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South Korean Companies in Uphill Battle in Offshore Wind Power Market
Slow Growth
South Korean Companies in Uphill Battle in Offshore Wind Power Market
  • By Jung Min-hee
  • May 9, 2016, 03:30
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The installation of wind power facilities in South Korea totaled 239 MW, just 0.4% of the global wind power facility installation.
The installation of wind power facilities in South Korea totaled 239 MW, just 0.4% of the global wind power facility installation.

 

It has been found that only three South Korean companies are currently engaged in the production of wind power generators although the number used to be about 10 five years ago. At present, Doosan Heavy Industries is the only South Korean player producing offshore wind power generators and Unison and Hanjin Industry are manufacturing those for use on the ground. Daewoo Shipbuilding & Marine Engineering, Hyundai Heavy Industries, Samsung Heavy Industries, STX Heavy Industries and Hyundai Rotem have withdrawn from the industry, only maintaining their repair and maintenance parts in it.

This can be attributed to the slow growth of the domestic wind power market. Last year, the installation of wind power facilities in South Korea totaled 239 MW, about one-third of solar power facility installation in the country and 0.4% of the global wind power facility installation for the same period. Besides, most of the installed facilities are for power generation on the ground and offshore wind power generation takes up only 10 MW or so, most of them being for demonstration purposes.

The South Korean government’s effort for market creation is not going well, either. The government came up with a plan to place an offshore wind power complex with a capacity of 2.9 GW in the West Sea region in early 2011 but failed to begin the construction in 2013 due to residents’ opposition. It was given the green light in March this year and a drilling investigation is underway now. Most of the companies planning to take part in the project have withdrawn except for Doosan Heavy Industries, which is to build a 60 MW test site.

Nowadays, 10 non-Korean companies such as Siemens, GE and Vestas are enjoying a share of more than 60% in the global wind power market. In addition, the power generation efficiency of their wind turbines exceeds that of South Korean companies’ by a margin of at least 10 percentage points, which means the latter is likely to have a hard time in the sector down the road. According to the Korea Energy Economics Institute, the global offshore wind power market is likely to show an average growth rate of 21.8% a year between 2014 and 2020 to grow from 8.8 GW to 28.8 GW during the period.