[K-Construction, New Challenge]
SK ecoplant is establishing itself as a domestic leader in the offshore wind power sector, recognized as a representative eco-friendly and energy business alongside solar power. It is actively targeting the offshore wind market together with its subsidiary, SK Ocean Plant.
SK ecoplant, Equipped with Engineering Capabilities and Execution Power, Stands Out in Offshore Wind Power Sector
SK ecoplant possesses solid technological expertise in marine plant construction, backed by the high engineering capabilities secured since its days as SK Construction. The execution power gained from accumulated comprehensive design and construction (EPC) experience is also a strength of SK ecoplant.
Recognized for these capabilities, SK ecoplant is jointly developing the offshore wind power ‘Bada Energy’ project with Corio Generation and TotalEnergies. This project involves establishing floating fixed offshore wind power complexes in five regions including Ulsan and Jeonnam. The Gwisin Whale offshore wind power included in the project is a 1.5GW scale floating offshore wind power generation project promoted in the Exclusive Economic Zone (EEZ) about 60 km from Ulsan Port, boasting one of the largest scales in the world.
Corio, a UK offshore wind specialist company collaborating with SK ecoplant on the Bada Energy project, has announced plans to invest $1 billion (approximately 1.3 trillion KRW) in offshore wind projects currently underway or planned in Korea. The UK is a global powerhouse boasting an offshore wind capacity of 13.9GW as of July. The UK has set a goal to increase offshore wind capacity to 50GW by 2030 and is actively encouraging participation from both domestic and overseas companies in building its supply chain. This opens up the possibility for SK ecoplant to secure orders related to UK offshore wind projects.
Ocean Plant, Asia’s No.1 in Substructure Manufacturing, Positive Corporate Value from Continuous Domestic and Overseas Orders
As global companies continue investing domestically, strong order performance is expected from SK ecoplant’s subsidiary, SK Ocean Plant. SK Ocean Plant is Asia’s top manufacturer of offshore wind substructures. In March, SK Ocean Plant signed an agreement with Corio to strengthen cooperation on offshore wind projects totaling 6.8GW across six domestic and international regions including the UK, Australia, Taiwan, and Busan. When Corio identifies a project, its partner SK Ocean Plant manufactures and delivers the offshore wind substructures. SK Ocean Plant is responsible for manufacturing and supplying offshore wind substructures and offshore substations, while Corio handles offshore wind project development, investment, and management.
With favorable winds blowing in the offshore wind sector recently, a positive impact on SK ecoplant’s corporate value is anticipated. In September, SK ecoplant and SK Ocean Plant were selected as preferred negotiators for the domestic Anma offshore wind project and are preparing to finalize contracts. Additionally, bids have been submitted for other domestic offshore wind projects such as Shinan Ui offshore wind and Geumil offshore wind.
SK ecoplant is also actively pursuing overseas orders. SK Ocean Plant secured orders for a total of 193 jackets (a type of substructure supporting offshore wind turbines on the seabed) in the Taiwanese offshore wind market, where orders totaling approximately 5.6GW have been completed. Due to the continuous influx of orders, SK Ocean Plant’s yard (production facility) is already at full capacity. To alleviate this saturation, SK Ocean Plant is constructing a third yard covering 1.57 million m², which is more than 1.7 times larger than the combined area of the existing first and second yards. Furthermore, an outsourcing production system has been established in collaboration with 24 key domestic offshore wind equipment companies. The area secured for external production sites reaches 1.85 million m².
Preparations are also underway to activate floating offshore wind power. SK ecoplant has secured floating offshore wind technology capabilities based on the K-Floating Body developed in cooperation with POSCO, which has obtained certification from the Norwegian classification society DNV. Floating offshore wind power can be installed in deeper waters than fixed offshore wind power, allowing for relatively flexible site conditions. Additionally, the deeper the sea, the more high-quality wind resources can be utilized to create large-scale complexes. It also offers the advantage of stable power generation with less influence from water depth and seabed shape.
In particular, Korea’s floating offshore wind power causes less harm to nearby residents (such as noise, landscape, and fishing ground impacts). This has led to forecasts that the site for floating offshore wind power in Korea will continue to expand. Advanced offshore wind countries such as the UK, Norway, and France are actively promoting floating offshore wind power projects.
The industry expects the domestic offshore wind market to expand due to its higher price predictability compared to fossil fuels, which have high price volatility, and the clear recent trend of declining power generation costs. According to BloombergNEF, the global average levelized cost of energy (LCOE) for offshore wind power, which was around $300 per MWh in the early 2010s, has dropped to $74 as of the first half of this year. This is cheaper than gas power generation, which costs about $92 per MWh.
Especially, next year is expected to be the inaugural year for the offshore wind market to blossom in Korea, supported by policy measures. Recently, the government announced through the ‘2023 Wind Power Fixed Price Contract Competitive Bidding Notice’ that it will contract a total capacity of 1.9GW (400MW onshore wind and 1.5GW offshore wind). Considering that last year’s wind power announcement volume was 550MW, this means contracting more than three times the volume compared to last year.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
