Global offshore wind: Key markets and prospects

Focus on: South Korea

In collaboration with: Lee & Ko

Market overview

South Korea’s nascent offshore wind market has made strong advances in the last few years. The first commercial scale offshore wind farms have come online and several GWs of projects, both fixed and floating, are in various stages of development and construction.

The share of renewable energy in South Korea’s electricity generation mix reached 8.9 per cent in 2022, but the government plans to increase the share of renewables significantly.

On 31 May 2024 the General Committee on the Basic Plan on Electricity Supply and Demand released a working-level draft (Draft Plan) of the 11th Basic Plan on Electricity Supply and Demand (the 11th Basic Plan) that provides a blueprint for electricity demand and supply out to 2038. The Ministry of Trade, Industry and Energy (MOTIE) expects to finalise the 11th Basic Plan by the end of 2024. The Draft Plan projects that renewable energy’s share of total energy generation will amount to 21.6 per cent by 2030 and 32.9 per cent by 2038. MOTIE targets 14.3 GW of offshore wind by 2030 and 40.7 GW by 2038.

MOTIE published a strategy paper in May 2024 which sets a government-led push to achieve a 6 GW annual increase in renewable energy. The strategy focuses on manufacturing, installation, financing and adapting the renewable energy market. It also provides for building the necessary infrastructure such as ports and ships and establishing a robust financial support system, with 1.2 trillion won allocated in 2024 and 9 trillion won by 2030.  This strategy has evolved in the context of offshore wind when on 8 August 2024, MOTIE unveiled a roadmap to support the development of 7-8GW offshore wind in South Korea between the second half of 2024 until the end of the first half of 2026.

The Renewable Portfolio Standard (RPS) provides key support (replacing the previous FIT system in 2012) by requiring the country’s largest power generators (i.e. those with installed power generation capacity of over 500 MW) to progressively increase, on a yearly basis, the proportion of their power that is produced using renewable energy. Direct investment in a renewable generation asset is not the only way to meet RPS targets; generators can purchase renewable energy certificates (RECs) from renewable energy producers in order to satisfy their RPS obligations. The sale of these certificates creates revenue streams for renewable energy producers that complement the revenue received from the conventional sale of electricity.