HOW OFFSHORE WIND DEVELOPMENT

CAN SUPPORT COASTAL REGENERATION

GLOBAL OVERVIEW AND BEST PRACTICES FOR SOUTH KOREA

1 GWEC.NET
The Global Wind Energy Council (GWEC) is the Attribution Lead Authors
global trade association for the wind power industry, How Offshore Wind Development Can Support The lead authors of this report were Yunsoung Kim, Eojin Son and
with over 1,500 members responsible for 70% of the Coastal Regeneration: Global Overview and Best Dawon Son from the Energy and Space team, and Olivia Burke,
world's wind capacity. Our members include major Practices for South Korea. Global Wind Energy Caroline Coccoli, Mary Harvey from the Carbon Trust team.
turbine manufacturers, energy companies, developers, Council. 2024. Contributing authors from the Carbon Trust team include Jade
and technology providers. GWEC advocates for the Dieumegard-Meyrick, Maria Gonzalez-Martin, Christina Starost.
wind industry globally, collaborating with Acknowledgement
organisations like the IRENA, IEA, local associations Energy and Space is a distinguished private research institution that
and development banks to help governments and This report was commissioned by the Global Wind crafts solution-driven policies through structured economic and social
policymakers unlock wind energy's full potential. Energy Council (GWEC). The Carbon Trust set out the science methodologies. Our focus is grounded in spatial planning for
core economic benefits and wider social and renewable energy in maritime and rural areas.
GWEC’s mission is to ensure that wind power fulfils its environmental effects of offshore wind development,
role as one of the key technology solutions to today’s researched global best practices, approaches and https://www.energyandspace.kr/
energy and climate challenges, forming the backbone mechanisms for ensuring that offshore wind
of a new clean energy system and enabling trillions of development supports local, coastal regeneration, and
dollars of investment while providing substantial set out recommendations for the South Korean context.
economic and social benefits to host countries. Energy and Space conducted a comprehensive
analysis of the potential economic impacts stemming The Carbon Trust has a mission to accelerate the move to a
Disclaimer from offshore wind development in South Korea. decarbonised future. We have been climate pioneers for more than
Copyright © May 2024 Their contributions further include providing key 20 years, partnering with leading businesses, governments and
information and insights on global best practices, financial institutions globally. From strategic planning and target
This document contains forward-looking statements. methodologies, and mechanisms, as well as offering a setting to activation and communication - we are your expert guide to
These statements are based on current views, nuanced overview of South Korean case studies that turn your climate ambition into impact. We are one global network of
expectations, assumptions and information of the facilitated invaluable policy recommendations. 400 experts with offices in the UK, the Netherlands, South Africa,
Authors. The Authors and their employees and China, Singapore and Mexico. To date, we have helped set 200+
representatives do not guarantee the accuracy of the The report was edited by the Global Wind Energy science-based targets and guided 3,000+ organisations in 70
data or conclusions of this work. They are not Council team: Rebecca Williams, Mark Hutchinson, countries on their route to Net Zero.
responsible for any adverse effects, loss or damage in Janice Cheong, and Thoa Nguyen.
any way resulting from this work. https://www.carbontrust.com/

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GWEC | How Offshore Wind Development Can Support Coastal Regeneration 2

 Foreword
As the demand for reliable, scalable and sustainable energy continues to accelerate in South Korea, the pursuit of
renewable sources have become imperative. The country currently stands at the pivotal moment of its energy
transition - beyond its net zero emission ambitions by 2050 and growing energy demands. With a staggering
624GW of technical potential for offshore wind, encompassing both fixed bottom and floating types, South Korea
stands as a beacon of abundant renewable energy opportunities. At COP28, together with aother 118 countries,
South Korea furthered its climate ambitions by joining the pledge to collectively triple the world’s renewable
energy capacity by 2030.

Offshore wind has not only emerged as a resilient renewable energy solution for South Korea, but it has also
become recognised as an important industrial opportunity, which can aid in the economic revitalisation of key
coastal regions. Recognising the need to quantify this opportunity and provide practical suggestions on how to
maximise this opportunity, the Global Wind Energy Council commissioned this report: “How Offshore Wind
Rebecca Williams Development Can Support Coastal Regeneration: Global Overview and Best Practices for South Korea”.
Global Head of Offshore Wind, The report examines the immense potential that offshore wind presents for South Korea’s coastal areas, with a
Global Wind Energy Council specific focus on its role in fostering economic benefits and attracting investment.

Although South Korea has announced a 14.3 GW installation target for offshore wind by 2030, there is less than
150 MW of current installed capacity. The market at present lacks a streamlined permitting process that provides
clear guidance, specifically on timing and to engage with local communities. At the same time, understanding of
the core benefits and opportunities of offshore wind neds to be strengthened among local stakeholders. Without
greater understanding, local stakeholders may not support offshore wind development, and coastal communities
may not be able to access the economic benefits offshore wind can create.

This report not only underscores the importance of offshore wind development for South Korea but also serves
as a call to action to the policymakers. It is an invitation to embrace a comprehensive and holistic strategy that
goes beyond energy production and facilitates sustainable economic and industrial development. Global
insights, in the form of international best practices, have been drawn from successful initiatives worldwide. This
report aims to provide guidance on how the country can harness the full spectrum of benefits offered by the
offshore wind industry, including unlocking job opportunities, creating investment into ports, re-invigorating
coastal communities and stimulating the entire supply chain. Concurrently, we hope to provide local stakehold-
ers with quantitative evidence that measures the true potential of offshore wind in South Korea's coastal commu-
nities.

