National Growth Fund’s First Project ‘Sinan Ui’ to Drain 5.3 Trillion Won Over 20 Years… Electricity Sales Only 25%, Lacks Economic Viability

"REC Revenue Accounts for 75% of Total"


Kim Heonseung: "Business Viability Review Inadequate... Project Background and Responsibility Must Be Reported"

There are concerns that the “Sinan Ui Offshore Wind Power Project,” the first initiative funded by the National Growth Fund, is proceeding without sufficient improvement to its business viability, potentially shifting more than 5 trillion won in Renewable Energy Certificate (REC) subsidy costs over the next 20 years onto the public.

Aerial view of Shinan Wooi Offshore Wind Farm. Korea Midland Power Co.

According to data submitted by Kim Heonseung, a member of the National Assembly's Climate, Energy, Environment, and Labor Committee from the People Power Party, which was provided by Korea Development Bank on October 5, it is estimated that between 2029 and 2048, only 1.8288 trillion won (25.8%) of the projected 7.0939 trillion won in operating revenue from the Sinan Ui Offshore Wind Power Project will come from electricity sales. In contrast, REC sales revenue is expected to reach 5.2651 trillion won, accounting for 74.2% of the total. This means the REC income structure is roughly three times larger than that from electricity sales.

According to Assemblyman Kim, the Sinan Ui Offshore Wind Power Project applies a 3.173 REC multiplier for offshore wind, increasing the proportion of REC support over electricity sales. He pointed out that the project is structured to rely on long-term REC subsidies to support its revenue, despite insufficient economic viability. While project operators are guaranteed stable revenue, rising electricity costs are expected to increase the financial burden on the public.

The Sinan Ui Offshore Wind Power Project is a 390 MW (megawatt) project with a total investment of 3.4 trillion won. Although the project was rejected in the 2024 preliminary feasibility study by the Korea Development Institute (KDI) due to concerns over insufficient economic viability, potential output limitations, and the suitability of large turbines, it was relaunched as the first project under the National Growth Fund after its investment surged by around 30%.

Assemblyman Kim also highlighted other unresolved issues, such as low stability in electricity supply, risks associated with weak ground conditions, and problems relating to military radar shielding.

He stated, “It is questionable whether it is responsible policy to push ahead with the project without sufficiently confirming improvements to business viability, grid issues, agreements with the military, and ground safety, thereby passing on more than 5 trillion won in REC support costs to the public over 20 years. Project viability, curtailment risks, military consultations, ground safety, and any additional costs must be thoroughly re-examined with relevant agencies, and both the background and responsibility for this project must be reported to the National Assembly.”

This content was produced with the assistance of AI translation services.