South Korea plans to invest 300 billion won to support domestic offshore wind power projects

According to a report by South Korea's "Asia Economy" on June 10, the South Korean government plans to invest in the "Yeoyue Offshore Wind Power Project" in Gwangyang County, Jeollanam-do through the National Growth Fund, with an estimated investment scale of about 300 billion won. The total investment of this project is 774.9 billion won, and it is expected to become the second renewable energy project supported by the National Growth Fund after the Sinan Nuri Offshore Wind Power Project. The Financial Services Commission will hold an investment review committee as early as July to finally determine the investment plan. The government hopes to expand the application of domestic wind turbines and core equipment through this, cultivate the local offshore wind power industry ecosystem, and enhance the ability of South Korean enterprises to enter the global supply chain.

The Yeoyue Offshore Wind Power Project is led by Doosan GeoSolution, a subsidiary of Doosan Energy. Thirteen 8MW-class wind turbines will be built in the offshore area of Gwangyang County, Jeollanam-do, with a total installed capacity of 104MW. The project will for the first time adopt the domestic 8MW-class offshore wind turbines independently developed by Doosan Energy in a commercial offshore wind farm. It is planned to start construction next month, be completed and put into operation in 2029, and operate continuously for 25 years until 2054. The project's equity is held by Korea Southern Power and Doosan GeoSolution with 40% each, and financial investors hold 20%. The remaining funds of about 650 billion won will be raised through project financing (PF).

The South Korean government believes that the greatest significance of this project lies in promoting the development of the local wind power industry chain. Currently, the global offshore wind power supply chain is mainly dominated by European and Chinese enterprises, and South Korea still relies relatively heavily on importing core equipment in the process of expanding the application of renewable energy. The government hopes to accumulate experience in the application and supply of domestic wind power equipment through the Yeoyue project, narrow the gap with advanced European technologies, and enhance export competitiveness. Although offshore wind power projects generally face risks such as large investment scale and long construction period, the participation of the National Growth Fund is expected to share the long-term risks, attract more private capital investment, and at the same time promote the improvement of energy security and import substitution.

Source: Economic and Trade Window of the Consulate-General in Busan