1

Dr. Jay Koo

President & CEO of SK Energy

Opportunities In The Green Economy

OECD World ForumBUSAN, KOREA 2009

2

• Energy & Environmental Challenges

• Green Growth Initiatives

• Green Technologies at SK Energy

• Concluding Remarks

3

Energy Demand

Hydrocarbon Energy Supply

Population Not just CO2!Water, landGlobal GDP

EnvironmentalIssues

Plenty of oil,but not "easy"

1 2 3

Living standards

Energy Challenges

• Three hard truths

4

International Actions Under Way

New Energy Plan („09)

Increase renewable energy for electricity: 10% („12), 25% („25)

Raise vehicle fuel efficiency: 35.5 mpg („16)

“Climate-Energy Package” Legislative Act („08)

Increase renewable energy: 20% („20)

Reduce CO2: 20% (‟20)

“Cool Earth 50” („07) & Hatoyama‟s Plans („09)

Develop 21 core technologies for low-carbon society

Reduce CO2: 25% (‟20)

Green Growth Vision („09)

Increase renewable energy: 11% („30)

Reduce CO2: To be announced

• Wider involvement, tighter restriction (Copenhagen, 2009)

5

Clean coal ($2.2T, „30)

Biofuels($120B, „20)

(P)HEV/EV($1.4T, ‟30)

Wind, PV, etc.($1.0T, ‟30)

CDM($15B, ‟15)

Water($1.5T, ‟15)

Morgan Stanley

Point Carbon

GWI (Global Water Intelligence)

Monitor Group

Monitor Group

EPRI

Opportunities In Green Growth

• Exploring of opportunities in climate change and energy crisis

The “green race” is on

6

• Core green technology development

Korea‟s Green Growth Initiatives

Solar cells,

Evolutionary water

reactor

LED lighting,

Batteries

High

EfficiencyClean Energy

Sources

(P)HEV/EV, FCV,

Eco-cities

Greening

Industry·Space

Environmental

Protection·

Resource Circulation

Climate change

forecasting,

CCS

Zero-pollution

Economic

Activity

Convergence

Contents

27 Core TechnologiesSource: Presidential

Committee on Green Growth

SK Energy‟s Focus on Green Growth Technologies

IncreaseEfficiency

ExpandSupply

Mitigate Emissions

7

Expand Supply

Increase Efficiency

Mitigate Emissions

Clean CoalBiofuels Solar Cells

CO2-to-chemicals

CO2-to-polymers

Hydrogen

Hydrogen Low Carbon OperationAutomobile Electrification Smart Grid

8

Coal distribution & reserves

Unit: Billion Barrel Oil Equivalent

Feed

Availability

CostEnviron-

ment

EnergyTriangle

• 3x more coal than oil, even distribution • High CAPEX, high CO2 emissions

1) R/P: Reserve-to-Production Ratio Source: BP, “Statistical Review of World Energy”, 2008

Abundant

Affordable Clean

Breakthrough technology required to develop clean coal

Clean Coal Technology

5,012

1,427 1,430

Coal Oil Gas

R/P: 133

R/P: 42 R/P: 60

9

Clean Coal Technology

• The challenge use low-grade coal, reduce CO2

• Now high-grade coal needed, high CO2 generated

$50 / ton

(High CO2)C+O2 CO2

C+CO2 2COC+H2O CO+H2

Current

Technology

1,500℃

High-grade

coal

SynCrude

Electricity

Chemicals

SynGas(CO+H2)

$10 / ton

Breakthrough

TechnologyLow-grade

coal(Low CO2)C+O2 CO2

C+CO2 2COC+H2O CO+H21,200℃

10

Biofuel Technology

Edible crops: diminishes food supply Inedible crops: diminishes farm land

• Bioethanol: the primary biofuel today- US: 4% („07) 16% („20), EU: 2% („07) 17% („20)

• Low calorific value (2/3 that of oil)

• Gasoline pipeline transport impossible (water solubility)

Edible crops Inedible crops

Feed

Availability

Affordable Clean

EnergyTriangle

Limitation of bioethanolIssues withBioethanol

Biobuthanol

Red Algae

Marine-basedbiomass

Issues with land-based biomass

Abundant

Low calory Incomparability

Technical Solutions

11

Battery Technology

Electri-city

Fossil fuel

Fossil fuel

Electri-cityElectri-

city

Fossil fuel

10

21

42

(fuel eff.: km/l)

Internalcombustion

vehicles

Hybrid vehicles

Plug-in1

hybrids (PHEV)Electric vehicles

170% of US vehicles travel less than 30miles/day on average, 2Based on gasoline at $1.60/liter and electricity at $0.08/kwh,,

“ Electric vehicles in Korea will operate at 1/10 the cost of gasoline powered vehicles2 ”

• Li-ion batteries: the key to automobile electrification

700M Vehicles (‘08) 1.2B (‘30) 6.6B Population (‘08) 8.1B (‘30)Source: UN, 2009

• Vehicles: 41% of oil demand & 13% of GHG emissions

Source: Multi-path transportation futures study, DOE, 2007

World o

il co

nsu

mption (M

BPD

)

41.1%46.5%

49.5% 51.9%55.5%

59.9%

Source: IEA World Energy Outlook 2006

Transportation

Industrial

Others

Transportation (13%)

Agr./Waste

(16%)

Industry(23%)

Forestry(18%)

Power(10%)

Buildings(7%)

Power (Ind.)(8%)

Others(5%)

Source: complemented LULUCF with IEA & IPCC data, 2005

GHGGeneration

12

Applications

BatterySystem

• SK Energy makes the key components

Battery Technology

Challenges

• Li-ion batteries to meet performance, safety & cost requirements

Energy Storage

Automotive

PHEV/EV

e

BMS: Battery Management System, ESS: Energy storage System

SKE‟s Key Technologies

Electrode

Separator

Cell/Pack

BMS

Performance, Safety, Cost

13

• Relative strengths over conventional polymers

- Clean burning: no soot or toxic gas

- Superior optical properties

- Superior barrier properties (O2, H2O)

- Less expensive to make

- Potential applications

CO2-derived Polymer Technology

Other PolymersCO2 Polymer

After 2 weeks

PO(Propylene oxide)

O

O

O

44%CO2

ProprietaryCatalyst

• Technical approaches: CCS CCU (Carbon Conversion & Utilization)

Engineeringplastics

Wrappingfilm

Foodcontainers

14

The Challenges We Face

( To Be Completed )

15