Korean Offshore Wind Industry Urges Stable Bidding Caps to Prevent Supply Chain Collapse
At an October 19 seminar, the Korean Wind Energy Industry Association and Energy Transition Forum warned that continued low bidding prices for offshore wind projects risk collapsing the domestic supply chain. They urged the government to freeze or minimally reduce the second-half bidding cap by no more than 1 KRW/kWh.
Our take
Are Korea's offshore wind bidding caps high enough for awarded projects to reach construction?
For fixed-bottom projects only narrowly, and for floating projects not on industry figures; the second-half cap will show whether the government puts build-out ahead of lower contract prices.
Against higher caps, the government's renewable energy basic plan targets offshore wind contract prices of 330 KRW/kWh in 2026 and 250 KRW/kWh by 2030, so downward pressure is policy rather than a one-off, and the industry estimates are interim, come from a seminar arguing for a freeze, and exclude grid connection costs. For the industry case, the slow conversion of awards into construction shows that a cap below cost produces awards rather than built projects. What decides the balance is less the cap itself than whether risks the state controls, such as military permitting and public lender risk-sharing, fall enough to lower financing costs.
What the source says
- Choi Deok-hwan Choi Deok-hwan warned that pushing for price reductions amid high raw material and financing costs could collapse the domestic supply chain before economies of scale are achieved.
- Only 14.5% of the 5.9 GW awarded offshore wind capacity (0.86 GW) has actually commenced construction.
- Developers may abandon projects or switch to cheaper foreign components if profitability is not met, leading to a loss of domestic production capacity and potential future price hikes by foreign suppliers.
- Park Eo-jin Park Eo-jin stated that the required power sale price for fixed-bottom offshore wind (380 KRW/kWh) is within the existing bidding cap range of 370-400 KRW/kWh, but floating offshore wind (600 KRW/kWh) significantly exceeds its approximate 500 KRW/kWh cap.
- Hong Jong-ho Hong Jong-ho proposed that reducing policy-controlled risks, such as military permitting uncertainty and securing public financial institution risk-sharing, could lower financing and generation costs.
- Japan's 2021 offshore wind auction awarded 1.7 GW across three areas at 11.99-16.49 yen/kWh (below the 29 yen/kWh cap), but all winning consortia returned their rights in August 2025 due to cost surges, causing a four-year supply gap.
- Germany supported early offshore wind development with 19.4 euro cents/kWh for the first 8 years when cumulative capacity was 0.5-1 GW, while the UK's first Contract for Difference (CfD) offered 155 pounds/MWh after securing 3 GW with previous schemes.
- The number of domestic turbine developers decreased from 8 in 2011 to 2 currently, due to prolonged project delays.
For investors — Offshore wind developers: Test bids against the falling contract price path in the government's plan, not this year's cap, and treat floating projects as dependent on further policy support.
Lenders: Treat an award as the start of credit work, not evidence of a bankable price; check military permitting status and cost-escalation buffers before committing.
Supply chain investors: Order visibility depends on awarded projects reaching construction, not on tender volumes; track construction starts rather than award announcements.
Watch: Decision on the second-half offshore wind bidding cap by the Korean government.
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