Korea South-East Power (KOEN) has formally decided to withdraw from the 3.1 trillion won (approximately $2.11 billion) Shinan Ui offshore wind project, marking a significant shift in one of South Korea’s largest planned renewable energy projects.
According to the Ministry of Trade, Industry, and Energy (MOTIE), KOEN finalised its exit in December 2024 by deciding to sell its stake and notified its partners in the consortium. The Shinan Ui offshore wind development, led by multiple investors, was considered a flagship project in advancing South Korea’s renewable energy capacity.
Stake sale under discussion
Industry sources indicate that discussions are still ongoing regarding the sale of KOEN’s 37 percent share. Options include selling the entire stake as one block or dividing it into smaller portions, either through an open bid or a private transaction. Hanwha Ocean – which also holds 37 percent of the project – and SK Eternix, with 26 percent, remain as partners.
Potential buyers being discussed include Hyundai Engineering & Construction, which already owns around 20 percent of the project through a separate investment vehicle, and Korea East-West Power, with roughly 10 percent. Some industry speculation suggests Hanwha Ocean could initially acquire KOEN’s share before transferring it to another strategic partner.
About the Shinan Ui offshore wind project
The project involves the construction of a 390 MW offshore wind farm near Uido Island in Docho-myeon, Shinan County, South Jeolla Province. With a total project cost of 3.1 trillion won, it consists of 620 billion won in equity capital and 2.48 trillion won in debt financing.
The venture had been selected in the 2023 Wind Power Fixed-Price Contract Competitive Bidding, organised by MOTIE and the Korea Energy Agency, granting investors stable revenue over 20 years under the contract terms.
Setback after feasibility review
Despite initial progress, the project encountered a major hurdle in August 2024, when it failed a preliminary feasibility study conducted by the Ministry of Economy and Finance and the Korea Development Institute (KDI). Rising material and construction costs reportedly undermined the project’s economic viability.
As a result, KOEN chose to withdraw, and its exit raises questions about the investment climate for large-scale offshore wind projects in South Korea. By law, public investment projects exceeding 200 billion won in total cost and 100 billion won in government contributions are required to undergo economic feasibility testing before proceeding.
Industry concerns over market confidence
Industry officials warn that the withdrawal of a major state-owned power company could discourage future offshore wind investment. One source highlighted that unless costs can be reduced – potentially by using lower-cost equipment such as Chinese-made turbines – the challenge of ensuring project viability will persist.
A representative from a domestic power generation firm commented that the situation “risks undermining the original goals of offshore wind development, including energy security, localisation of supply chains, and the long-term stability of renewable power generation.”
