signed in Korea. The total capacity is enough to power about 190,000 households per year.
This is also expected to help reduce 5 million tons of greenhouse gases in total for two decades, equivalent to the effect of planting about 20 million pine trees, the company explained.
The group-wide aggressive renewable energy use will enable the Korean conglomerate to achieve its net-zero target before 2050 as planned.
The group has invested to develop its own carbon capture, usage and storage (CCUS) technology, carbon storage systems, blue ammonia production and power plants and ammonia fuel cells.
DIRECT PPA, AN EFFECTIVE WAY TO REDUCE GREENHOUSE GASES
Under the direct PPA, SK Telecom Co., SK Siltron Co., SKC Ltd., SK C&C, SK Materials Co., SK Biopharmaceuticals Co., SK Gas Ltd., SK Broadband Co. and SK Bioscience Co. will directly purchase solar energy from SK E&S.
The direct PPA system allows electricity consumers to buy power from renewable energy generators directly without going through the Korea Power Exchange.
SK E&S Jeonnam Solar Power (Courtesy of SK E&S) The Korean National Assembly passed an amendment to the country’s Electric Utility Act in March 2021 to enact the direct PPA system to bolster green power use in the country.
The renewable energy direct PPA system is considered one of the most effective ways to achieve net zero and the RE100, the global corporate renewable energy initiative, because it can practically contribute to a rise in green energy use and a reduction of greenhouse gas emissions.
SK Group has chosen its clean energy affiliate SK E&S as the renewable energy-producing partner for the latest direct PPA because the energy producer’s offer was the most competitive in terms of price and supply among bidders, it said.
SK E&S provides utility network services and offers liquefied natural gas, power, community energy, renewable energy and international energy. It also operates natural gas power plants.
Renewables and low-carbon energy, such as energy storage systems, LNG and hydrogen, account for less than 5% of SK E&S’ revenue.
