1.9-GW Korean auction gives big boost to floating offshore wind

A total of 1,886 MW of capacity was awarded, somewhat more than called for by the Korean tender, including four bottom-fixed offshore windfarms, and one floating windfarm.

Bottom-fixed projects securing awards included Anma Offshore Wind 1 (Jeonnam, 224 MW); Anma Offshore Wind 2 (Jeonnam, 308 MW); Taean (Vena Energy, 500 MW); Yawol (Daehan Green Power, 104 MW) and Equinor’s 750-MW Firefly floating wind project.

OWC principal consultant and head of offshore wind auctions and cost engineering Juan Frías said the auction for bottom-fixed projects was oversubscribed with seven projects bidding. Only one floating wind project was bid. 

“The release of the auction results ahead of the schedule and despite the current political turmoil in the country underscores Korea’s commitment to the offshore wind sector and to decarbonising the energy sector,” he said.

“The announcement provides much needed confidence to the market, international developers and investors. In addition, the increased focus on local content in the auction’s non-price criteria is expected to drive investments of local supply chains.

“The award to Equinor’s Firefly project is a global milestone for floating wind, being the largest floating wind project with a route to market worldwide and the first commercial floating wind project outside Europe. The scale, site conditions and complexity of Firefly make it a real frontier project.” 

Aegir Insights senior market analyst APAC Simon Engfred Schlichting told OWJ the Korean government originally intended to award 1 GW fixed-bottom and 0.5 GW floating offshore wind capacity, but the auction was heavily oversubscribed with bids totalling more than 2.4 GW.

“The big story of the auction is the award of an offtake contract to the Firefly project,” he told OWJ. “At 750 MW, the Firefly project is the largest floating project to receive an offtake contract to date. For South Korea it’s a significant step towards becoming a global leader in floating offshore wind.

“The award of an offtake contract for Firefly is another significant step for commercial-scale floating offshore wind, following GreenVolt project award in the UK earlier this year. With this latest award, the South Korean government is clearly showing it is willing to pay for the development of floating offshore wind technology.

“Together with the UK, South Korea is now one of the most promising markets for floating wind developers in which to mature projects and find a route to market.

“Looking ahead, the South Korean government announced an auction roadmap earlier in 2024, with a plan for the next offtake auction for offshore wind already due in Q2 2025. 

“The 2025 auction was due to include 0.5-1 GW for floating and 2-2.5 GW of fixed-bottom but the government has indicated that volumes might be adjusted based on results from this auction. Clearly, there will be significant capacity for floating and fixed-bottom projects, and the competition could be fierce.”