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 4

Table of Contents
Exhibits 6

Tables 7

Acronyms 7

Executive Summary 9

Background and aims 12

Offshore wind energy benefits to coastal communities 16

Econometric analysis 23

Ensuring offshore wind development supports coastal communities: 31

lessons learnt and best practices

Conclusion and policy suggestions 49

Appendix 54

Methodology 54

GLOBAL WIND ENERGY COUNCIL

Global Wind Energy Council

Rue de Commerce 31
1000 Brussels, Belgium
T. +32 490 56 81 39
[email protected]

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 5

 Exhibits
Exhibit 1: Typical OFW project development process in South Korea 13

Exhibit 2: Generalised Social and economic benefits of offshore wind development 16

Exhibit 3: The distribution of human resources required along the value chain to develop a 500 MW offshore wind farm (Rearranged from IRENA) 17

Exhibit 4: Map of National Ports. Source: Operation Authority 21

Exhibit 5: Structure for the Cost break down of CapEx and OpEx 23

Exhibit 6: Share of Supply Chain Components in Investment (Fixed Bottom OFW) 24

Exhibit 7: Share of Supply Chain Components in Investment (Floating OFW). Rearranged from NREL (2023) 24

Exhibit 8: Cost Breakdown of Port Construction Cost (%) 25

Exhibit 9: Gross Value-added for CapEx 26

Exhibit 10: Gross Value-added for OpEx 27

Exhibit 11: Full-Time Employment for CapEx 28

Exhibit 12: Full-Time Employment for OpEx 28

Exhibit 13: CapEx GVA – Port 29

Exhibit 14: CapEx-FTE 29

Exhibit 15: Port of Esbjerg 33

Exhibit 16: Port of Taichung 35

Exhibit 17: Mokpo and Sinan 37

Exhibit 18: Humber offshore wind industrial cluster 39

Exhibit 19: Incheon Region 42

Exhibit 20: Gunsan City region 43

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 6

 Tables
Table 1: Types of jobs in OFW Development. Source: IRENA (2018); GESI (2022) 18

Table 2: Specifications for International Trading Ports in South Korea (Operated by MOF). Source: MOF (2020) 21

Table 3: Estimates of total investment required for wind in South Korea (KRW). Source: NREL (2021) 24

Table 4: Industrial Port opportunity for Mokpo and Sinan, South Korea. 38

Table 5: Offshore wind farm pipeline in Incheon. 42

Table 6: Industrial cluster opportunity for Incheon Metropolitan City, South Korea. 44

Table 7: Industrial cluster opportunity for Gunsan City, South Korea. 45

Acronyms
DK Denmark EIA Environmental Impact Assessment
IO Input-Output EU European Union
IRA Inflation Reduction Act RPS Renewable Portfolio Standards
MW Megawatts RECs Renewable Energy Certificates
GW Gigawatts FTE Full-Time Equivalent
GVA Gross Value Add OFW Offshore wind
O&M Operation & Maintenance OWF Offshore wind farms
CapEx Capital Expenditure MOTIE The Ministry of Trade, Industry and Energy
OpEx Operating Expense MOF The Ministry of Oceans and Fisheries
EBL Electricity Business Licence UK United Kingdom
ESG Environmental and Social Governance

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 7

EXECUTIVE SUMMARY
Executive Summary
Offshore wind (OFW) is a reliable, scalable sustainable source of electricity, Assuming that by 2030, a total of 14.3 GW of OFW farms will be constructed, the
and many countries around the world are pursuing commercial deployment to report finds that the gross value added for a fixed OFW project is approximately
support the transition towards a carbon-neutral society. The South Korean 45.3 trillion won for 7 years, and for floating OFW project, around 41.7 trillion
government has set a target of reaching 14.3 GW of OFW before 2030, and as of won to the Korean economy.
2023, the country has 140 MW of installed capacity across six windfarms.
Each year during the Operations & Maintenance (O&M) phase, the report finds
Despite this ambitious target, commercial OFW development is experiencing that 87.26 billion won for a fixed bottom and 57.82 billion won worth of gross
delays, due in part to a lack of local acceptance, coordination among multiple value added can be estimated (Exhibit 11).
stakeholders within the development process and wider policy outlining economic
benefits. Offshore wind is expected to create in total 770,200 jobs, including 376,200 jobs
in fixed OFW and 394,000 jobs in floating OFW as a result of CapEx (Capital
Beyond decarbonisation, offshore wind can offer South Korea other economic, Expenditure) over the project lifecycle of the 14.3GW of OFW farms. For the
social and environmental benefits. Commercial-scale offshore wind deployment O&M phase, for the year of 2030 alone, it is estimated that 11,689 FTEs can be
will require a significant mobilisation of the workforce as well as development of created annually in bottom-fixed OFW, while there would be 5,917 FTEs created
major infrastructure, creating employment opportunities not only offshore, but in in floating. Many of these jobs, especially in the construction, installation and then
ports, the surrounding coastal communities and across the wider supply chain. O&M phase lasting the project lifetime, would be locally deployed.
These benefits are particularly important for South Korea, whose coastal cities and
towns have seen declining populations, low birth rates and internal migration to Finally, this report highlights best practices, approaches and mechanisms for
cities by the younger populations over the past several years. ensuring offshore wind development supports coastal regeneration, based
on case studies from more mature offshore wind markets. These best practices
The anticipated scale-up of offshore wind development serves as a window of include:
opportunity for the country to pursue economic and social regeneration along its
coasts. But seizing this opportunity will require a well-established policy
framework and support from regional and national institutions. Offshore wind
development can support coastal regeneration, but this will require planning,
stakeholder engagement, and collaboration between government and industry.

This report sets out the core economic and wider social and environmental
benefits of offshore wind development and discusses how these benefits could
be leveraged in order to achieve coastal regeneration. The report also highlights
the potential economic impacts of offshore wind development in South Korea,
using an input-output (IO) analysis to estimate the expected value-added and
employment for the construction of 14.3 GW of OFW planned for 2030.

