Orsted, the world’s largest offshore wind developer based in Denmark, has suspended its bid for what would have been South Korea’s largest offshore wind project off the coast of Incheon and has begun restructuring its South Korean operations. The decision reflects a sharp deterioration in project economics driven by rising supply chain costs and mounting external uncertainties. Industry observers now expect Orsted to fully exit the South Korean market.<\/p>\n
According to energy trade publication Recharge News and other sources on the 27th, Orsted has decided to temporarily shelve its 1.4GW (gigawatt) offshore wind project planned for waters off Incheon. The company will not participate in the South Korean government’s upcoming fixed-price contract competitive bidding for offshore wind and will undertake a comprehensive review of the project.<\/p>\n
The scaling back of development activities has made significant workforce reductions unavoidable. Orsted announced through an internal notice that it plans to carry out restructuring across its global organization, including its South Korean subsidiary.<\/p>\n
Per Mejnert Kristensen, Orsted’s head of Asia-Pacific, said in an internal memo: “Over the past year, external factors have increased the risk profile of the Incheon project while significantly weakening its business case. It does not meet our internal investment criteria, and we are therefore suspending our participation in the bidding at this stage.”<\/p>\n
South Korea’s Largest Private Offshore Wind Project Halted<\/p>\n
Orsted’s Incheon project consists of two phases \u2014 800MW and 600MW \u2014 making it the largest offshore wind development undertaken by a single private developer in South Korea. With total project costs estimated in the trillions of won, it has been regarded as a flagship large-scale project in the South Korean renewable energy market.<\/p>\n
Orsted intends to pursue future bidding rounds after redesigning the project to restore economic viability. However, with even the global industry leader suspending its project and cutting jobs, observers expect investment contraction across South Korea’s offshore wind sector to be unavoidable.<\/p>\n
Orsted has stated that this decision does not signify a complete withdrawal from the South Korean market. Nevertheless, analysts note that inflation, high interest rates, and South Korea’s complex permitting regulations are accelerating a trend of “de-Korea” divestment and investment deferral among global offshore wind companies. Equinor and Shell had already exited the South Korean market before Orsted’s move.<\/p>\n
Government Targets Diverge from Reality<\/p>\n
An industry source said: “The government has set targets to reduce offshore wind power prices \u2014 which are still in an early stage \u2014 to 250 won per kWh by 2030 and below 150 won by 2035. These aggressive policy goals, presented without concrete justification, are causing even developers with proven competitiveness and experience to view South Korean offshore wind projects as unattractive.”<\/p>\n
The Ministry of Trade, Industry and Energy announced the previous day that it would expand renewable energy capacity to 220GW by 2040, including 45GW from offshore wind. However, the successive departures of global developers are fueling skepticism about the achievability of these government targets.<\/p>\n
The global offshore wind industry has long pointed to structural problems in the South Korean market, including complex permitting procedures, local community opposition, fishing rights compensation issues, and grid connection delays. These challenges have been compounded in recent years by rising interest rates and surging supply chain costs, which have severely eroded project economics.<\/p>\n","protected":false},"excerpt":{"rendered":"Orsted, the world’s largest offshore wind developer based in Denmark, has suspended its bid for what would have…\n","protected":false},"author":2,"featured_media":153857,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[285],"tags":[11079,72528,72525,287,72526,72529,33324,72527],"class_list":["post-153856","post","type-post","status-publish","format-standard","has-post-thumbnail","category-orsted","tag-equinor","tag-fixed-price-contract-competitive-bidding","tag-incheon-offshore-wind","tag-orsted","tag-per-mejnert-kristensen","tag-recharge-news","tag-shell","tag-south-korean-government"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@dk\/117167165688220612","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts\/153856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/comments?post=153856"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts\/153856\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/media\/153857"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/media?parent=153856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/categories?post=153856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/tags?post=153856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}