2.2 GW Offshore Wind Auction Set for Second Half... 4 GW Competitive Market Opens This Year

The government has finalized the volume for offshore wind competitive bidding in the second half of this year at 2.2 GW. Including the 1.8 GW offered in the first half, the total bidding volume for the year will reach 4 GW, putting it on par with that of leading countries overseas. The plan is to increase bidding volumes to improve project developers' ability to forecast investments while also encouraging lower power generation costs.

The Ministry of Climate, Energy and Environment announced on October 30 that it would issue a notice for the "2026 Second-Half Competitive Bidding for Fixed-Price Offshore Wind Power Contracts." The total volume for the second-half bidding is approximately 2,200 MW, divided into 1,700 MW of fixed-bottom offshore wind and 500 MW of floating offshore wind. The fixed-bottom portion consists of 1,400 MW for general bidding and 300 MW for public-led bidding.

A 9.6 MW wind turbine installed at Jeonnam Offshore Wind Farm Phase 1

As in the first half of the year, the bidding will be conducted across three tracks: general fixed-bottom, public-led fixed-bottom, and general floating offshore wind. Under the public-led track, public institutions must hold at least a certain equity stake, helping ensure reliable project implementation and greater acceptance among local residents while encouraging the use of domestic supply chains for key equipment. The bid price caps have been lowered slightly from the first half. The cap for fixed-bottom offshore wind was reduced by 1.34% to KRW 168.937 per kWh, while the cap for floating offshore wind was lowered by 0.63% to KRW 174.003 per kWh. The adjustments reflect a comprehensive assessment of domestic and overseas forecasts for the levelized cost of energy (LCOE) for offshore wind, external conditions such as exchange rates, and the bidding competition ratio.

In line with the "Mid- to Long-Term Offshore Wind Bidding Roadmap" announced last June, the government has increased this year's bidding volume to 4 GW. The aim is to create a larger bidding market than in previous years to enable economies of scale in project development and reduce companies' investment uncertainty through a stable supply of projects. The government also plans to expand the infrastructure needed to support offshore wind deployment. Measures will include expanding shared grid connection facilities and related infrastructure such as ports and vessels, providing permitting and financial support, and introducing designated sites for planned development.

The government is also actively considering extending the term of fixed-price contracts from the current 20 years to 25 years in the next competitive bidding round. The aim is to reduce project developers' investment burden and project risks through longer-term contracts.

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