[Contribution] Unlocking potential growth opportunities for offshore wind in Korea

Jens Orfelt, executive vice president and Asia-Pacific chief at RWE Offshore Wind (RWE)

By Jens Orfelt

Executive vice president and Asia-Pacific chief at RWE Offshore Wind

Geopolitical factors are influencing energy transition decisions and putting increased focus on energy security. The narrative is changing. There is more emphasis on energy independence. Energy security and energy independence are not only essential concepts, but also indicators of political and economic maturity and independence. For example, Korea, by diversifying its energy sources and investing in renewables such as wind and solar, can reduce its dependence on foreign energy, increase its energy security, and build a more sustainable, self-sufficient future. High dependency on energy imports leads to increased vulnerability to price fluctuations and energy instability. Therefore, energy import dependency is a key indicator that reflects the energy security of a country or economy.

Special Act on Offshore Wind: A long-awaited milestone

The new Korean administration has set ambitious goals, such as delivering 14.3 gigawatt of offshore wind capacity by 2030, alongside plans to expand the grid infrastructure needed to support this target — and these are encouraging signs for offshore wind development in Korea. With the passing of the Special Act on Offshore Wind, the government can streamline the permitting process as the Korean market shifts from a developer-led to a centralized regulatory framework. The Korean government can designate planned offshore wind zones for development with the support and engagement of local governments and stakeholders, including fishermen and residents. Simplifying and clarifying bid rules and market boundaries will have a positive impact on current and future investment opportunities for the energy transition in Korea, ensuring a higher degree of energy independence, continued growth and prosperity for a greener tomorrow. The passing of the Special Act serves as an important milestone for providing the industry and investors with confidence that there is a long-term commitment by the government to expand the offshore wind market in Korea. A clear, consistent market-enabling policy framework, building on the Special Act, is the next necessary step to boost investor confidence and match the spending needs of a net-zero future. Those governments that match their policy and legislative frameworks with their political ambition are well-positioned to reap the benefits in the global competition to attract international and Korean market players with the necessary skills and experience to deliver on the green energy transition.

Promising outlook for Korea

I am convinced that Korea will benefit immensely from investing in the energy transition. Increased investment in the energy transition is key to meeting rising consumer demand and addressing hikes in energy demand and prices. Korea has a very strong industrial base. It has developed into a global leader in various industries, including artificial intelligence, semiconductors, automobiles, shipbuilding and electronics. To maintain global export capabilities and to meet consumer energy demand, the Korean government has a keen interest in looking for solutions that not only provide energy independence but also ensure a continued strong exporting industrial base: it is therefore important to lay a foundation for the establishment of the offshore wind industry in Korea by moving forward with offshore wind projects that are already significantly developed.

In Korea, more than 100 offshore wind projects have been granted Electricity Business Licenses, or EBLs, which is the initial stage of permitting. The awarded EBLs represent years of building trust and rapport with the Korean government, local stakeholders and local communities. However, not all of these projects are expected to be built either because of regulatory, environmental, defense or financial reasons. It could be beneficial for the Korean government to enter into dialogue with license holders on how some of these otherwise stranded projects could potentially form a base for centralized offshore wind auctions. This way, the government and taxpayers can benefit from the time, effort and money already spent on these projects. In addition, a close dialogue between the government and the offshore industry is needed on how the transition from the current Renewable Energy Certificate auction regime to centralized auctions can be done in a way that ensures the continued rollout of the Korean energy transition through the deployment of large-scale infrastructure projects like offshore wind farms.

What next?

As already mentioned, what Korea needs now is enabling legislative frameworks for offshore wind, with an auction regime that is attractive for developers, like RWE, to invest in. We also need the government to commit to investment in ancillary infrastructure, like ports and grid transmission systems. Without transmission, there is no transition. At RWE, our strategy is to deliver offshore wind projects for Korea by teaming up with strong local partners to leverage and bring the best of our experience of more than 20 years in developing, building and operating offshore wind farms across the world, in combination with strong local connections and experience.

One of the things I appreciate the most about working in the offshore wind industry and energy transition space is that we need all parts of society to work together as one — men and women, young and old, from engineers to lawyers, accountants and those who conduct research into bird migration and marine wildlife, local stakeholder managers, etc. Similarly, all branches of government and regulatory bodies need to come together to support and commit to achieving the energy transition. In many ways, it becomes a small community working on delivering clean energy solutions for the benefit of the wider community. With a strong political ambition backed by an enabling legislative framework, the energy transition will not only bring significant benefits to our children and future generations but will also support export growth and business development in Korea.