South Korea’s Ambitious Challenge in Six Energy Sectors: From Tandem Solar Cells to Next-Generation Batteries
Editor
Upon reviewing the South Korean government’s newly announced strategy for dominance in the energy sector, it strikes me as an incredibly ambitious plan. The strategy aims to secure global leadership in six areas: tandem solar cells, next-generation batteries, hydrogen, nuclear power, biofuels, and CCUS (Carbon Capture, Utilization, and Storage) technology. Personally, I strongly feel that this announcement is not merely a policy declaration but could indeed be a turning point that fundamentally transforms the domestic energy industry ecosystem.
What particularly stands out is the government’s focused investment plan in tandem solar cell technology. Currently, the efficiency of silicon solar cells has stagnated at around 26%, whereas tandem solar cells are theoretically known to achieve efficiencies exceeding 40%. With domestic solar companies like Hanwha Solutions already heavily investing in the development of perovskite-silicon tandem cells, this governmental support could significantly aid in securing global competitiveness. It could play a crucial role in narrowing the technological gap with competitors such as China’s LONGi and Germany’s Oxford PV.
The next-generation battery sector is also truly intriguing. Currently, South Korea holds about a 23% share of the global battery market, led by companies like Samsung SDI, LG Energy Solution, and SK On. However, China’s CATL dominates with an overwhelming 37% market share, making it challenging to catch up. If the government’s strategy includes focused investments in next-generation technologies like solid-state batteries and lithium-metal batteries, it might provide an opportunity to leapfrog China through technological advancements.
In reality, the most practically significant area might be the hydrogen sector. South Korea is already in a leading position in the hydrogen vehicle field with Hyundai’s Nexo, and companies like Doosan Fuel Cell show considerable competitiveness in fuel cell technology. According to the government’s plan, the hydrogen economy is set to expand to 43 trillion won by 2030, which is about a threefold increase from the current level. If large-scale investments are made in green hydrogen production and hydrogen infrastructure development, the domestic hydrogen ecosystem could be significantly activated.
The Speed of Global Energy Transition and South Korea’s Position
In a global context where energy transition is accelerating, I believe South Korea’s strategy is very timely. According to the IEA (International Energy Agency), global renewable energy investment surpassed $1.8 trillion in 2024 and is expected to grow at an annual rate of 11% until 2030. The U.S. is investing $370 billion in clean energy through the IRA (Inflation Reduction Act), and China invested $89 billion in the renewable energy sector in 2023 alone. The European Union has also announced a €300 billion investment by 2030 through the REPowerEU plan.
In this global competitive environment, South Korea’s strategy to focus on six sectors seems like a wise choice. Instead of competing in every field, it focuses on areas where we have relative competitiveness. Particularly in the nuclear sector, South Korea has already proven its global competitiveness by winning the UAE Barakah nuclear power plant contract with its APR1400 reactor technology and being selected as the preferred bidder for the Czech nuclear project. Doosan Enerbility’s world-class technology in nuclear power plant facilities is also a significant strength.
The biofuel sector is an interesting choice as well. The global biofuel market is currently valued at about $160 billion and is expected to grow to $250 billion by 2030. Although South Korea is relatively behind in this field, leveraging the infrastructure and technological capabilities of the petrochemical industry could secure competitiveness. Companies like SK Innovation and GS Caltex are already investing in biodiesel production.
CCUS technology is truly an investment for the future. Achieving carbon neutrality necessitates technologies for capturing and utilizing unavoidable carbon emissions, and since it is still in the early stages of commercialization, there is an opportunity for technological preemption. If technology is developed in conjunction with the actual demand from domestic manufacturers, as seen with POSCO Holdings’ investment in CO2 capture technology during the steelmaking process, global competitiveness could be secured.
Analysis of Investment Scale and Feasibility
The government’s announced plan suggests a substantial total investment by 2030. Although specific investment amounts are not specified, achieving the goal of completing an “ultra-innovative economy” would likely require investments in the tens of trillions of won. Personally, I have some doubts about whether this scale of investment can actually be executed. Looking at past government policies for fostering new growth engines, there were often cases where the actual investment scale or outcomes were disappointing compared to initial plans.
However, this time it might be different. As energy security and carbon neutrality become core national survival strategies globally, the level of government commitment and private sector participation is unlike before. Hanwha Solutions has announced a 1.5 trillion won investment in the solar business by 2024, Samsung SDI plans to invest 40 trillion won in the battery business by 2030, and LG Energy Solution plans to invest 18 trillion won by 2026.
What is particularly noteworthy is that this policy focuses not just on R&D investment but also on commercialization and market creation. For tandem solar cells, commercialization is targeted by 2027, and mass production of solid-state batteries is aimed for 2030. The presentation of such specific timelines may indicate the government’s pressure to achieve tangible results.
Ultimately, the most crucial aspect seems to be securing competitiveness in the global supply chain. With China holding over 80% of the solar panel market share and showing overwhelming dominance in battery materials, how South Korea creates differentiated competitiveness is key. Merely developing technology has its limits; cost competitiveness and mass production capabilities must be secured simultaneously.
From this perspective, the core of the government’s strategy appears to be fostering cooperation and synergy among companies. For example, if Hyundai’s hydrogen vehicle technology, Doosan Enerbility’s fuel cell technology, and POSCO’s hydrogen production technology are combined, significant competitiveness could be secured in the hydrogen ecosystem. Similarly, if Samsung SDI and LG Energy Solution compete in next-generation battery technology while collaborating in key materials or equipment sectors, it could enhance the overall industry competitiveness.
Ultimately, for the government’s strategy to succeed, policy support, private sector investment, and technological development by research institutions must be organically connected. Long-term investments in talent development and infrastructure must also be supported. Whether the goal of completing an “ultra-innovative economy” by 2030 can be achieved will depend on the execution over the next few years. Personally, I hope this opportunity will allow South Korea to establish itself as a leading nation in the global energy transition.
This article was written after reading the Government Challenges for Dominance in Six Energy Sectors Including Tandem Solar Cells: “Completion of Ultra-Innovative Economy” and adding personal opinions and analysis.
Disclaimer: This blog is not a news outlet, and the content reflects the author’s personal views. The responsibility for investment decisions lies with the investor, and no liability is assumed for investment losses based on this article’s content.