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 9

Revitalisation of existing assets Local governments
Brownfield sites, ports and existing industrial sites in coastal communities can be 1. Build a local regeneration vision with citizens early on to build social
redeveloped to support offshore wind. The redevelopment of these assets requires acceptance and lasting political support for OFW developments.
local jobs – from project planning, construction, to manufacturing of components.
2. Build the workforce capacity with local research institutions and other
Innovation and efficiency through industrial clusters knowledge partners, noting that local municipalities can act as a bridge
Ports are utilised throughout the lifespan of the offshore wind farm and create between the industry sector and provide necessary public financing and
economic benefits due to the cluster of industry and developers. This streamlined support.
supply chain and cluster can create jobs and stimulate local economic growth;
however, it is key for decision makers to consider a long-term approach to 3. Establish inclusive governance of the cluster with stakeholders to bridge
development. the gap to engage with public councils in determining the future of industrial
clusters.
Technical upskilling through education, training
To meet OFW targets, investment is required in local training centres, partnerships 4. Strengthen international networks between local governments that can be
with further education institutes and training programmes with industry utilised to enhance the capacity to plan and implement effective climate
stakeholders to increase and specialise the workforce in coastal communities. action at the local level.

Recommendations for the regeneration of coastal communities National government

Based on these best practices and lessons learnt, we outline main recommendations 1. Expand the number of Free Economic Zones to enhance an Offshore Wind
for the South Korean government, across different ministries, to ensure that offshore Industry Cluster and to provide a competitive playing field for FDI, which
wind development helps to support the regeneration of coastal communities. The could translate into job creation and regional economic growth.
recommendations are categorised according to government stakeholder
(i.e national, local, both governments). 2. Working with local government, industry and local stakeholder communities to
develop standardised guidelines for engagement, considering existing practices
in community engagement and codifying them into regulation.

3. Consider the introduction of a tax credit system, or a similar incentive, for

the wind power supply chain.

4. Prepare long-term plans on port and grid infrastructure for offshore wind to help
developers make informed investment decisions.

Both local and national governments

1. Carry out an assessment of coastal communities at a local and national level,
including an understanding of the baseline status of economic, social, environ-
mental factors, including cost-benefit analysis to determine the areas which would
benefit most from strategic investment.

2. Develop a national plan for coastal community regeneration, coordinating with

local authorities, communities, and industry for shared understanding of impacts
of different stages of offshore wind projects to local communities.

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 10

BACKGROUND AND AIMS
Background and aims
Aim and scope of this study
As of 2023, South Korea has 125 MW1 of installed Finally, OFW development is largely only
fixed-bottom OFW, however, the government has considered in energy policy; the government has yet
established an ambitious goal of 14.3 GW of OFW by to establish a comprehensive and visionary industry
2030, which means there is a considerable effort policy to support the sector. This has resulted in
required to meet expectations. insufficient support for offshore wind development
from the industrial sector more broadly.

.
The challenges associated with the current projects can
be attributed to several factors. This report aims to:
Set out the core economic benefits and wider
Firstly, the process for establishing a new offshore wind social and environmental benefits of offshore
farm is developer-led, also known as an ‘open-door wind development and discuss how these
procedure’. Unlike in a government-led development benefits could be leveraged in order to

.
scheme, a private developer selects potential project achieve coastal regeneration (Sections 1-3).
sites and applies for an Electric Business Licence (EBL)
and other required permits to relevant government Showcase the potential economic multiplier
agencies. However, there is insufficient standardisation effect of OFW as an industry by using an
and guidance2 as to best practice for local community input-output (IO) analysis to estimate the
engagement, compensation, who are the key expected value-added and employment for
stakeholders to engage, what levels of governments the construction of 14.3 GW of OFW planned

.
need to be engaged and other issues of concern, for 2030 (Section 4).
including difficulties in coordinating with governmental
bodies. Highlight best practices, approaches and
mechanisms for ensuring offshore wind
At present, local acceptance for OFW could be development supports local, coastal regeneration,
improved. Guidelines for engagement strategies where based on case studies of similar efforts around the
residents can become involved in the process of world (Sections 5-6).
developing projects are not sufficient.345678 The potential
benefits of offshore wind are not well-known enough
among the public, and when benefits are communicated,
they can be met with distrust.

1
https://www.epj.co.kr/news/articleView.html?idxno=33613
2
https://www.motie.go.kr/kor/article/ATCL3f49a5a8c/167096/view
3

4
https://www.researchgate.net/publication/357931744_A_Study_on_the_Fishermen%27_Acceptability_of_Offshore_Wind_Farms
5
https://www.motie.go.kr/kor/article/ATCL3f49a5a8c/163153/view
6
https://www.researchgate.net/publication/372339303_Searching_for_Ways_to_Manage_Public_Conflicts_for_Sustainable_Offshore_Wind_Power_Development
7
https://www.researchgate.net/publication/341010305_A_Study_on_Local_Acceptance_of_Offshore_Wind_Farm_Focus_on_Maldo_Gunsan
8
http://www.keaj.kr/news/articleView.html?idxno=4964

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 12 12

GWEC | How Offshore Wind Development Can Support Coastal Regeneration
 Global status of offshore wind energy Overview of the South Korean
Offshore wind plays a crucial role in the energy transition by providing a offshore wind energy market
reliable, scalable, and sustainable source of electricity, contributing to the
reduction of greenhouse gas emissions, and fostering economic Renewable energy policy and targets
development and innovation in the renewable energy sector. There has In 2017, the South Korean government announced the Renewable Energy 3020
been significant scale-up of offshore wind globally over the past two Implementation Plan 14 which articulated specific deployment targets for the first
decades; there is now over 64 GW installed.9 Countries with notable case time (20% of electricity produced by renewables by 2030). In 2023, this goal was
studies are Denmark and the United Kingdom. Denmark today has over confirmed by the 10th Basic Plan for Electricity Supply and Demand Plan 15 , which
2 GW of offshore wind installed and was the location of the first offshore states that 30.6% of the electricity production should come from renewables by
wind farm Vindeby in 1991 which is formed of 11 turbines and generating the end of 2036. The country’s OFW target was also updated to 14.3 GW by 2030.
5 MW.10 The United Kingdom commissioned its first offshore wind farm in
2000 and is the second largest offshore wind market with capacity of over Planned and operational offshore wind
14 GW.1112 Due to this commercial scale-up, offshore wind has not only As of 2023, there are six fully operational wind farms with a combined capacity of
become a significant economic driver for countries at a national level but 158 MW. The country has an estimated project pipeline of more than 14 GW for
has also helped reshape their coastal communities through the the period between 2022 to 2035, and the South Korean OFW market represents a
introduction of a new industry and accompanying initiatives. sizable portion of OFW activity in the Asia-Pacific region outside of China.

