SK E&S gears up for more US renewable energy investment

SK E&S Co, South Korea’s top city gas supplier, is preparing for additional investment in the US renewable energy sector. The move is to expand its eco-friendly energy business portfolio in the country as it already bought a controlling stake in the American hydrogen fuel cell maker Plug Power Inc. at $1.5 billion earlier this year.

SK E&S Co. contributed $630 million, about 20% of its equity capital of 3.9 trillion won ($3.3 billion), to its US unit, according to a filing to a South Korea’s financial regulator on Aug. 18 by SK Inc, its holding company. The subsidiary established SK E&S Americas Inc., in 2013 to invest in the shale gas industry in North America.

With the contribution, SK E&S plans to invest in US renewable energy sectors such as photovoltaics, fuel cells and biogas, as well as energy solution sectors including energy storage system (ESS). The company is likely to buy stakes in industry-leading firms as if it took over Plug Power, according the industry sources. It is easier to secure basic capabilities from partners and then work on business by setting up a joint venture.

In July 2020, SK E&S invested 140 billion to buy a 1% stake in Sunrun, and set up a JV with the US leading home solar, battery storage and energy service company. Earlier this year, SK E&S also spent 50 billion won on setting up a liquid hydrogen producer.

SK E&S speeded up a sale of 2 trillion won worth of new preferred stocks in a move to raise money for its hydrogen and renewable energy business and relevant acquisitions. It picked major private equity firms such as KKR & Co and IMM Private Equity as preferred bidders. The company aims to complete the sale this year.

Write to Jung-hwan Hwang at jung@hankyung.com
Jongwoo Cheon edited this article.