Korean wind power companies foresee tailwind from Taiwan, US

South Korean wind power companies such as SK oceanplant Co., HD Hyundai Electric Co. and CS Wind Corp. are expected to get a tailwind from Taiwan’s ambitious renewable energy policy, which looks set to remain on track after the island nation’s President-elect Lai Ching-te takes office.

Last Saturday, Lai, the current Taiwanese vice president, was elected as the country’s new president, marking the ruling Democratic Progressive Party’s third consecutive presidential win.

During his campaign, Lai proposed the most ambitious energy transition strategy among the four major candidates. He suggested that the share of renewables rise to 30% of the country’s energy mix by 2030 and to 60-70% by 2050.  

The country has announced plans to build offshore wind power facilities to generate a total of 15 gigawatts (GW) of electricity from 2026 to 2035, or 1.5GW per year. One gigawatt is enough to power 2.8 million households a year.

Under his leadership, Taiwan could draw up an additional strategy to accelerate its transition to renewables, industry watchers say.

Lai’s win in the presidential election bodes particularly well for SK oceanplant. The Korean maker of wind turbine substructures controls 44% of the market in Taiwan. The country has installed about 150 offshore wind turbines so far.

SK derives 100% of its offshore wind power-related sales from Taiwan.

This year, Taiwan is set to hold auctions to build wind turbines for its two large-scale offshore wind farm projects: Formosa 4 for 495-megawatt (MW) and Feng Miao PJT for 500MW.

Korean wind power companies seem to be in an advantageous position over their Chinese rivals amid the conflict between Taiwan and China, according to industry watchers.

The president-elect’s party stands against mainland China’s one-China principle.

ROSY OUTLOOK FOR SK OCEANPLANT

According to FnGuide, a research company, SK oceanplant is forecast to exceed 1 trillion won ($751 million) in sales this year for the first time in its history with an operating profit of 97.8 billion won.

By 2025, its sales and operating profit are projected to spike to 1.2 trillion won and 126.8 billion won, respectively.

In addition, the growing wind power market in the US is painting a bright outlook for Korean wind turbine equipment makers.

Vestas Wind Systems, the world’s largest wind turbine manufacturer, bagged its largest-ever quarterly orders in the fourth quarter of 2023. That translates into a total of 6.9GW of electricity, including 4.6GW for the US.

CS Wind supplies wind turbine towers to Vestas, which accounts for about half of its sales.

Its revenue is forecast to surpass 600 billion won in the current quarter, up from the quarterly average of 300 billion-400 billion won in recent years. 

Other Korean companies tipped to benefit from the global transition to renewables include HD Hyundai Electric, Hyosung Heavy Industries Corp. and LS Electric Co.

They produce power transformers used for wind turbine generators, as well as for solar power plants and grid infrastructure.

Write to Sang-Hoon Sung at uphoon@hankyung.com
 


Yeonhee Kim edited this article.