After years of slow progress, the Republic of Korea is eager for a breakthrough in development of the country's wind resource. Wind capacity reached 233 MW last year, but the aim is to increase that by more than a third in 2009, according to government sources. Some call the target overly ambitious. The government, however, appears bent on convincing sceptics, having announced a plan to boost the proportion of renewables in the total energy mix to 4.3% in 2015, 6.1% in 2020 and 15% in 2030, compared to 2.4% in 2007.
One-third of the KRW 111.5 trillion ($74 billion) cost of the initiative through 2030 will be paid by the state, with the rest is to come from private investors. The government is also promising to set a 2012 target and by then introduce a renewables investment fund and amendments to any regulations hindering renewable energy growth.
The determination to create a domestic market can only aid Korea's budding wind turbine and turbine component manufacturers as they continue to penetrate the global wind sector. In December, contracting and engineering firm Doosan claimed to be the first company in Asia to be developing a 3 MW offshore wind turbine and in January industrial machinery manufacturer Unison erected a prototype 2 MW onshore turbine for testing throughout 2009. The company, which already markets a 750 kW wind turbine internationally, is in negotiation with potential customers for the new turbine, according to Unison's Hyunjin Kim.
The Korean wind market is already supported by a fixed power purchase price of KRW 107.29/kWh ($0.072/kWh) that decreases annually by 2%. Other support includes generous help with installation costs; low interest loans for manufacture and purchase of wind power plant, which companies have five years to start paying back over a ten year repayment period; and a corporate tax exemption of 20% of the cost of an installed wind farm, according to quasi-governmental agency Korea Energy Management Corp.
Last year, market prices for electricity were so high in Korea that Gangwon Wind Power (GWP), the operator of the country's largest wind farm, a 98 MW installation in Gangwon province, shunned the fixed power price on offer and chose to sell its electricity directly through the electricity exchange, says Woonki Sung of American firm Darby Overseas Investments, which has acquired a 32.4% ownership stake in GWP. At the same time, 2008 was an excellent wind year. "We anticipated net income of the company to be about KRW 6 billion ($4 million), but the actual net income of the company for 2008 came to KRW 12.9 billion ($8.6 million)," states Sung.
Other companies are also betting on Gangwon province: in November, Japan's Eurus Energy Group and Korean engineering and construction corporation Posco inaugurated the 40 MW Taegisan Wind Farm, using 20 Vestas 2 MW turbines.