South Korea, which imports 97% of its energy needs, is planning to invest 10.2 trillion won ($9 billion) in developing a 2.5 GW offshore wind farm by 2019 that will be the largest in the region and among the largest in the world.
Korea Electric Power Corp., the country’s biggest generator, will head the government-led project, including the procuring of turbines from eight local suppliers.
South Korea wants to build its capabilities in the wind business to compete with manufacturers in Europe, China and the USA as it seeks to promote alternative energy and cut emissions. The nation is spending 1 trillion won this year on feed-in tariffs to wind, solar and other renewable energy projects.
“South Korea is a latecomer to wind energy and is coming in at a very difficult time for the industry, where severe competition and falling turbine prices are squeezing the profits of the entire supply chain,”commented Justin Wu, lead wind analyst with Bloomberg New Energy Finance. “Offshore wind is probably the best entry point for Korean companies into this sector, given their extensive shipbuilding and marine engineering experience as well as the country’s excellent offshore wind resources.”
The project will be located off the southwest coast of the Korea peninsula, mainly in Jeollabukdo and Jeollanamdo provinces, and developed in three stages. An initial 400 billion won will be spent on the construction of a 100 MW demonstration wind farm by 2014 when the eight suppliers, including Doosan Heavy Industries and Construction Co., Daewoo Shipbuilding & Marine Engineering Co., and Hyundai Heavy Industries Co., erect turbines with capacities between 3 and 7 MW.
Another 1.6 trillion won will be spent on constructing a 400 MW demonstration wind farm by 2016 and the remaining 8.2 trillion on a 2 GW wind farm to be built by 2019, according to the Energy ministry’s road map. The government plans to provide administrative and policy support for the project and the local governments of Jeollanam and Jeollabuk will have to approve the use of the offshore sites.
Global offshore wind capacity is expected to reach about 78 GW by 2020 from about 3.5 GW currently, according to New Energy Finance. China, with 30GW (38% of the total) will have the largest share by that time, the research agency has forecast.
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