South Korea build-out: Government goal of 12 GW offshore wind by 2030 will be hard – but not impossible – to reach, predicts Aegir Insights

December 10, 2020
 | 
3 min read
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During a visit to the large-scale Southwest offshore wind project in the North Jeolla region earlier this year, President Moon Jae-in stated that “the government’s goal is clear and is to become one of the world’s top five offshore wind energy powerhouses by 2030”.

In order to reach this goal, the government of South Korea plans of a 12 GW offshore wind build-out by 2030. Considering the current offshore wind capacity of only 132.5 MW, this ambitious target requires an average annual build-out of over 1 GW.

Does South Korea have the appropriate market conditions to support the ambitious targets of 12 GW offshore wind by 2030?

In a new South Korea report, Aegir Insights expects that South Korea will reach ~9 GW build-out by 2030 in a base case, and with the right initiatives South Korea could extend that to as much as 14GW in a high case.

Most capacity in the government’s announced build-out plan in the long term is expected to be built in the regions South Jeolla and Ulsan, the latter being suitable for floating projects. In South Jeolla specifically, a substantial area suitable for fixed-bottom project exists with wind resources of 8-8.5 m/s which are similar to wind speeds in Ulsan.

Offshore wind is carved out as a priority in Korea’s Green New Deal, announced in July 2020

A dedicated implementation plan for offshore wind was subsequently released, focusing on reaching the 12 GW, in close collaboration with stakeholder groups such as fisheries. The main support mechanism for offshore wind projects is the RPS scheme, where power producers obtain Renewable Energy Certificates (RECs) for capacity traded in the market. To reduce complexity and uncertainty for offshore wind developers, the government could replace this with a simpler fixed feed-in tariff mechanism.

The development lead times are assumed to be five years in case of no major delays, yet projects to date have seen extended project timelines of 8-11 years from their first permit to COD. One of the issues have been stakeholder relations. However, the launch of several big, government-backed projects might help to clear a path to better stakeholder relations and faster permitting procedures in the future.

Strong maritime and industrial capabilities as well as planned grid investments

South Korea's strong maritime and industrial capabilities throughout the value chain will help lower the learning curve and secure a domestic market. The domestic turbine suppliers are entering the offshore wind market, although they are still behind the rapid turbine upscaling that is seen in Europe. Overall grid investment is required and has been indicated in key areas by the government to avoid grid constraints for the upcoming large-scale projects.

Although South Korea 's 9,2 GW build-out is deemed the most likely scenario, the country’s official target of 12 GW could be within reach if the government comes through with the right measures, as indicated by the high scenario build-out of 13,8 GW by 2030.

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