Daehan Electric Wire Accelerates Targeting Offshore Wind Power Market in 'Renewable Energy'

Daehan Electric Wire cable being installed at the Southwest Sea Offshore Wind Power Phase 1 Demonstration Project site
[Photo by Daehan Electric Wire]

[Asia Economy Reporter Kim Heung-soon] As global interest in energy transition grows, the renewable energy market is rapidly expanding. With the inauguration of U.S. President Joe Biden and the U.S. administration's declaration of carbon neutrality by 2050, along with successive announcements of climate change response policies, this momentum is expected to accelerate.

In South Korea, renewable energy projects are being actively promoted under the Green New Deal policy. Offshore wind power, in particular, is a sector whose share is expanding in the global market and is considered a core project of the "Korean New Deal." The government is pursuing the "Renewable Energy 3020" policy to increase the share of renewable energy generation to 20% of the total national energy by 2030. Accordingly, about 12GW of offshore wind power installations are planned by 2030.

Daehan Electric Wire & Cable Pursues Establishment of New Factory to Expand Submarine Cable Business

In line with this trend, domestic companies are also expanding offshore wind power. A representative case is Daehan Electric Wire & Cable, which is planning to establish a new submarine cable factory. Construction of a coastal factory capable of large-scale submarine cable production is set to begin within this year, with full-scale production planned for 2022.

Daehan Electric Wire & Cable is focusing on building internal power grid facilities. The internal power grid consists of cables connecting wind turbines to each other and turbines to offshore substations. Compared to the external power grid, which connects offshore substations to onshore substations, it has the advantage of lower facility investment costs and entry barriers.

Daehan Electric Wire & Cable has formed a dedicated task force (TF) composed of internal experts in technology, production, sales, and construction to review potential factory sites and investment scale. Considering accessibility to the planned large-scale offshore wind farms and the Dangjin factory, the company plans to select the factory site within the first half of this year, according to the company.

Executing Offshore Wind Power Roadmap and Successfully Carrying Out Government Projects

Earlier, at the end of 2016, Daehan Electric Wire & Cable began its renewable energy business in earnest by establishing facilities capable of producing distribution-level submarine cables at its Dangjin factory. It also entered the offshore wind power business by supplying internal network submarine cables for the "Southwest Region Offshore Wind Power Demonstration Complex Development Project." This project, led by the government, was the first large-scale offshore wind power project in South Korea. In 2017, a research and development (R&D) project constructed three wind turbines, and in 2018, a demonstration complex development project built 17 turbines. Daehan Electric Wire & Cable secured a comprehensive contract for the internal network construction project connecting offshore wind turbines and power plants and successfully completed the delivery.

Currently, the company is undertaking a government project to expand renewable energy called the "New Transmission Cable System Construction." It was finally selected as the project operator for the "70kV Power Cable System for Transmission of Floating Solar Power Generation," overseen by the Korea Energy Technology Evaluation Institute under the Ministry of Trade, Industry and Energy. This project is one of the key initiatives of the government's "Renewable Energy Digital Twin Demonstration Research Infrastructure Project." It aims to establish a foundation within the Saemangeum Industrial Complex in Jeollabuk-do where eco-friendly energy can be integrated and demonstrated in one place to ensure the stable implementation of the Renewable Energy 3020 and Green New Deal policies.

New Challenge... Partnership with Hoban Group to Expand New Business

On the 29th of last month, domestic large private equity firm IMM Private Equity (PE) signed a contract to sell 40% of Daehan Electric Wire & Cable's management rights shares to Hoban Group for 251.8 billion KRW. The acquisition of shares is expected to be finalized by May 31, changing the largest shareholder.

Among Hoban Group affiliates, Hoban Industrial handles civil engineering projects. Since last year, it has entered the solar power business, and both companies expect synergy effects with Daehan Electric Wire & Cable's wire and renewable energy businesses. Daehan Electric Wire & Cable stated, "We have established a stable environment that allows us to focus on research and development and new facility investments for next-generation products such as submarine cables and HVDC (High Voltage Direct Current transmission)." They added, "We plan to continue research and development and facility investments to concentrate our capabilities in renewable energy-related fields."