.
Commercial-scale offshore wind development can support: The current permitting process can take between seven to ten years and

..
Job creation in order to support the development, construction and operators must obtain various licences, such as the EBL, through 29 law and more
operations of wind farms than ten government organisations. A total of 84 projects representing 27.8 GW

..
Infrastructure development for ports and other access infrastructure have acquired EBLs up to the end of 2023, with the majority of the planned
Increased opportunities for the local supply chain projects located in the areas of South Jeolla province, followed by Busan and

.
Diversification and transition of the local economy Ulsan.16
Development of education and research opportunities
Indirect benefits to local economies such as boosts in associated Exhibit 1: Typical OFW project development process in South Korea 17
travel and accommodation sectors
Offshore wind development can act as a job catalyst, providing access to 1-2 years >1 year ~3-4 years <1 year ~1 year
renewable energy as well as enabling other socio-economic benefits in the
region.13 However, collaboratively, governments and the OFW industry need to
consider planning, stakeholder engagement, infrastructure development Consultation with the Apply for initial PWOP Apply for EBL to Approval of licenses Negotiate and sign Final investment
including construction and refurbishment, and training and education of the local local municipality and for the permission to reserve grid capacity and suit of impact PPA with a utility or a decision and finalising
relevant stakeholders install a LiDAR for 12 and site exclusivity for assessments corporate, over future sale construction contracts
workforce. The past two decades of industry operation in Europe provide and identify sites months wind assessment 8 years. Conduct EIA of electricity. Utility electricity
several ‘lessons learnt’ regarding offshore wind development and coastal and various other sales can be supplemented
assessments required by the sale of RECs
regeneration. These lessons and best practices can and should be considered
in emerging offshore wind markets like South Korea.
Legend:

9
https://gwec.net/gwecs-global-offshore-wind-report-2023/
10
https://orsted.com/en/insights/white-papers/making-green-energy-affordable/1991-to-2001-the-first-offshore-wind-farms
Site Selection and Surveys Phase EBL, EIA, and Permitting Phase Offtaking and Construction Phase
11
https://www.sciencedirect.com/science/article/abs/pii/S1364032114003839
12
13
https://www.un.org/esa/sustdev/natlinfo/indicators/methodology_sheets/oceans_seas_coasts/pop_coastal_areas.pdf
14
http://www.keaj.kr/news/articleView.html?idxno=4964
15
https://www.korea.kr/briefing/pressReleaseView.do?newsId=156547521
16
https://www.carbontrust.com/our-work-and-impact/guides-reports-and-tools/challenges-and-opportunities-for-south-korean-offshore-wind-supply-chain
17

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 13

 To speed up permitting, “The Special Act for Promotion of Offshore Wind
Power Development 18 ” has been proposed, but a two-year delay in
passing this bill to support a move to a government-led development
scheme has meant there is still uncertainty about future permitting for
projects. The change is expected to simplify the complex permitting
process, provide transparency, lower investment risks, and improve
government visibility. However, a number of issues around the
implementation of the bill still need to be resolved, including further
discussion and dialogue with stakeholders from the fishing industries,
civil society and government ministries.

As a coastal nation, South Korea has congested waters and must integrate
OFW development alongside existing marine activities such as shipping,
recreation and a sizable area reserved for national defence purposes.
The latest version of South Korea’s Maritime Spatial Plan has been in force
since 2020. The plan contributes to clarifying the division of marine space
into different uses. However, the proportion of energy development zones
is low, and adjustments need to be made if South Korea is to meet its OFW
target. It is recognised that more dialogue is needed with local
communities and fishermen should be involved as early as possible in the
planning process to limit future delays.

Offshore wind development support is provided through an RPS

(Renewable Portfolio Standards). Large conventional power producers
have renewables targets as part of their total power generation and this 12

can be met by purchasing Renewable Energy Certificates (RECs) per

MW/h. Different technologies as well as varying locations receive varying
levels of REC multipliers and the surcharge is transferred to the consumer
market through their electricity bills. Offshore wind has a REC weighting
of at least 2.0 and further additions can be given through factors such as if
more than 1% of the project is owned by local communities. Previously,
a Local Content Requirement rule gave an additional weighting to the
REC, but this was removed in 2023 by the Ministry of Trade, Industry and
Energy (MOTIE).

18
https://opinion.lawmaking.go.kr/gcom/nsmLmSts/out?sortCol=&amp;sortOrder=&amp;sugCd=21&amp;sgtCls=&amp;cptOfiOrgCd=&amp;searchStDtNew=&amp;searchEdDtNew=&amp;rslRsltNmL=&amp;rslRsltNmR=&amp;scCptPpostCmt=&amp;scPpsUsr=&amp;stDtFmt=&amp;edDtFmt=&amp;scBlNm=scBlNm_blNm&amp;scBlNmSct=

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 14

GWEC | How Offshore Wind Development Can Support Coastal Regeneration

OFFSHORE WIND ENERGY BENEFITS TO
COASTAL COMMUNITIES
 Offshore wind energy benefits to coastal communities
Offshore wind development can lead to economic, social and environmental benefits at all stages of
development – from planning, construction to (O&M) and decommissioning.

