Fair Winds Set to Transform South Korea’s Energy Mix

By Amy McLellan

South Korea is leveraging its existing shipbuilding and maritime base to accelerate offshore wind development, as new legislation paves the way for large-scale wind farm deployment.

From Issue 2, 2025 of Breakbulk Magazine.

For political pundits around the world, the last 12 months have been a wild ride of ballot box upsets and shock and awe tactics.

South Korea has not been immune from this turbulence, with a failed attempt to impose martial law by embattled President Yoon Suk Yeol in December 2024 – which was swiftly rolled back by lawmakers – and the subsequent impeachment of the Prime Minister Han Duck-soo, providing a jolt to this vibrant democracy and stable economy.

The political chaos has dampened growth, which was already being sapped by fears of possible tariffs under a second Trump presidency, while stock markets and the currency – the South Korean won – have lost value as a result of the uncertainty. The Bank of Korea recently reported that the composite business sentiment index (CBSI) in all industries was continuing to slide and, according to the Korea Development Institute, the economy is projected to grow by a muted 1.6% in 2025.

Despite the economic headwinds, regulatory wheels are still turning in the 12th largest economy in the world. Progress is being made in key strategic areas, including the shift to a greener economy powered by offshore wind and nuclear, for which, the country has ambitious plans.

The share of renewable energy in South Korea’s electricity generation mix reached 8.9% in 2022, but the aim is to increase this to 21.6% by 2030 and 32.9% by 2038. South Korea has set a nationwide goal of reaching 14.3 gigawatts (GW) of offshore wind capacity by 2030 and 40.7 GW by 2038.

The Ministry of Trade, Industry & Energy (MOTIE) has a strategy to support this, including building the necessary infrastructure such as ports and ships and establishing a robust financial support system, with 1.2 trillion won allocated in 2024 and 9 trillion won by 2030.

Favorable Regulatory Framework

The early months of 2025 have opened with promise, with long-awaited legislation moving ahead in a bid to streamline and accelerate the permitting processes. In February 2025, the subcommittee of the Trade, Industry, Energy, SMEs and Startups Committee of the 22nd Assembly passed the One-Stop Shop (OSS) Bill for Offshore Wind. While the Bill has not yet become law, the industry has been anticipating this development for a long time.

“This news is particularly welcome as it will help to streamline and simplify the offshore wind development process from a regulatory and permitting perspective,” says Ben Carrozzi, partner at law firm Norton Rose Fulbright LLP in Singapore.

This is good news for a country with big ambitions for offshore wind, because there’s a global playing field for investment and developers will be weighing their options. Should changes in U.S. policy adversely impact offshore wind development there, for example, analysts suspect investment may shift towards Asia, and particularly South Korea, as the regulatory landscape continues to improve and support renewable energy.

“We are seeing positive developments in other markets such as Japan and the Philippines for offshore wind, where policymakers have begun to address some of the challenges that have hindered the offshore wind industry in those countries over recent years,” says Carrozzi.

”Given many developers are common across these markets, there is real competition for capital between these markets, which makes the regulatory environment particularly important in ensuring the stability and growth of the offshore wind industry in South Korea.”

The good news is the political turmoil of December 2024 didn’t stop the Ministry of Trade, Industry, and Energy (MOTIE) award a total of 1,886 MW in capacity across four fixed-bottom offshore wind projects and one floating wind project.

“The majority of these projects are being developed by international developers and the results on the whole are viewed as a significant and positive step forward for the sector,” says Carrozzi.

Opportunities Abound

All of this is good news for those working in the offshore wind supply chains. South Korea is home to some of the world’s major EPC companies, such as Samsung Engineering, Hyundai and Daewoo. The workflow to build out the capacity and associated infrastructure to meet the country’s renewable energy goals will be significant.

Yet, as with any fast-growing industry, there’s a balancing act to match capacity with emerging demand. Leading names are already positioning themselves to build out the specialist capacity required to support this expanding market.

Last year, for example, Mammoet teamed up with Samyang Marine Group to establish Offshore Service Port (OSP) facilities in the ports of Busan and Masan to serve projects across sectors in South Korea. With a primary focus on upcoming offshore wind projects, the partnership will integrate full-spectrum terminal management, including handling, staging, marshalling and stevedoring services, with heavy lifting and installation capabilities.

Offshore wind doesn’t just require port space and heavy-lift cranes, it also takes a fleet of specialist vessels to install, maintain and service these vast structures.

The UK’s Tidal Transit, for example, which recently partnered with Britoil and Sky Offshore to develop, fund, build and operate offshore support vessels for South Korea’s offshore wind industry, said there are lots of issues to consider with any project, including costs, capital and margins. For early movers, it can be an opportunity to shape the future of the supply chain, supporting services and project operations.

“Fleet capacity and bottlenecks will be determined by local content requirements,” says Leo Hambro, commercial director of Tidal Transit. “This is one of the reasons we want to be active in the sector early so that we can aid the development of a fleet of the right vessels built in the right places to make the industry as efficient as possible from day one.”

There’s an opportunity here to learn lessons from more mature markets, like Northwest Europe. Tidal Transit, for example, which specializes in vessel electrification to reduce the offshore wind industry’s carbon footprint, hopes to bring that experience to South Korea.

“When the projects reach the Operation & Maintenance (O&M phase), it is at this point that power is plentiful offshore, but we must encourage developers to have the foresight to install offshore charging, such as Charge Offshore’s Aquarius products, as a standard from day one of installation rather than as a retrofit later,” says Hambro.

