2026 Hydrogen Power Generation Bidding Market Opens; Clean Hydrogen Volume Falls to One-Thirteenth

Clean Hydrogen Auction Opens with 500 GWh; General Hydrogen Auction with 930 GWh
Auction Volumes Slashed, Sparking Debate Over Retreat in Hydrogen Industry Policy
Clean Hydrogen Auction to Use Non-Price Indicators in First-Stage Assessment
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Hydrogen turbine demonstration site at Hanwha Impact's Daesan facility. Hanwha Impact

The Ministry of Climate, Energy and Environment said it would open the 2026 hydrogen power generation bidding market at 7 p.m. on October 30. This year, the tender volume for clean hydrogen power generation is 500 gigawatt-hours (GWh) annually, while the volume for general hydrogen power generation is 930 GWh annually. The clean hydrogen tender volume has fallen to one-thirteenth of its level in 2024, the market's first year.

The sharp reduction in tender volumes is expected to spark debate over whether policies to foster the hydrogen industry are going into reverse. Businesses that have been preparing to participate in the hydrogen power generation bidding market are also expected to face uncertainty.

The hydrogen power generation bidding market is a system for purchasing and supplying electricity generated using hydrogen or hydrogen compounds as fuel. It is divided into clean hydrogen power generation and general hydrogen power generation, depending on the fuel used.

Only power generation facilities using fuel that meets South Korea's clean hydrogen certification standard - greenhouse gas emissions of no more than 4 kg CO2e per 1 kg of hydrogen - may participate in the clean hydrogen power generation bidding market. Participants may use hydrogen-LNG co-firing or dedicated hydrogen-fired power generation. General hydrogen power generation uses reformed hydrogen or byproduct hydrogen as fuel, and is primarily based on fuel cell generation.

This year's tender volume for clean hydrogen power generation is 500 GWh annually, with a contract period of 15 years. That is 7.7% of the 6,500 GWh tendered in 2024, when the clean hydrogen power generation market was first opened, or one-thirteenth of that amount. It is also down 83% from 3,000 GWh in 2025.

With the number of businesses that can be selected falling sharply, companies that have been preparing hydrogen-LNG co-firing or dedicated hydrogen-fired power generation projects are expected to face greater uncertainty.

Businesses selected in the competitive tender for clean hydrogen power generation must begin commercial operations by 2030, following a three-year preparation period. The Ministry said, "Considering the construction period for hydrogen co-firing and dedicated hydrogen-fired power generation facilities, we will grant a grace period of up to three years during which penalties for project delays will be suspended."

The Ministry said it plans to select preferred bidders around June next year (2027), based on a comprehensive assessment of price indicators and non-price indicators, including clean hydrogen utilization grades, fuel supply stability, and contributions to industry and the economy. In line with the government's policy to phase out coal-fired power generation by 2040, coal-ammonia co-firing has been excluded from eligibility for support under the clean hydrogen power generation bidding market starting this year.

In particular, the Ministry has introduced a first-stage evaluation based solely on non-price indicators and increased the weighting for non-price assessments from 40% to 50%. The non-price indicators assess contributions to industry and the economy, as well as contributions to greenhouse gas reduction. As a result, domestically produced clean hydrogen is expected to have an advantage over clean hydrogen imported from overseas.

The Ministry said, "Non-price indicators are expected to play a more important role," adding, "We plan to select bidders for 1.5 times the tender volume based solely on the first-stage non-price evaluation." In effect, non-price indicators are expected to determine which bidders are selected.

The general hydrogen power generation bidding market has an annual tender volume of 930 GWh and a contract period of 20 years. The tender volume for general hydrogen power generation had been 1,300 GWh since 2023, but fell 28.5% this year.

Businesses selected in the general hydrogen power generation tender must begin operations in 2029 after a two-year project preparation period. This year's tender has strengthened environmental assessment criteria, including the introduction of an evaluation indicator for carbon capture, utilization and storage (CCUS) plans.

Preferred bidders are scheduled to be selected around December this year following a comprehensive assessment of price indicators and non-price indicators, including impacts on the power grid and contributions to industry and the economy.

For details, including the tender notice, see the Korea Power Exchange's Low-Carbon Central Contract Integrated Platform website.

This content was produced with the assistance of AI translation services.