..
We define ‘core economic benefits’ as the direct, indirect and induced impacts of offshore wind development:

.
Direct impacts: Employment directly linked to the offshore wind project.
Indirect impacts: Wider supply chain employment and demand for sub-contractor goods and services.
Induced impacts: Economic expenditure relation to retail, hospitality and wider goods and services
linked to employment opportunities under direct and indirect impacts.

At a project level and industry level, these core economic benefits are often estimated and reported in terms
of gross value add (GVA) or number of full-time equivalent jobs.

With adequate public and private sector support, offshore wind development may also result in certain
environmental and social benefits. From an environmental point of view, governments are not only requiring
offshore wind developers to monitor and mitigate against negative environmental impacts, but also are
incentivising them to contribute to nature recovery efforts. Similarly, both government and industry can
develop programmes to ensure new jobs are accessible to a wide population and provide opportunities to
those who could transition into the workforce from other industries.

The following sections set out the core economic, environmental and social benefits of offshore wind
development in more detail.

Phase of Driver of
Activity Benefit Measures

Core Economic Economic

Construction Benefits (Jobs, W Gross Value Added)
(Direct, Indirect
Induced)
Labour Market
(Skills, Local Employment, Diversity)

Wider Social
Environmental (Community Investment)
Operation and
Maintenance and Socio-
Economic Environmental
Benefits (Biodiversity, Pollution)

Exhibit 2: Generalised Social and Economic Benefits of Offshore Wind Development

GWEC | How Offshore Wind Development Can Support Coastal Regeneration GWEC | How Offshore Wind Development Can Support Coastal 16
Regeneration
16
Core economic benefits in each stage
of offshore wind development
Offshore wind development requires significant resources, and each new Planning, manufacturing and construction and installation
deployment will create new jobs at each stage of the project development Project planning refers to the early work on site assessment, technical and financial
process. Exhibit 3 illustrates typical distribution of jobs across the development feasibility studies, environmental impact assessments and permit acquisition. Many
of an offshore wind farm. The following section will provide an overview of the of the jobs related to the planning stage are temporary and require specific
potential benefits that offshore wind can bring at each stage of development, knowledge. As such, large companies often utilise their international workforce to
as well as highlighting the wider economic benefits associated with offshore bring experience from completed projects. However, there are opportunities for
wind development. local employment, particularly as crew for survey work if local mariners are
supported to acquire relevant additional permits and qualifications. Additional
manual labourer support may be required for any necessary civil engineering work
Distribution of human resources required along the value
or infrastructure upgrades.
chain for the development of a 500 MW offshore wind farm
Manufacturing and construction of components locally can depend significantly on
Project planning
local content requirements, existing domestic industries and raw materials, the
1% expected pipeline of projects the site can manufacture for, and the ability to address
Decommissioning
Transport the logistical and costly impact of storing and transporting large components. Most
5% 0.10% jobs are created at this stage with major components required (e.g. blades,
Installation and substructures, substations). Employment in manufacturing and construction includes
grid connection a range of skills from low to highly skilled e.g., for electrical subcomponents. While
11% some of the skills will be difficult to acquire locally, factory jobs can provide
significant employment opportunities, and if there is a pipeline of projects it can be
TOTAL cost effective for companies to help support training initiatives including
2.1 Milion apprenticeships to address the skills shortage. South Korea could utilise existing
person-days ports and manufacturing and construction expertise, especially from shipbuilding
Operation and Manufacturing and industries.
maintenance procurement
Installation requires specialised vessels and qualifications. The installation of OFW
24% 59% foundations is a labour-intensive process, requiring trained ship crew and crane
operators. Turbines are moved to their designated location by a specialised vessel,
Source: IRENA set on the foundation, and connected to the grid.

Exhibit 3: The distribution of human resources required along the value

chain to develop a 500 MW offshore wind farm (Rearranged from IRENA) 19

19
https://www.researchgate.net/publication/341607083_IRENA_Leveraging_for_Offshore_Wind_2018

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 17

 Operations and maintenance
The O&M stage has the longest impact on communities, as the average lifespan of an individual
Offshore cable infrastructure plays a critical role in offshore wind OFW farm is 25 years. Local industries can be developed or supported through skilled workers
development and its effective planning is crucial to deliver electricity efficiently for the wind farms. There are also many low- and medium-skilled jobs (e.g. catering, cleaners,
and reliably from offshore wind farms to consumers. It is also of relevance to security personnel etc.) created. The creation of O&M training and education centres can support
local communities as the development, construction, and maintenance of more skilled jobs (see Sections 6.2 and 6.3).
offshore wind transmission infrastructure create job opportunities for residents.
This includes positions in engineering, construction, operations, and Table 1: Types of jobs in OFW Development. Source: IRENA (2018); GESI (2022)
21

maintenance, stimulating economic growth and providing skilled employment

opportunities. A good example is the recent £65m investment by JDR Cable Value chain Activity Jobs
Systems in a high voltage subsea cable manufacturing facility in
Northumberland which will create 170 jobs in the region and likely serve sites Site screening, feasibility study,
across Europe.20 Legal, real estate, and regulatory
Project environmental impact assessment,
specialists, financial analysts,
planning local community participation,
marine engineers, environmental
International firms are increasingly investing in training through centres and engineering design, and project
and geologists, as well as seafarers
apprenticeships to train local people. development

Procurement Design specifications, procurement Procurement specialists, engineers

Factory workers, quality control

Manufacturing and assembling
specialists, marketing and sales
Manufacturing nacelles, blades, towers, as well as
personnel, engineers, business
monitoring and control systems
managers and management executives

Transport Parts transport and shipment Driver, seafarers, and technical staff

Construction workers, technical staff,

Preparation of project farms, marine engineers, seafarers, health
Installation civil engineering, on-site assembly and safety specialists, logistics and
of parts quality specialists

Grid connection Cable and grid connection, Construction workers, technical staff,
and commissioning project commissioning engineers, health and safety specialists

