Hyundai Motor's hydrogen fuel-cell sedan Nexo fills up at the Palyong refueling station in Changwon, South Gyeongsang Province. Courtesy of Changwon City Office



Hardened auto-parts makers greased to join Changwon's tests on hydrogen



By Ko Dong-hwan



CHANGWON ― Kyunghan Korea has been making transmission, pump and engine parts for internal combustion engine vehicles for 28 years in Changwon. But in 2018, the second-tier subcontractor to global auto maker Hyundai Motor started manufacturing other things for a new generation of cars.



"They were difficult to make because hydrogen cars cannot run on iron components," Park Gi-suk, the company's technical adviser, told The Korea Times. "So they were made out of stainless steel and had to be super-precise."



Kyunghan's new products are motor shafts and discs for hydrogen vehicles. The company delivers them to GMB Korea, another local auto parts producer that exports water pump parts and recorded yearly sales of a whopping 1 trillion won ($860 million).



Kyunghan has been delivering about 500 products a month to GMB. The demand, according to Park, will increase to 30,000, starting 2020.



"Hyundai made electric cars but there are already countless of them in Japan, Germany and China, and the cars need environmentally harmful power plants," Park said. "Hydrogen cars, however, are downright eco-friendly. Kyunghan will keep making hydrogen auto parts."



Another Changwon local, LSK, in 2018 developed a main shaft for the electric motor for Hyundai's hydrogen model Nexo, one of few hydrogen-powered family cars available.



The fourth-tier subcontractor to Hyundai started mass producing the shaft early the following year after the firm's sales of transmission parts for internal combustion engine vehicles ― which it had been making for the past decade ― started dwindling.



"The shafts for Nexo need an alloy of carbon, chrome, nickel and manganese in a content ratio different from conventional types, so it takes a long time to make them," Lee Byung-ho, LSK's president, told The Korea Times.



Lee said that without the subsidy of 48 million won from the Changwon Industry Promotion Agency, a Changwon City Office subsidiary, in 2018, his company wouldn't have attempted to make the Nexo parts. Product development and purchase of special equipment had cost LSK 68 million won.



"If opportunities further allow, I want to keep making the motor shafts, whether for hydrogen cars or electric cars," Lee said.





One of Changwon's five hydrogen-powered public transit buses refuels at the city's Seongju refueling station. Courtesy of Changwon City Office





Kang Young-taec, leader of Changwon Industry Promotion Agency's Hydrogen Industry Team

Kyunghan and LSK are among hundreds of "old-school" machine shops in Changwon that have been the backbone of the city's strong mechanical industry. But as the city started gearing for the hydrogen revolution in the automobile and power generation sectors in 2016, the aged firms felt the looming shadows of being left out ― and possible mass shutdowns.



The promotion agency's Hydrogen Industry Team did not want to lose the city's skills base. So it tried to make inroads for the firms into the growing hydrogen market. The team brought together willing firms and Hyundai Motor, which is the global leader in hydrogen cars, to see if they could forge a possible subcontract deal. If the firms proved they could make what Hyundai wanted by demonstrating with prototypes, both parties agreed to sign the deal.



The partnerships have formed an ecosystem in Changwon under which Hyundai builds fuel-cell stacks ― a core hydrogen car component that produces electricity to power the vehicle ― while other parts are made by the subcontractors and delivered to Hyundai or its first-tier subcontractors. The parts are certified by the Korea Gas Safety Corporation before delivery.



Now, more Changwon firms have become part of the city's hydrogen initiative under the agency's direction, making parts for hydrogen cars and refueling stations across the country. The national goal for 2040 is to produce 6.2 million hydrogen vehicles (2.9 million for domestic drivers) and 1,200 refueling depots. As of December 2019, Changwon had 510 hydrogen cars and five buses and three refueling stations.



"Changwon's engineering firms can make anything," Kang Young-taec, the promotion agency's hydrogen industry team leader, told The Korea Times. "Almost 90 percent of hydrogen refueling stations across the country, except the imported ones, were made by our city hands. But their ground has been shaky as eco-friendly markets started growing in the country.



"With research and development for hybrid cars already over and electric cars' exports to China blocked as the country started making its own electric motors, hydrogen cars presented as our local firms' only option to share the prospective pie."



Hydrogen cars (45,000 to 50,000 parts), create more demand for parts fabrication orders for local firms than electric cars (15,000 to 20,000 parts) and internal combustion engine cars (40,000 parts). The agency, which works with the policymaking city and central governments and Changwon's local industry players, encourages Hyundai and its first-tier subcontractors to "help local firms." The agency also subsidizes the local firms for their research and development.



