Today, a new study on cost of energy for offshore wind in South Korea by Aegir Insights, Pondera Consult and COWI was published, leading up to the 2021 P4G summit, taking place in Seoul the 30th-31st of May.
The study looks at cost of energy through varying lenses, with Pondera and COWI examining the policy environment, energy situation and possible socio-economic effects of offshore wind development, while Aegir Insights contributed with our proprietary levelized cost of energy (LCOE) assessment tool, investigating the LCOE of developing commercial-scale offshore wind in South Korea by mid-2020, and visualizing which sites can achieve the lowest costs.
Public-private partnerships key to efficient offshore wind
Overall the study finds that partnerships between local and foreign companies can help South Korea build out offshore wind faster and cheaper. While South Korea has an impressive industrial base and is ready to supply many components, the domestic companies in areas like turbine manufacturing lack the solid track record of international offshore wind companies, and this shows in the price levels.
The LCOE for a floating wind farm built using only local suppliers is estimated to be 19% more expensive than one built in in cooperation with experienced, global offshore wind companies. For fixed-bottom farms, the difference is 22%.
Eventually the price differences are likely to diminish, but for at start partnerships between domestic and international suppliers will be the best way for South Korea to jumpstart offshore wind development.
A report for emerging market offshore wind policy-makers
Knowing how to achieve the fastest and cheapest build-out as an emerging market can help Korean policy-makers establish the right regulatory framework and increase Korea’s chance of reaching its ambitious target of 12 GW offshore wind power by 2030 – a target that means that the whole industry is watching the country with interest.
The expectation is that Korea will have both a fixed-bottom build-out and be home to the first floating wind farms in Asia, with the potential to develop into a floating structure manufacturing hub.
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