Operators, electrical and marine

Operation and O&M for the project cycle engineers, construction workers, crane
maintenance (25 years in general) operators, seafarers, helicopter pilots,
technical staff, lawyers, business
managers and management executives
20

https://www.business-live.co.uk/ports-logistics/contract-build-65m-northumberland-factory-25396967 Dismantling the project, recycling, Construction workers, technical staff,

21
disposing of the equipment, and drivers, engineers, seafarers,
Decommissioning
clearing the site environmental scientists, health and
safety specialists

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 18

 To develop a 500 MW offshore wind farm, an estimated 2.1 million direct person-days is The wider offshore wind industry requires specialist skills and knowledge,
required, in addition to indirect or induced jobs related to the economic activity of the wind and collaborations and partnerships have been essential to ensure that the
farm such as hospitality. 22 local workforce is able to build this expertise. UK Research and Innovation
has funded the partnership between three universities in the Northeast UK
Wider environmental and socio-economic benefits – Hull, Durham and Sheffield – and Orsted and Siemens Gamesa
Renewable energy to provide students and researchers the opportunity to
Over the last several years, there has also been significant effort to address the impacts of learn about and support OFW innovation.27 Some industry leaders have
offshore wind development on nature and wildlife, as well as ensure that development launched their own apprenticeship programs to encourage people
contributes positively to people and places. without formal qualification or from adjacent industries to develop relevant
expertise. 28 Specific mechanisms to support upskilling through education
Environmental benefits and training are discussed in more detail in Section 5.
While any major development will have an impact on natural habitats, governments and
industry are increasingly looking at ways to both mitigate impacts and restore habitats. For Another method of increasing local opportunities is through community
example, the Netherlands’ 2022 auction for the Hollandse Kust West Site VI was based partly benefit funds, which have been set up by developers to support projects
on ecological innovation; projects that contributed to innovative nature recovery efforts with and initiatives for communities living closest to wind farms. For example,
widespread applicability across the industry were awarded more points. 23 The selected RWE invested £4.5million in 2022 from their wind energy community
project, Ecowende, aims to create a new ecological benchmark for offshore wind funds through 488 separate grants with the priorities chosen by local
development, so that projects can have a ‘net positive’ impact. Ecowende is also testing communities and the funds directly managed by local independent
innovative technologies and approaches, such as special UV paint on turbine blades to make organisations.29 Similarly, Ørsted have three offshore wind community
them more visible to birds and a corridor within the wind farm to preserve birds’ freedom of benefit funds in the UK which are administered by an independent charity,
movement.24 collectively awarding £9.5m to 680 projects improving community and
local environments.30
In other cases, project developers can support local environmental efforts to align with their
own environmental and social governance (ESG) ambitions. For example, 50% of sea marsh Infrastructure: the role of ports
habitats in the UK’s Humber Estuary have been lost since the 1900s in part due to local Finally, there can be additional social and economic benefits from the
commercial developments and reduction of sand dunes. Ørsted, in line with their goals for wider industrialisation and investment that comes from offshore wind
net-positive biodiversity impact across new projects before 2030, is working with Yorkshire development.
and Lincolnshire Wildlife Trusts to help with the restoration of the habitat and rewilding for
the lost oyster population.25 Blauwwind is a consortium that developed Borssele III and IV in
the Netherlands. The consortium is pursuing specific nature enhancement projects,
including an eight-year initiative designed to support the long-term monitoring of oyster
field development and survival and growth rate.26 While these initiatives are important,
integrating environmental initiatives into actual offshore wind developments, like Ecowende, 22
https://www.irena.org/media/Files/IRENA/Agency/Publication/2018/May/IRENA_Leveraging_for_Offshore_Wind_2018.pdf?rev=b341ac3b99e4481e826ba49f6b20c87e

are more likely to lead to industry-wide progress. 23

24
https://windeurope.org/newsroom/news/the-netherlands-run-another-successful-auction-based-on-non-price-criteria/
https://ecowende.nl/en/our-innovations/
25
https://orsted.com/en/who-we-are/sustainability/nature/net-positive-biodiversity-impact/humber-biodiversity-restoration
Social benefits
26
https://www.blauwwind.nl/en/news/2023/2/nature-enhancement-project
27
https://www.hull.ac.uk/work-with-us/research/case-studies/propelling-the-future-of-offshore-wind
Through specific policies and programmes, government and industry can also ensure that 28

offshore wind development contributes to wider social aims, like the just transition.
29
https://uk.rwe.com/press-and-news/2023-05-21-rwe-puts-uk-communities-first-with-45-million-funding-in-2022/
30
https://orsted.co.uk/about-us/corporate-responsibility/grants-and-sponsorship/community-benefit-funds
https://orstedcdn.azureedge.net/-/media/www/docs/corp/uk/hornsea-project-two/rsted-economic-impact-in-humber---may-2022---v9.pdf?rev=bb86b69faa1745398ec5579e812f51fe&amp;hash=1AD6593E223BD3BFA7998FFAC321A8D8

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 19

 OFW ports are key to offshore wind projects by providing a local, cost-effective location for planning, manufacture,
installation, and decommissioning capabilities. 31 Designing port infrastructure to support the expected project
pipeline is vital to ensure the laydown and quayside is large enough to accommodate the vessels and constructed
components. Requirements differ between floating and fixed operations and therefore the associated investment in
port upgrades and refurbishment may depend on the local strategy. In the UK, policies such as the 2023 announce-
ment for the Floating Offshore Wind Manufacturing Investment Scheme will provide up to £160 million in grants to
upgrade critical infrastructure and help increase the floating offshore wind supply chain.32

In many cases brownfield, or existing industrial sites, offer great potential for redevelopment as they are often
strategically valuable and well located.34 The sites can often be a priority site for planners, but the redevelopment is
often reliant on funding for regeneration and local policy. As offshore wind is deployed globally, and the size of the
industry is increasing, there is a focus on planning and assessment procedures before any consent is granted; this
often includes an Environmental Impact Assessment (EIA) to consider the biophysical, socio-economic, and other
effects of a development proposal. 33

