POSCO Jumps into the Fray
POSCO Jumps into the Fray
  • Chun Go-eun
  • 승인 2008.12.16 00:39
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A New Town is planned to be built on a 35.5 million square foot lot near an existing suburban area. The whole development requires 156 Megawatts of energy after it is fully built. Mayor Oh suggests that the development use renewable energy, and so the developers choose to use solar energy. However, after some elementary calculations, they realize that in order to supply the whole 156 MWs, they would have to use 1.42 million square feet, almost 40% of the entire plot. So the developers need an alternate plan, one that doesn't involve a sea of reflective solar panels covering 40% of their development. Senior Vice President Kim Jung-gon of the Fuel Cell Division at POSCO Power asserts fuel cell as plan B.

Vice President Kim Jung-gon said: "In the end, all of the renewable energies, like solar energy, thermal power, and wind power will compete in the Green Industry and contribute to the environmentally friendly life of citizens. But, what we must remember is that for every plan A, a plan B must follow. Each source of renewable energy will serve us best when it suits the environment in which it is to be used. What if the client's lot isn't windy enough What if the area is on the small side Fuel cells take up one fifth of the space that solar energy would require to produce 1 MW of electricity. This gave us the motif and passion to make the investment."

3D Model of Fuel cell energy. Fuel cell energy is composed of a MBOP, stack, and EBOP
POSCO set out on a journey to find a new sector of business in 2003. The mission Chairman Lee Ku-taek of POSCO assigned him was to find the next global business that would prepare the company for a period in which the stainless steel industry alone won't be able to sustain it. The world tour provided an idea in the form of fuel cells.

Fuel cell energy is composed of a Mechanical Balance of Plants (MBOP), Stacks, and Electric Balance of Power (EBOP). Current power generation systems, such as thermal power plants, burn coal, oil, or natural gas to produce energy, but fuel cells produce power through an electrochemical reaction. They require fuel and an oxidant, and with continuous flow of these two things they can operate indefinitely, without even any moving parts that might break down. POSCO fuel cells don't burn raw materials to operate turbines the way traditional thermal power plants do. Their system extracts hydrogen from raw materials and oxygen from the air. Hybrid solutions are great, too, but hydrogen is currently too costly to form into raw materials. Even if it was possible, there is no technology to store hydrogen for regular supply. Those are the two factors that make hybrid solutions infeasible in today's market. That is how the idea of reforming hydrogen to combine it with oxygen to form energy arose.

POSCO sought a future in the fuel cell industry and soon invested money to acquire Kyungin Energy to assist with the power business. The new business department of POSCO then became POSCO Power and supported the project on the other side under the title, Fuel Cell Division. "We have invested 150 billion won so far, and are willing to invest more in order to establish infrastructure and develop technology," Kim said. Through technical cooperation with an American company, Fuel Cell Energy, POSCO Power provides One-Stop Service for POSCO fuel cells, covering from the technological development to manufacturing, to installation and management. Currently, 9 fuel cell power generation systems are installed in institutes across the country.

"Germany and Japan have been investing into solar energy and wind power for twenty years now. A business like this doesn't just come together overnight. It is a gradual process and takes time, and trial and error," stated Kim. POSCO Power believes that the company has a long way to go. POSCO Power has produced BOP itself, however, which saves it 30% of the manufacturing cost. "Our company is confident that no other companies yet have 50MW MCFC BOP production facilities, and we seek the possibility of exporting them. We strongly believe that the last can become the first one day. Korea was not the first one to invent the black and white TV, but our LCDs which increase the quality of color TVs are highly competitive today. In the same way, even though we are currently importing black and white TVs from FCE, our drive to develop them into color TVs will not fade," said Kim. The fuel cell power plant system has already been utilized. In the process of further development, POSCO must find out how to popularize the second generation fuel cell. In addition, POSCO has already started a 5-year project to develop 180kW SOFC systems until 2012 with the aim of the world's first company which commercializes the next generation fuel cell power system.

Kim Jung-gon, Vice President of POSCO Power
While it costs between 1 million and 1.5 million won to build a 1 KW gas turbine, it costs six times more to build a 1 KW fuel cells. In order to deal with the learning curve, POSCO Power is focusing on two primary concerns: establishing a massive production system and developing technology. The government is supporting the cost gap between gas turbines and fuel cells through a reimbursement policy that is based on the margin from the standard price to the average price in the electricity market.

With a great potential for market expansion, the future is looking bright. Twelve megawatts worth of POSCO fuel cells have been preordered for the first quarter of 2009 which pushes up the fuel cell market to surprise the government already. Korea Electric Power Corporation is in favor of the system due to its higher efficiency and environmental friendliness. Reduction of carbon is an extra benefit of fuel cell power plants. Due to the soon expected restriction on carbon genesis, the demand has increased.

"We understand that our product is not yet cost effective. Selling our products is not our primary goal. We have completed a real time monitoring system that gives an immediate attention to any possible accident that may occur. The electricity should never black out, therefore, an immediate repairing system was required," said Kim.

In spite of their high cost, however, fuel cell power plants show excellent efficiency. The power plants can be installed anywhere from the basement to the roof in any structure. They can be built up like Lego blocks, and also spread out in a row. Fuel cell power plants operate silently and use multiple fuels including natural gas, biogas, coal gas, and hydrogen. They can be remote controlled via the Internet and the back-up power runs 24/7.

"One of our models, DFC3000, produces 2.8MW of electricity. This can cover 3000 households, yet the system can be placed separately or be modulated to customize its size to fit the available space. We will continue to work on producing a compact model that can produce massive amounts of electricity," Kim said.

The Green Industry seems to be filled to the brim with competition amongst renewable energy developers, and the fuel cell power plant is not afraid to add itself to the mix.


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