Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
European firms face growing difficulties with offshore wind projects in Korea
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By Park Jae-hyuk
Inconsistent government policies and intensifying conflicts with fishermen are hindering European investors and energy firms from betting on offshore wind power projects here, prompting some of them to even leave the Korean market, according to industry officials, Monday.
Shell, which had denied rumors about its exit from the Korean offshore wind market, eventually decided last month to unload its entire 80 percent stake in the MunmuBaram floating wind project off the coast of Ulsan. The British energy firm sold its stake to Hexicon, a Swedish floating wind developer which previously owned 20 percent of the project.
Several other foreign offshore wind farm developers are also said to be considering downsizing their Korean operations, due to the country’s unpredictable business environment, which has changed often following political turnovers.
Despite Korea’s natural environment favorable to offshore wind power generation, European investors and developers have mentioned the country’s unstable energy policies and tough regulations as major obstacles to pursue decades-long projects.
“For the development of the offshore wind industry, an institution independent of politics is necessary,” Daniel Han, who leads the Korean operation of Green Investment Group, said in the first Korea Wind Day event on Feb. 27.
The British green infrastructure investment firm, which is now under Macquarie, also emphasized the need for predictability and transparency in policies related to the offshore wind industry.
Industry officials have pointed out that the central government’s request for complex licensing procedures has frustrated attempts by municipal governments to attract foreign investments in offshore wind projects in their regions.
In addition, fishermen mainly backed by the National Federation of Fisheries Cooperatives have flexed their muscle against foreign offshore wind companies, claiming that the construction of wind farms can cause accidents at sea and their investments can lead to the outflow of the nation’s wealth.
Last month, the cooperatives published a guidebook for fishermen to secure bargaining power in talks with municipalities over offshore wind projects.
“Korean employees at foreign offshore wind companies are mainly tasked with visiting fishermen to convince them,” an industry official said.
To simplify the licensing procedures and prevent the uncontrolled construction of offshore wind farms, Korean-German Chamber of Commerce and Industry Chairman Holger Gerrmann urged lawmakers earlier this year to pass the proposed bill on the Special Act on the Promotion of Wind Power Development and Distribution. The chamber, which represents RWE, Siemens and other German firms, also held a forum on the offshore wind industry last year to call for Korea’s nationwide efforts for the industry.
However, the bill was not passed until the last day of the plenary session of the National Assembly on Feb. 29. It is highly likely to be revoked automatically, after the 21st National Assembly ends about a month after the April 10 general elections.
Amid such a skeptical outlook, a Danish energy minister-led business delegation will visit Seoul this week to help Orsted, Vestas and other companies in the European country avoid setbacks in their offshore wind projects here. Germany is also expected to send its federal minister for economic affairs and climate action to Korea later this year.