There are also opportunities for ports to focus on O&M activities. These ports typically require less investment to
upgrade their facilities and their proximity to windfarms is the most significant factor in their selection. The number
of jobs and scale of investment in local communities varies, for example, the Port of Tyne in the UK operates the
O&M base for the 3.6 GW Dogger Bank Wind Farm which has specifically created 400 long-term O&M jobs and
over 50% of the investment to build the base was in local companies.34 In France, the construction of O&M facilities
for the 500 MW Fécamp offshore wind farm will create 100 long-term jobs with EDF Renouvelables utilising the port
for the lifespan of the wind farm, having used local companies from the Normandy region for 70% of the construction.35

Ports typically form a critical part of offshore wind cluster development and create economic benefits for the local
region through the concentration of OFW related companies, suppliers, and supporting institutions. Bringing
together manufacturers, service providers, and technology developers in proximity, clusters encourage
collaboration and coordination, leading to a more integrated and streamlined supply chain and allow for knowledge
sharing and collaboration. Hence, investment and consistent policy support in catalysing a cluster can be effective to
stimulate local growth and job creation.

Nevertheless, the associated costs that come with cluster formation and port upgrades are significant and therefore
need to be considered carefully by decision-makers to ensure that long-term local stimuli are created. Conducting a
thorough analysis to determine where the need, benefit, and impact are likely to be the greatest within any given
region is imperative.

31
https://danishshipping.dk/media/gbdme2zt/technical-report-socioeconomic-impacts-of-offshore-wind-01072020-3.pdf
32
https://www.gov.uk/government/publications/floating-offshore-wind-manufacturing-investment-scheme
33

https://radar.brookes.ac.uk/radar/items/6c7548dd-c768-4db8-9dce-7980c426c7a4/1/
34
https://doggerbank.com/supply-chain/dogger-bank-wind-farm-welcomes-local-supply-chain-to-port-of-tyne/
35
https://www.offshorewind.biz/2022/06/29/edf-opens-fecamp-operations-and-maintenance-base-in-france/

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 20 19

Status and opportunity for South Korean ports
The ports in South Korea are planned and managed by the Ministry of Oceans and
Fisheries (MOF) and categorised into trade ports and coastal ports. As of 2023, of
the total 62 ports in South Korea 31 are international trading ports. Among the 31 Table 2: Specifications for International Trading Ports in South Korea
international trading ports, 14 are constructed and operated by MOF, and the rest (Operated by MOF). Source: MOF (2020) 37
are constructed by MOF but operated by municipal governments. 36 In the case of
coastal and local ports, there are 12 ports constructed and operated by MOF and
19 ports constructed by MOF and operated by municipal governments. Ports in Ports Quay Length Capacity Laydown Area Laydown Area
South Korea are intricately connected to local communities as they often include or (m) (# of ship) (m²) Capacity (tonnes)
are in proximity to the 20 out of 44 total industrial complexes.

According to the 4th National Port Plan for South Korea, the South Korean Incheon 26,736 125 3,672,346 9,694,993
government aims to prepare ports under the increasing demand for digital
technologies for cargo management and sustainable development through Gyeongin 2,300 20 88,330 17,183,000
co-development with local communities. Major plans include diversifying port
functions, establishing smart ports with the latest and sustainable technologies and Pyeongtaek-Dangjin 14,424 64 2,313,295 6,940,645
establishing specialised ports for cargo and services.
Daesan 8,144 33 98,609 579,034

Janghang 330 2 1,535 124,605

Gunsan 7,806 39 1,446,021 4,991,310

.
Mokpo 5,999 28 49,422 2,931,730

Yeosu 692 2 - -

Gwangyang 25,525 108 1,998,549 3,997,097

Masan 6,824 29 666,653 1,999,959

Busan 32,561 163 2,987,697 19,243,865

Operation Authority
Ministry of Oceans and Fisheries
Local Municipalities Ulsan 20,521 116 1,223,811 3,630,856

Exhibit 4: Map of National Ports. Source: Operation Authority Pohang 12,032 51 1,406,915 4,615,964

36
Donghae-Mukho 4,477 23 190,970 597,260
https://www.sciencedirect.com/science/article/abs/pii/S2210539516300402
37
https://www.motie.go.kr/kor/article/ATCL3f49a5a8c/167096/view

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 21

ECONOMETRIC ANALYSIS
 Econometric Analysis
An Input-Output (I-O) analysis is used in this report to estimate the economic multiplier effect.
The underlying assumption of IO analysis states that intermediate goods used in producing final
goods are interconnected, creating impacts on production, value-added, and employment.
OFW has a sizable economic impact due to a value chain that spans diverse industries such as
construction, electrical, machinery, steel making, shipbuilding, etc.

This chapter analyses the value chain of developing OFW projects during the construction and
operations and maintenance (O&M) phases, estimates the cost for each phase, and derives and
applies coefficients for value-added and employment using the national input-output (IO) table
released by the Bank of South Korea.38 We use the terms “CapEx” for the construction phase
(all costs incurred until commercial operations begins) and OpEx for the O&M phase.

The structure for estimating the economic multiplier effect in this study is shown in Exhibit 5
below.

