Environmental assessment, auction terms, grid access and community engagement will shape the final investment decision
Rasmus Errboe, CEO of global offshore wind developer Ørsted, visited South Korea and met government, parliamentary and European business representatives to discuss the country’s energy transition and the future of its offshore wind industry. He also reviewed the progress of the company’s planned offshore wind projects off the coast of Incheon.
The visit indicates that Ørsted is assessing Korea’s long-term market prospects and the conditions required to advance its projects. The immediate question is whether the 1.47 GW Incheon Offshore Wind 1 and 2 projects can progress from development approval to auction participation, a final investment decision and construction.
Ørsted is developing the 870 MW Incheon Offshore Wind 1 and the 600 MW Incheon Offshore Wind 2 projects approximately 70 kilometers off the coast of Incheon. Their combined capacity accounts for about 14% of the Korean government’s target of installing 10.5 GW of offshore wind by 2030.
The schedule of a single project could therefore have a material impact on the national target. Progress in Incheon will serve as an important measure of Korea’s ability to translate its offshore wind policy into operational generating assets.
From left: Per Mejnert Kristensen, CEO of Ørsted Asia Pacific; Philippe Van Hoof, Chairperson of the European Chamber of Commerce in Korea (ECCK); Rasmus Errboe, Group President and CEO of Ørsted; and Yoo Tae-seung, Country Manager of Ørsted Korea. Courtesy of Ørsted Korea
Turning 1.47 GW of licensed capacity into operating infrastructure
The two Incheon projects have obtained electricity business licenses, but construction has not yet been confirmed. Ørsted is conducting environmental impact assessments, site investigations and preliminary wind farm design while preparing to participate in Korea’s offshore wind auction.
The projects can move into construction only after the remaining development procedures have been completed and Ørsted reaches a final investment decision. The company expects completion in the early 2030s, provided that development proceeds successfully.
This timeline requires coordination with the government’s 2030 target. Authorities need to distinguish between licensed capacity and capacity that can realistically reach construction and commercial operation by 2030. Project-level delays must also be identified before they affect the broader deployment plan.
Offshore wind projects require substantial upfront capital and long development periods, making them highly sensitive to policy and financing conditions. Auction prices, long-term electricity sales arrangements, interest rates, exchange rates, equipment costs and construction expenses all influence commercial viability. Even licensed projects may struggle to reach a final investment decision when permitting and grid-connection schedules remain uncertain.
Errboe’s meetings with the chair of the National Assembly’s Climate, Energy, Environment and Labor Committee and senior officials from the Ministry of Climate, Energy and Environment should be viewed in this context. Before committing capital, a global developer must assess the stability of government policy, the predictability of approval procedures and the durability of the project’s revenue structure.
The Incheon projects require assessments covering marine ecosystems, bird migration, fishing activity, shipping routes and subsea cable corridors. Delays in decisions or additional review requirements can affect engineering, procurement and auction schedules.
Policy performance should therefore be measured by how efficiently licensed projects move toward final investment decisions and construction. Korea’s offshore wind legislation must provide developers with clear standards, designated decision-making authorities and predictable review schedules.
Grid and port infrastructure will also determine whether the projects can proceed. Delivering 1.47 GW of offshore generation to consumers will require offshore substations, subsea cables, onshore connection facilities and transmission upgrades to be completed in step with the wind farms.
Ports must provide sufficient space and load-bearing infrastructure to store and assemble large turbines, blades and foundations. Installation vessels, maintenance bases and skilled workers will also be required throughout construction and operation.
The central and local governments should coordinate these facilities with individual project approvals. A credible offshore wind strategy must integrate wind farms with transmission networks, ports, vessels and workforce development.
Converting Korea’s supply-chain record into a long-term industrial base
Ørsted said it has introduced approximately KRW 3.5 trillion worth of Korean equipment and services into its global offshore wind projects over the past decade. The figure shows that Korean companies in shipbuilding, steel, subsea cables and electrical equipment already have the capabilities to participate in the international offshore wind supply chain.
If the Incheon projects proceed, Korean companies could expand from equipment supply into engineering, installation, operation and maintenance. Experience gained from a large domestic project could also help them secure contracts in other Asian and European markets.
Investment in production facilities and skilled workers, however, requires a stable project pipeline. Irregular procurement makes it difficult for suppliers to expand manufacturing capacity or retain specialist personnel. Korea’s industrial strategy should consequently assess domestic participation through technology accumulation, employment, research and development, and export potential as well as local procurement ratios.
Community engagement will also influence the projects’ progress. The effects of wind farms and subsea cable routes on fishing activity and the marine environment must be disclosed transparently, with local residents and fishing communities involved from the early stages of development.
Local benefits should extend beyond one-time compensation. Participation by regional companies, port and maintenance facilities, skilled employment, community benefit funds and revenue-sharing arrangements can create a more durable economic relationship between offshore wind projects and their host communities.
Ørsted estimates that the completed projects could generate renewable electricity equivalent to the consumption of approximately 1.4 million households. The value experienced by local communities will also depend on employment, industrial investment, environmental management and the distribution of project benefits.
Errboe’s visit does not mean that Ørsted’s investment has been finalized. The projects must still complete their environmental assessments, secure auction support, establish grid-connection plans, conclude community consultations and supply-chain agreements, and obtain a final investment decision.
Korea has significant offshore wind resources and an advanced manufacturing base. The progress of Incheon Offshore Wind 1 and 2 will show whether the country can convert these strengths into large-scale generating infrastructure and a globally competitive offshore wind industry.
