Korea's Ministry of Climate, Energy and Environment Lowers Second-Half 2026 Offshore Wind Price Caps
The Ministry of Climate, Energy and Environment, via the Korea Energy Agency, announced on October 30 that it has lowered the fixed-price contract price caps for the second-half 2026 offshore wind auction. Fixed-type caps decreased by 1.34% to 168,937 KRW/MWh, and floating-type by 0.63% to 174,003 KRW/MWh compared to the previous auction.
Our take
Do Korea's lower offshore wind price caps still leave a viable project return?
Korea's lower offshore wind caps make bids harder to justify, because caps fell by 0.63–1.34% while the industry association estimates project costs have risen 13.2% since 2022.
Higher PF rates add to that squeeze, and one developer says it may withdraw from the bid. The decision to watch is whether the 25-year contract under consideration arrives, though it is aimed at later auctions.
What the source says
- Ministry of Climate, Energy and Environment The total volume for the second-half 2026 auction is approximately 2,200 MW, comprising 1,700 MW for fixed-type and 500 MW for floating-type projects, including 300 MW for public-led fixed-type.
- Korea Wind Energy Industry Association The estimated total project cost for a 100 MW offshore wind farm increased from 870 billion KRW in 2022 to 985 billion KRW in September 2026.
- Korea Wind Energy Industry Association Steel plate and copper prices have risen by 1.7 times and 2.4 times, respectively, since 2020.
- Choi Deok-hwan Choi Deok-hwan of the Korea Wind Energy Industry Association stated that the second-half price cap should have been frozen or reduced by no more than 1 KRW/kWh, rather than the current 2.292 KRW/kWh reduction for fixed-type.
- Park Eojin Park Eojin of OWC Korea suggested that the necessary unit prices for a 500 MW project are approximately 380 KRW/kWh for fixed-type and 600 KRW/kWh for floating-type.
- Ministry of Climate, Energy and Environment The bidding evaluation allocates 50 points each for price and non-price factors, with 6 points for domestic investment/employment in main equipment and 14 points for equipment/material supply chain establishment.
- Ministry of Climate, Energy and Environment Public-led projects receive a basic preferential price of 3,660 KRW/MWh for supply chain/security contribution and an additional 27,840 KRW/MWh for using designated government R&D demonstration equipment.
- Ministry of Climate, Energy and Environment The Ministry of Climate, Energy and Environment is considering extending the fixed-price contract period from 20 years to 25 years for future competitive auctions.
For investors — Solar and wind developers should rerun offshore bids at the new caps with current PF rates and be ready to skip this round if the numbers fail.
Lenders should size offshore debt on current costs and rates, not the 2022 base.
Watch: Announcement of a decision on extending the fixed-price contract period for offshore wind projects.
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