Go with the FLOW

Hambro is particularly excited about the opportunities in floating offshore wind, often known as FLOW. “We see the South Korean market as a high growth industry and are particularly focused on the needs that the floating turbines will demand which may differ from the fixed bottom turbines,” he says.

Floating offshore wind is set to play a critical role in meeting the country’s overall net zero objectives because of the depths of its offshore waters. FLOW technology enables access to wind-generated energy at ocean depths of over 60m, currently out of reach of fixed-base wind turbines.

With around 80% of the global offshore wind resource located in deep waters, floating solutions will open up new markets for development. What’s more, floating technology is also expected to allow wind generation that is decoupled from near-shore weather patterns, smoothing the effects of intermittency. This makes South Korea’s deep waters off the east coast ripe for development.

“Experts believe South Korea could secure a large portion of the global floating wind market with substantial potential for large-scale projects in suitable areas like the Ulsan region,” says Yong Woo Park, country manager – Korea at heavy-lift specialist Sarens.

“The geographical constraints of South Korea as well as the nature of its offshore wind resource makes floating offshore wind both attractive, but also necessary if the scale of offshore wind development planned is to be achieved,” agrees Carrozzi at Norton Rose Fulbright.

He points out that the country enjoys a number of competitive advantages when it comes to floating offshore wind, not least one of the world’s leading shipping and maritime industries. “The key to success will be mobilizing and leveraging the country’s existing shipping and maritime industrial base towards offshore wind related applications,” he says.

Floating offshore wind is still a nascent technology, however, which means further refinements to the offshore wind auction process and design could play instrumental in its development. “This could include having a separate bidding pot for floating offshore wind instead of having fixed-bottom and floating offshore wind projects competing in the same allocation rounds,” says Carrozzi. "Ultimately, and if adapted appropriately, we foresee South Korea emerging as a genuine global leader in floating offshore wind over the coming years.”

There are technical challenges to overcome, however, as well as a lack of limited market expertise in this new industry. Despite that, there is an existing supply chain and industry which, combined with the right expertise, should be able to deliver.

This is the approach at Sarens, which has a competent local team combined with the knowledge and expertise the group has built up globally in floating offshore wind, including the assembly of floaters and performing loadouts. There’s also the challenge of finding suitable areas to perform assembly and integration combined with wet storage, adds Park, as other markets and segments also need to be served in Korea. These will need to be partially dedicated to the development of floating offshore wind.

“This means it is hard to get firm commitments from the supply chain, and currently some FEED studies are being conducted with assumptions,” says Park.

These issues can all be resolved, as the expertise and equipment to handle these large and complex projects does exist. “Whether we will need to use our Giant ring cranes or brand new Liebherr LR12500 crawler cranes, of which Sarens has the largest fleet globally, we are ready for the challenge and can really enable the floating offshore wind potential in Korea,” says Park.

Picking up Speed

Whether floating or fixed, the offshore wind boom is gaining real traction in South Korea. Jeong Won Seo, country manager, director and head of heavy-Lift at DENZAI International Projects Co, expects the installation of offshore wind turbines to become full-scale in the next one to two years.

“While port space, vessels and heavy-lift equipment are gradually being prepared, the supply is limited, so projects will need to be carried out sequentially,” he notes, adding that there’s also a looming skills gap. “Although there are skilled personnel for offshore wind turbine installation, their numbers are not sufficient,” he says.

DENZAI is continuously monitoring the opportunities in offshore wind, where it sees huge potential. “Currently, South Korea’s growth is driven by the construction of semiconductor plants, the expansion of oil and gas facilities, and the development of nuclear power plants,” he says. “In the future, offshore wind turbine projects are expected to replace these industries.”

The company is actively preparing for this transition. “DENZAI has been investing in heavier cranes and equipment to meet the demand of EPCs that are engaged in renewable energy,” he says. “Wind turbine components are getting heavier and heavier in order to generate more output, requiring heavier cranes for their construction.”

Nuclear Revival

South Korea’s energy transition won’t just be wind powered. In recent years, the country has been seeking to restore its nuclear power capacity. In October 2024, the long stalled work on units 1 and 2 of the Shin Hanul nuclear power plant was completed and work was started on units 3 and 4, which are scheduled to be completed by 2032 and 2033, respectively.

As well as the $2.2 billion contract with Doosan Enerbility to supply main equipment, including the nuclear reactors, steam generators and turbine generators for Shun Hanul 3 and 4, there has also been serious investment in the ongoing construction of Saeul units 3 and 4 as part of what President Yoon last year called a “nuclear renaissance” in the country.

Under the country’s 11th Basic Plan for Long-Term Electricity Supply and Demand, which outlines energy supply and generation strategies through 2038, the country will build three additional nuclear reactors by 2038, two large and one small scale, raising nuclear power’s share of the energy mix to 35.2%.

In all, carbon-free energy sources, including nuclear power and renewable energies, will account for 70.7% of South Korea’s annual power generation by 2038. The country imports 98% of its fossil fuel consumption and is currently shifting away from a reliance on Middle East energy towards importing LNG from the US.

It plans to convert 28 units of aging coal power generation facilities to liquefied natural gas, while 12 additional coal power units marked for closure will be converted to carbon-free power sources such as hydropower, hydrogen and ammonia mix power generation.

Whatever the future holds for South Korean politics, one thing is clear: its energy transition looks to generate huge opportunities for those in the project cargo and heavy-lift space, particularly those companies that can help find solutions to unlock the potential of its deep offshore.

Mammoet, Tidal Transit, Sarens, DENZAI and Liebherr are exhibitors at Breakbulk events. Samsung Engineering is a member of the Breakbulk Global Shipper Network.