2025 Clean Hydrogen Power Generation Bidding Market (September 2025)

Korea's 2025 Clean Hydrogen Power Bidding: A Smarter Second Round

South Korea’s clean hydrogen power generation bidding market has officially opened for 2025, with a total bidding volume of 3,000 GWh—half the size of last year’s initial target of 6,500 GWh.

This year’s auction reflects a more refined policy approach, aimed at attracting greater participation and addressing key concerns from the inaugural round.

In 2024, Korea became the first country in the world to establish a dedicated bidding market for clean hydrogen power. However, the limited response—achieving just 11.5% of the target capacity—highlighted critical structural issues, especially around pricing risk and participation incentives.

What Is the Clean Hydrogen Power Bidding Market?

This market mechanism supports long-term power purchase agreements (PPAs) for electricity generated using hydrogen or hydrogen compounds. It is divided into two segments:

• Clean Hydrogen Power: using certified carbon-free hydrogen (≤ 4 kg CO₂e/kg H₂),

• General Hydrogen Power: with more flexible standards but different policy goals.

  
  

Only projects using clean hydrogen that meets Korean certification standards are eligible for the clean segment.

Key Features of the 2025 Auction

• Bidding Volume: 3,000 GWh

• Contract Term: 15 years

• Start of Operation: Required by 2029, with up to 1-year grace

• Bid Evaluation: Based on price (generation tariff) and non-price indicators, including:

  • Grade of hydrogen utilization

  • Fuel sourcing stability

  • Industrial and economic contribution

• Final Bidders Announced: Expected in November 2025

What’s New This Year?

Two mechanisms have been introduced in 2025:

1. FX-Linked Settlement System - In the 2024 auction, all settlements were in fixed Korean won, placing full foreign exchange (FX) risk on project developers sourcing hydrogen overseas. Starting this year, the generation price is linked to the exchange rate at the time of settlement, helping to mitigate FX volatility and improve bankability.

2. Volume Borrowing Mechanism - In addition to the carryover system (which allows unused volume to roll over), developers may now borrow up to 10% of the following year’s contract volume for early generation. This offers more flexibility in case of shortfalls or operational issues.

   
   

This year’s bidding reflects Korea’s maturing approach to hydrogen market design. By embedding FX safeguards and operational flexibility, the government is responding to real-world project challenges and investor feedback. While the 2024 launch was ambitious, the 2025 auction shows signs of strategic calibration—an essential step toward building a commercially viable hydrogen power ecosystem.

Who's Affected

The hydrogen market's evolution impacts various stakeholders, including:

• Investors seeking opportunities in the hydrogen sector.

• Energy companies looking to diversify their portfolios.

• Regulatory bodies focused on sustainable energy policies.

• Consumers interested in cleaner energy alternatives.

• Local communities that may benefit from new infrastructure projects.

What to Watch

Key developments to monitor in the hydrogen market include:

• Government policy changes affecting hydrogen production and distribution.

• Technological advancements that could lower production costs.

• Market responses to the 2025 auction outcomes.

• Partnerships between companies and research institutions.

• Public perception and acceptance of hydrogen energy solutions.

If you’d like to review the 2024 auction notice, FAQs, and results, as well as the 2025 auction notice, please click below:

• 2024 auction notice, FAQs and results

• 2025 auction notice

  
  

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