Ulsan's floating offshore wind farm power generation plan has been reduced from the originally planned 6.2 GW to 3.7 GW. This is because the Firefly consortium, led by Norway's Equinor, and the Gray Whale consortium, comprising developers from the United Kingdom, France and South Korea, have withdrawn from the project. A warning light has also been triggered for Ulsan's plans to pursue floating offshore wind as a core future business. According to Ulsan on the 8th, the Firefly consortium and Gray Whale consortium have withdrawn from the project. Although these consortiums did not formally submit project withdrawal notices to Ulsan, the city has treated their withdrawal as a done fact after the lead developers' withdrawal was confirmed. This was revealed in a press release provided by Ulsan regarding Mayor Kim Sang-wook's business trip to China. Mayor Kim made his first overseas trip since taking office at the invitation of Ming Yang Group, headquartered in Zhongshan, Guangdong Province, China. The purpose of the trip was to understand China's floating offshore wind technology trends. In the press release provided at that time, Ulsan's floating offshore wind power generation plan was introduced as 3.7 to 3.5 GW. This represents a decrease of 2.5 GW from the originally planned 6.2 GW floating offshore wind generation capacity. This 2.5 GW is equivalent to the output of 1.7 nuclear power plants at 1.44 GW each. Ulsan said the reduction is because the Firefly and Gray Whale consortiums, among five consortiums participating in the development of Ulsan's floating offshore wind farm, have withdrawn from the project. Firefly, led by Equinor, Norway's state-owned energy company, had been pursuing a 750 MW to 950 MW floating offshore wind farm 70 kilometers off Ulsan's coast. Firefly actively promoted the project in 2021 and was expected to begin construction the soonest among all projects. However, from the second half of last year through early this year, negotiations for a power purchase agreement with the government fell through due to the government's offered electricity rate being too low. Equinor subsequently abandoned the Ulsan project in late May. Equinor had submitted an investment letter of intent for 570 billion won in project costs, including 229 billion won in foreign direct investment, to Ulsan. Gray Whale involved Corio Generation from the United Kingdom, TotalEnergies from France, and SK ecoplant in a consortium. The investment letter of intent was drawn up with plans to invest 12 trillion won, including 42.5 billion won in foreign direct investment, to develop 1.5 GW by 2031. However, Gray Whale withdrew from the project early this year, citing reduced project viability due to strengthened U.S. regulations, rising global raw material costs and interest rates. Gray Whale had attracted expectations as the first domestic floating offshore wind project but withdrew due to worsening external conditions. According to the city, the remaining three consortiums, Haewoori floating offshore wind power generation 1, 2 and 3 (Denmark, CIP), KF Wind (Spain, Norway), and Munmubaram (Sweden, Hexicon), are proceeding normally. Among these, Haewoori consortium is the most advanced, having successfully completed a power purchase agreement with the government early this year and preparing for construction start. Munmubaram and KF Wind are also known to be preparing for power purchase agreements. The withdrawal of Firefly and Gray Whale consortiums has dealt a major blow to the overall investment scale. The investment scale of the five consortiums was 570 billion won in foreign direct investment and 41.6 trillion won in total project costs. This has been reduced to nearly half, with 298.5 billion won in foreign direct investment and 23.9 trillion won in total project costs. Attention is now focused on whether new consortiums will participate in the future development of Ulsan's floating offshore wind farm. An Ulsan city official said, "Ulsan has worked to create an investment environment by proposing to the government institutional improvements such as significantly lower public water surface usage fees compared to other regions and relaxed community acceptance requirements for the smooth promotion of floating offshore wind projects, but the situation remains challenging. Accordingly, when the direction of government policy becomes clear, comprehensive plans including attracting new investors and redesigning the power generation complex can be established."
Original Korean article: Ulsan Jeil Ilbo
English brief by Korea Wind Intelligence, koreawindintel.com