"For local firms to thrive, majors and their subcontractors must be under a mutual ecosystem," Kang said. "Nurturing such an environment is nurturing Changwon."





KwangShin Machinery in Haman, next to Changwon in South Gyeongsang Province, built this hydrogen diaphragm compressor for a refueling station in Naepo, South Chungcheong Province. Courtesy of KwangShin Machinery



Localization



Despite the agency's efforts to involve local firms in the city's hydrogen revolution, the city still lacks expertise in fuel-cell battery and liquid hydrogen technologies. For now, reliance on imported foreign technologies is inevitable. But the city aims to localize them in a decade or two.



Korea's POSCO, Doosan PureCell and other smaller firms have been leading the domestic fuel-cell battery market. But their efficiency falls short of that of more advanced foreign companies, according to Kang. He said Korea's SK Energy is planning to sign a partnership with the United States' Bloom Energy to import its fuel-cell technology, which will then affect Korean companies' domestic market shares.



"If foreign technologies land in Korea, they will push domestic technologies out of the market in competition," Kang said. "It's then the central government's job to decide whether to keep relying on foreign technologies or invest in domestic technologies to make a boom out of them."



The more promising is liquid hydrogen. The agency, Changwon city office, the South Gyeongsang provincial government and Doosan Heavy Industries plan to start building the country's first liquid hydrogen manufacturing plant in the city in January 2020.



After they choose a foreign company ― either Germany's Linde, France's Air Liquide or the United States' Air Products and Chemicals ― to import the relevant technology, the 93 billion won plant (with 18 billion won from state coffers) will begin construction and be complete in 2022. It will produce five tons of liquid hydrogen daily ― enough for 1,000 sedans.



"The level of Korea's hydrogen refueling technology is just at 40 percent of that of global leaders," Kang said. "We must raise the figure to 100 by 2030 in accordance with the national goal."





Water-splitting equipment at Energy & Marine Solution in Changwon. The technology, extracting hydrogen by splitting water into hydrogen and oxygen, was used for hydrogen refueling stations across Korea. Courtesy of Energy & Marine Solution



To achieve that goal, mass production of liquid hydrogen is imperative. Compared to gas, liquid hydrogen allows the stations to serve more cars a day (at least 240 compared to 60), store more hydrogen (up to two tons compared to 250 kilograms), refill their storage tanks faster (filled up by a single 3.5 ton tank lorry compared to multiple 300 kilogram tank lorries), and operate longer business hours (22-plus hours a day compared to 18 hours maximum). It will also reduce distribution costs and station maintenance costs like electricity, and allow stations to be built on a smaller land area. Liquid hydrogen, at minus 253 degrees Celsius, also has a much less risk of explosion.



In all aspects, liquid hydrogen is safer and convenient for car owners and financially benefits refueling station operators. The larger each station's fuel storage is, according to Kang, the more lucrative the 3 billion won business is.



Liquid hydrogen also can contribute to sectors like aerospace and semiconductors and the country's other state-of-the-art industries.



"Korea's first space launch vehicle NARO and America's SpaceX rocket engines use solid kerosene as fuel but liquid hydrogen is lighter than kerosene and has thrice more efficiency, so, if managed properly, it can replace kerosene," Kang said. "A liquid hydrogen plant will be a seed that opens up other liquid hydrogen industries in Korea."





JNK Heaters' hydrogen reformer is another local component used for the country's refueling stations. Courtesy of JNK Heaters



Hydrogen complex



Korea's hydrogen technologies still have a long way to go to compete in the global market. But the agency is optimistic that there will be research, manufacture and distribution of the energy at the highest possible efficiency. Already approved by the central government for next year's budget, it could be what Kang said is "the world's best hydrogen complex system."



"There really isn't global competitiveness for our hydrogen industry if we break them down separately," Kang said. "But if we built a system where technologies for hydrogen vehicles, fuel-cell batteries, liquid hydrogen and carbon dioxide capture were developed and shared at one place to save hefty distribution costs, that would be advantageous. We can tell the industry players, 'we will produce hydrogen here so you can buy it and operate here.' That will create a huge synergy."



The concept of the Hydrogen Energy Cycle System (HECS) was first planned by Kang in 2016 and the scheme developed the following year. It began with an initiative to provide business opportunities to companies that can work with hydrogen. It was the starting point of Changwon's hydrogen revolution.





Fuel-cell batteries in the making at Bumhan's factory in Changwon. Courtesy of Bumhan