(Updates with developers in second paragraph.)
Nov. 11 (Bloomberg) -- South Korea, which imports 97 percent of its energy needs, will invest 10.2 trillion won ($9 billion) to develop a 2.5-gigawatt offshore wind farm by 2019 that will be the largest in the country.
Korea Electric Power Corp., the country’s biggest generator, and its six generating units, will lead the government-led project, including procuring turbines from eight local suppliers, the Ministry of Knowledge Economy said in an e- mailed statement today.
South Korea wants to build its capabilities in the wind business to compete with European nations, China and the U.S., as it seeks to promote alternative energy and cut emissions. The nation is spending 1 trillion won this year for feed in tariffs, or preferential payments, to wind, solar and other renewable energy projects.
“South Korea is a latecomer to wind energy and is coming in at a very difficult time for the industry, where severe competition and falling turbine prices are squeezing the profits of the entire supply chain,” Justin Wu, lead wind analyst with Bloomberg New Energy Finance, said in a e-mail .“Offshore wind is probably the best entry point for Korean companies into this sector, given their extensive shipbuilding and marine engineering experience as well as the country’s excellent offshore wind resources.”
The project will be located off the southwest coast of the Korea peninsula, mainly in Jeollabukdo and Jeollanamdo provinces, and developed in three stages.
An initial 400 billion won will be spent on the construction of a 100-megawatt demonstration farm by 2014 when the eight suppliers, including Doosan Heavy Industries and Construction Co., Daewoo Shipbuilding & Marine Engineering Co., and Hyundai Heavy Industries Co., erect turbines with capacities of 3 megawatts to 7 megawatts.
Another 1.6 trillion won will be spent to construct a 400- megawatt demonstration wind farm by 2016. The remaining 8.2 trillion won will be used to build a 2-gigawatt wind farm by 2019, according to the ministry’s road map.
The government plans to provide administrative and policy support for the project and the local governments of Jeollanam- do and Jeollabukdo will have to approve the use of the sea for the farms, the statement said.
Global offshore wind capacity is expected to reach about 78 gigawatts by 2020 from about 3.5 gigawatts currently, according to New Energy Finance. China will be the largest country with offshore wind installations at 30 gigawatts, or 38 percent of the total, by that time, the research agency forecast.
--Editors: Baldave Singh, John Chacko
To contact the reporters on this story: Sangim Han in Seoul at firstname.lastname@example.org; Sungwoo Park in Seoul at email@example.com
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