Attention in the power generation industry is turning to the "2025 clean hydrogen power generation (CHPS) competitive bid" that the Korea Power Exchange will announce at the end of the year. That is because the clean hydrogen power generation bid, which was abruptly canceled last month, now appears likely to resume in line with the new administration's coal phaseout policy direction.
According to the government on the 6th, the clean hydrogen power generation bidding market system operates by transacting electricity produced with clean hydrogen through bidding. Korea Electric Power Corporation and zonal electricity business operators must purchase hydrogen-generated power according to the set plan. Among state-owned and private power generators, the hydrogen power generation operators selected through bidding will supply electricity produced with clean hydrogen.
The system was first implemented in May last year. The government recognizes only "clean hydrogen," defined as emitting 4 kilograms or less of carbon dioxide per 1 kilogram of hydrogen produced, as an eligible fuel for power generation, while also setting a price cap on hydrogen-generated electricity.
After selection, operators go through a three-year preparation period and can then sell electricity produced with clean fuels such as hydrogen or ammonia for 15 years. Last year, only South-East Power met the price criteria and won the bid, and South-East Power plans to co-fire ammonia produced by Aramco in coal generation to reduce greenhouse gases.
The Korea Power Exchange announced a second competitive bid in May this year. Bidder registration was scheduled for mid- to late September, and bid proposals and supporting documents were due Oct. 17. However, on the due date, the Korea Power Exchange abruptly canceled the bid, saying it would "replace it with a new notice."
Within government circles, the clash between the government's coal phaseout policy and the clean hydrogen power generation system is cited as the cause. Under this year's notice, the design called for purchasing and supplying electricity produced using hydrogen or hydrogen compounds (such as ammonia) as fuel through 2044. This did not align with the Lee Jae-myung administration's policy of "closing all coal-fired power plants by 2040," raising concerns that it could slow the pace of coal plant closures.
Minister Kim Sung-hwan of the Ministry of Climate, Energy and Environment also indirectly referred to the background of the bid cancellation during the National Assembly's Climate, Energy and Environment and Labor Committee audit on Oct. 29, saying, "It is right to stop co-firing generation that burns coal and ammonia together."
The power generation industry says it is confused as policy direction has flipped within a year. An official at a power company said, "We are waiting for the reannouncement at the end of the year, but it is hard to respond because we do not know how the criteria will change," adding, "It also seems possible it will be limited to green hydrogen that uses only electricity produced from renewable energy."
The Ministry of Climate, Energy and Environment is said to be reviewing various alternatives to reannounce the clean hydrogen power generation bid by the end of the year. Reportedly under discussion are options such as shortening the period to allow co-firing only temporarily until coal plants are closed, and excluding coal–ammonia co-firing generation.
However, it appears unlikely that the clean hydrogen criteria presented as bidding conditions will be changed immediately. The ministry explained that it does not plan to exclude blue hydrogen, which is produced from fossil fuels, or narrow the classification standard to green hydrogen produced through renewable energy.
Meanwhile, environmental groups argue that even the clean hydrogen contract won by South-East Power and Aramco, the only winners last year, should be canceled, but the government's position is that it cannot apply changes retroactively to previous contracts. The ministry said, "There is little possibility of changing or canceling the contract terms with the South-East Power–Aramco consortium, which was selected last year and will begin co-firing in 2028."