Despite relying on imported sources for 97% of its energy needs, South Korea’s been slow to tap into and develop its wind power resources. That appears to be changing. The South Korean government announced that it will invest 10.2 trillion won (US$9 billion) in building a 2.5 gigawatt (GW) offshore wind farm, the largest in the world.
Located offshore of South Korea’s southwestern coast, the offshore wind farm will be built in three phases by South Korean companies led by Korea Electric Power, the country’s largest electric utility. The first is a 100 megawatt demonstration phase to be completed by 2014. Wind turbines with capacities ranging from 3 MW to 7 MW will be erected mainly off the coast of Jeollabukdo and Jeollanamdo provinces in three stages at a projected cost of 400 billion won (~US$353 million).
A second 400 MW phase is scheduled for completion in 2016 at a cost of 1.6 trillion billion won (US$~US$1.4 billion), according to a Bloomberg BusinessWeek report.
Joining Korea Electric in the consortium of companies building the offshore wind farm are eight suppliers, including Doosan Heavy Industries and Construction Co., Daewoo Shipbuilding & Marine Engineering Co., and Hyundai Heavy Industries Co.
“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,” Bloomberg New Energy Finance lead wind analyst Justin Woo commented.
“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.”
South Korea & Clean Energy
Accounting for less than 3% of South Korea’s energy supply as of 2009, the proportion of renewable energy used is forecast to rise to nearly 4% in 2013, around 6% by 2020 and 13% by 2030.
Having signed and approved the United Nations Framework Convention on Climate Change’s (UNFCCC) Kyoto Protocol, South Korea has pledged to reduce its greenhouse gas emissions (GHGs) by 30% below a business-as-usual baseline scenario by 2030.
An emissions trading scheme (ETS) has been operating in a trial phase since January 2010, with a mandatory ETS scheduled to begin in 2015. As per the ETS, companies that produce more than 25,000 metric tons of carbon emissions per year will be required to set energy saving and greenhouse gas emissions reduction targets.
Announced in October 2010, the country’s “Green Power” project is investing in building 10 renewable energy projects, including installation of solar panels and wind turbines, at electric utilities and power stations.
The South Korean government is becoming increasingly proactive in terms of spurring development of clean and renewable energy.
Other clean energy initiatives include feed-in tariffs for renewable energy, subsidies of up to 80% for installing certain types of renewable energy systems, and long term, low interest loans to operate and manage them.
South Korean Wind Power
Korea’s completed its first wind farm in June, a 9-turbine wind farm with a nameplate capacity of 22 MW, enough to supply clean, renewable power to some 12,000 households and avoid some 3,000 metric tons of carbon emissions per year. Another 30 MW of capacity is expected to be added to the government-sponsored wind farm project, which sits on unused land at a thermal power (coal) site at Yeongheung.
The 2.5-GW wind power project is viewed as a major stepping stone by the South Korean government and industry as the country aims to develop a wind power industry that “by 2015 is expected to become one of the country’s flagship industries along with semiconductors and shipbuilding.”
Earlier this month, the company said it was thinking about buying German wind turbine manufacturer Bard.
A little over a year ago, management stated that it’s looking for wind power industry sales to produce 30% of its total sales by 2020.
For more on recent developments in the offshore and broader wind power industry, see:
– Wind Energy & Wind Turbine Market Booming Globally
– Deepwater Wind to Begin Construction on 30-Megawatt U.S. Offshore Wind Farm by 2014
– Blackstone Private Equity Firm Invests in German Offshore Wind…In a Big Way