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Offshore wind boosted by significant investment in renewables

Mon 25 Jul 2016 by David Foxwell

Offshore wind boosted by significant investment in renewables
South Korea is ideally placed to take advantage of offshore wind energy, having several well known turbine manufacturers and a highly developed marine/shipbuilding sector

Faced with a choice between coal-fired power generation and investment in green energy, the South Korean Government has opted for the latter and has upped targets for renewable energy-based power generation. The government said it would like to see new renewable power plants equivalent in capacity to six coal-fired power stations developed by power companies. A number of renewable energy projects are being planned, including new offshore windfarms in a number of areas, including Taean, Jeju and Gori.

As of the end of 2014, South Korea had cumulative wind-generating capacity of around 608.5 megawatts (MW), up 8.5 per cent from 561MW in 2013, although this is almost exclusively land-based capacity. A plan for construction of 2.5 gigawatts (GW) of offshore wind capacity off the west coast of the country was first announced in 2010.

South Korea would seem to be ideally placed to take advantage of growth in the global offshore wind energy industry, having a highly developed technical base, several well known turbine manufacturers and a highly developed marine/shipbuildng sector, which could become involved in installation and maintenance and, in the longer term, in floating offshore wind. To date, for land-based windfarms, the government has concentrated on local production of components in order to secure the supply chain for wind projects. However, South Korea’s geographical conditions are not especially suitable for wind power generation on land, due to the country’s relatively small landmass and limited wind in many regions. These unfavourable conditions have served as a trigger for South Korea’s wind power industry to search for markets overseas. A number of well known turbine manufacturers have exhibited at offshore wind events in Europe in recent years but have found contracts hard to come by. Companies such as Hyundai Heavy Industries, Samsung Heavy Industries, Daewoo Shipbuilding & Marine Engineering, Doosan Heavy Industries and Hyosung Heavy Industries have all sought greater involvement in the industry but have been faced with a number of difficulties securing wind projects at home and abroad. They have also faced stiff competition from European manufacturers such as MHI Vestas Offshore Wind and Siemens, along with GE and several Chinese companies.

According to the roadmap unveiled in 2010, a total of 2.5GW of offshore wind capacity was to be built out in the southwest sea in three stages over nine years, beginning in 2011. The plan anticipated that, in the first four years, 60MW of windfarm capacity would be installed to demonstrate the performance of Doosan Heavy Industries’ 3MW wind turbines. After that, a further 400MW of offshore wind capacity was to be installed in order to help the industry acquire operational experience. The final stage, 2GW of windfarm capacity, will be constructed using turbines of 5MW or more, although given recent growth in turbine capacity, that would now seem outdated. Apart from large-scale commercial projects, South Korea also has offshore turbines installed in Jeju, which were developed by the Korea Institute of Energy Research. This particular project consists of a 2MW STX direct drive turbine installed in 2011 and a 3MW Doosan turbine installed in July 2012.

In April 2015, the above-mentioned plan was modified with a new timeline that foresees 80MW of capacity operational by 2018. Most of the projects under the 2.5GW will use the private-public partnership (PPP) model, in which the Korea Electric Power Corporation (KEPCO) will be a leading developer, together with Doosan Heavy Industries & Construction. It is worth mentioning that Jeju also has an ambitious plan to be a carbon-free island by 2030 and to have several offshore windfarms with total capacity of 2GW. A 30MW offshore demonstrator, the Tamra offshore windfarm, is under construction and is being developed by Posco and Doosan Heavy Industries & Construction.

Other recent developments have seen the installation of jacket foundations at the 30MW Tamra offshore windfarm off the coast of South Korea nearing completion. Contractor Daeshin Wind Power is responsible for the installation work for the project, which will make use of Doosan 3MW turbines. Once completed, it will be South Korea’s first offshore windfarm. It is due to be commissioned in 2017.

Given recent pronouncements in South Korea and the renewed commitment to offshore wind, a number of European consultancies are taking a very active interest in the country. In June 2016, South Korean state-owned enterprise Korea Offshore Wind Power (KOWP) signed a memorandum of understanding with Wind Minds in The Netherlands regarding co-operation in developing an ambitious new project in South Korea. The Southwest Offshore Wind Project will be developed by KOWP. The aim is to develop a 60MW test phase, with 400MW realised by 2022. The long-term goal is to build out 2.5GW of offshore wind capacity in the Yellow Sea to the southwest of Seoul. In June 2016, K2 Management was awarded a contract by KOWP for the same project, which is located 11km off the west coast of South Korea in the Yellow Sea. K2 Management’s wind analysis team will conduct an independent energy yield assessment for the first round of the project (the initial 60MW) to provide KOWP with the necessary data about the estimated energy production. K2 Management will also review the production estimate and the assumptions applied by the lender’s technical advisor.

Earlier this year, Wind Minds formed Wind Minds Korea, a joint venture between Wind Minds BV in The Netherlands, DoArm Engineering Co Ltd and Haechun Corporation, which will serve clients as an engineering and consulting company. The company aims to provide full-scale consulting and engineering services through all stages of offshore and onshore wind projects in Korea and overseas markets. Late 2015 also saw Wind Minds enter into another joint venture, also with DoArm Engineering and Haechun, to develop two nearshore windfarms close to Jeju Island. This particular JV aims to develop two projects, the Sin Chang and GwiDeok windfarms, both situated approximately 1km off the northwest coast of Jeju Island. Both projects consist of a first phase of 20 wind turbines, resulting in two 100MW windfarms.

RES in the UK recently signed a memorandum of understanding with Dohwa Engineering Co Ltd of South Korea. The agreement, signed earlier in June, outlines the principal arrangements for future co-operation between the two businesses, including upcoming large-scale South Korean offshore wind projects. Blue Wind Engineering Co Ltd, RES’s representative in South Korea, will support RES and Dohwa.

The partnership will see RES providing offshore marine project management expertise along with specific package management support. In return, Dohwa will employ RES as its supplier of choice for offshore consultancy. The new partnership will see Dohwa Engineering benefiting from RES’s offshore wind knowledge from working on projects in Europe and the US and RES benefiting from Dohwa Engineering’s local consultancy expertise.

RES Offshore’s business development manager Asia, Kevin Todd, said, “By working with Dohwa, we believe the RES contribution will significantly strengthen Dohwa’s EPC offer to the South Korean offshore wind market.

“RES sees the Far East as the fastest-growing new sector in offshore wind and is keen to share our experience of working in offshore wind projects with the new sector. Finding local partners is important to facilitate our expansion in the region. Dohwa are a large successful business wishing to also move into offshore wind. Korea and other major Far East countries see the importance of investing in the offshore wind industry to diversify their energy mix and meet CO2 targets.”

SunRae Kim, vice president, Dohwa Engineering Co and chief of the company’s power plant division, said the company was confident that co-operation with RES would “lead to great opportunities” for the business and provide a “concrete opportunity to acquire an upcoming large-scale offshore windfarm, which would be the first of its type in South Korea”.

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