[Public Voices] "The 'Second Shipbuilding Industry' Offshore Wind Power, No Time to Hesitate"

Jonghwa Kim, Head of Offshore Wind Power Business Group, Korea Electric Power Corporation

Offshore wind power, which had a global cumulative installed capacity of only 3GW in 2010, grew about 12 times to 36GW in 2020. It is expected to expand to 386GW by 2035, more than 10 times the 2020 level.

Furthermore, last May, four European countries?Germany, Denmark, the Netherlands, and Belgium?agreed to establish offshore wind farms with a minimum capacity of 150GW in the North Sea by 2050. This plan aims to reduce dependence on Russian fossil fuels through green hydrogen production using offshore wind power. The world is thus paying attention to large-scale offshore wind power as a practical alternative for carbon neutrality and energy security.

South Korea also announced a roadmap in 2011 to promote 2.5GW of offshore wind power in the southwestern sea under the banner of becoming one of the world’s top three offshore wind power nations by 2020. However, as of the end of 2021, the total installed capacity operating nationwide was only 142.1MW, showing sluggish performance.

South Korea is surrounded by sea on three sides and is evaluated to have favorable wind power resources. However, to revitalize the offshore wind power industry, the following three matters must be prioritized.

First, policy consistency is required considering the large-scale investment and long-term operation business. Offshore wind power development takes several years just in the development process?from site selection, feasibility review, to securing local acceptance?before making the final investment decision. After that, it takes several more years for financing and construction, and the operation period lasts about 25 years. Therefore, policy consistency is very important in project promotion. This is why offshore wind power is often called a Government Driven Industry.

Second, institutional improvement is urgent. Under the current system, offshore wind power developers must directly handle all procedures?from site discovery, securing local acceptance, to about 20 permits regulated by approximately 15 laws. This imposes a tremendous burden on project promotion, causing delays or even project failures. In May 2021, the Korean-style one-stop shop bill, the “Special Act on Promotion of Wind Power Generation,” was proposed and is currently under review by a parliamentary subcommittee. This law focuses on government-led site discovery, securing local acceptance, and simplifying project permits, and it is expected that domestic offshore wind power projects will be promoted immediately upon its enactment.

Third, to activate the domestic market, large-scale projects must be successfully completed quickly. So far, the domestic offshore wind power market and industry have been weak due to insufficient demand. Offshore wind power is a heavy, large-scale, and long-term investment business, so gigawatt-level project promotion that can induce industrial activation is urgent.

Through such large-scale projects, related domestic infrastructure and value chains should be developed to promote the growth of the industrial ecosystem. Offshore wind power is an industry where the theory of economies of scale typically applies, requiring a win-win strategy of mutual cooperation to grow the market. While we hesitated over the past decade after first attempting offshore wind power, China, Japan, and Taiwan have surpassed us, and Vietnam and the Philippines are ambitiously advancing. The next ten years are our last chance.

Jonghwa Kim, Head of Offshore Wind Power Business Group, Korea Electric Power Corporation