Cost Break Down of CapEx and OpEx

Fixed Floating
bottom20 Port
. OFW
OFW

Coefficients of each industries from I-O Table

GVA & FTE

Exhibit 5: Structure for the Cost break down of CapEx and OpEx

38
https://www.bok.or.kr/portal/bbs/P0000559/view.do?nttId=10065068&amp;menuNo=2&amp;pageIndex=1

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 23

Capital cost break down
OFW farm (fixed and floating)
When compared with the fixed bottom offshore wind, floating OFW shows a reduced
share of turbines in the CAPEX and, instead, shows an increase in the costs for
installing substructures. This results from relatively higher installation costs of
floating OFW from affixing floating bodies to the seabed with depths exceeding 60m.
Assembly and
Table 3. Estimates of total investment required Installation
6%
for wind in South Korea (KRW) Source: NREL (2021) 40 Contingency
8%
Substructure and
Floating Total Foundation
Category Fixed 37% Construction
Finace
Capacity 4% Decommissioning 2%
8,800 5,500 14,300
(MW, estimate) Lease Price
3%
Development & Project
Other 5%
Unit cost (/kW) 6,673,176 9,614,891 - Management 1%

Plant Commisioning 1%
Total investment Turbine Insurance During Construction 1%
(KRW million) 58,723,949 52,881,901 111,605,849 Electrical
24%
Infrastructure
13%
Total investment
(USD) 39 45,080.538 40,609.371 85,735.95 Exhibit 7: Share of Supply Chain Components in Investment
(Floating OFW). Rearranged from NREL (2023) 41

Assembly and
Installation Globally, over the past 1-2 years, the investment cost has risen 30% due to
10% Contingence the global supply chain bottlenecks resulting from macroeconomic effects.
9%
Substructure and However, these costs will likely decrease with the learning curve. 42
Foundation Lease Price
13% 5% Inflationary pressures in South Korea could also lead to an increase in unit
Construction costs of both fixed and floating OFW.
Finace
Decommissioning 3%
4%

Other 7% Development & Project 39

Electrical Management 2% 40

Infrastructure https://www.nrel.gov/docs/fy22osti/81209.pdf
18% Plant Commisioning 1% 41

Turbine https://www.nrel.gov/wind/offshore-supply-chain-road-map.html
- 34% Insurance During Construction 1% 42
https://www.dnv.com/focus-areas/floating-offshore-wind/commercialize-floating-wind-report

Exhibit 6: Share of Supply Chain Components

in Investment (Fixed Bottom OFW)
GWEC | How Offshore Wind Development Can Support Coastal Regeneration 24
Port
According to the Preliminary Feasibility Study, the CAPEX in the
The cost of constructing dedicated ports for OFW power generation is challenging to ascertain construction of Busan New Port is estimated to be USD 7.013 billion
through project-specific empirical data. In the analysis of port development, we have relied (KRW 9.1342 trillion). The cost structure is primarily classified into
on research findings related to harbour construction in South Korea and the United States, as Construction costs, Facility auxiliary costs, Compensations for Fisheries
well as CAPEX in Taiwan, generating assumptions for various scenarios.43 Rights, and contingencies. Construction costs have approximately 72%
share of the CAPEX and consist mainly of costs for civil engineering
Based on these data, the cost range for the construction of dedicated ports for OFW for this except for a small amount assigned to Electrical constructions. Supply
research is approximated, and the results are summarised in the table below. As depicted in chain analysis, as done for OFW cost breakdown, was not conducted
the table, the cost of constructing dedicated ports for a 14.3 GW offshore wind power complex for the analysis of port construction. Therefore, more in-depth cost
is anticipated to range between a minimum of USD 1,866.6 million and a maximum of USD analysis was not addressed in this study, which poses limitations for the
4,548.6 million. For simplicity, the case 2, based on South Korean data, was chosen for the analysis of economic effects.
analysis.

Category Case 1 Case 2 Case 3 Case 4 Transportation

16.1%
Total Investment 1,866.62 4,372.90 3,807.28 4,548.57
(USD million)

Case 1. Constitutes 2. 10% of the total project cost (South Korea) Science and
Case 2. Constitutes 5. 20% of the total project cost (South Korea) Technology Service
Case 3. Based on the estimated cose of port construction required for eveloping 30GW of OFW by 2030(US) 8.4%
The ratio for port construction and manufacturing specialized vessels is 70:30(%)
Case 4. Based on the cost of the maintenance and expansion of Taichung Port (Taiwan)

Electricity
Like the OFW cost breakdown, the estimation of the economic multiplier effect from the
3.7%
construction of the port and hinterland for OFW projects was also done by dividing Construction
estimates for existing port CAPEX according to the supply chain.44 In this analysis, 71.8%
costs were estimated based on the estimated share out of the total project budget while
referring to known costs and shares out of the total project budget from the US and
Taiwan. O&M of ports is marginal at only around 2-4% of the total investment cost for Exhibit 8: Cost Breakdown of Port Construction Cost (%)
OFW. Therefore, the economic multiplier effect focuses mainly on construction costs.

The composition of the CAPEX for port construction is based on each component's cost
structure for port development from KDI (2021) "Preliminary Feasibility Report for Busan
41

New Port 2". 41 However, the sectoral assignment of each constituent cost to industries was https://www.nrel.gov/wind/offshore-supply-chain-road-map.html
based on the research team's independent judgment and independent of the Preliminary 43

Feasibility Study Report. 44

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 25

Results CapEX GVA - Fixed Bottom OWP Unit: KRW

OFW farm (fixed and floating)

Manufacturing 21,272,395
The following section is split into gross value-added
effects and estimated job creation for CapEx and OPEX Construction 12,720,435
components in relation to 14.3 GW capacity from 2023 to
2030. It is unlikely that the total 14.3 GW pipeline will be Financial and Insurance activities 7,805,536
achieved and generating by 2030. However, the analysis
is simplified to give an indication of potential economic Professional, scientific and 3,492,925
benefits associated with OFW in South Korea. As there is technical activities
still uncertainty over the timeline for development and
construction, the analysis assumes a 7-year development 0 10,000,000 20,000,000
phase, with the multiplier effect from O&M coming into
effect from 2030. In addition, inflation and future discount Machinery and equipment n.e.c Electrical equipment Fabricated metal products
rates are not considered, and the total 8-year period is
treated as a single time frame.

CapEX GVA - Floating OWP Unit: KRW

Manufacturing 13,855,260
Construction 19,512,640

Financial and Insurance activities 6,101,577

Professional, scientific and 2,188,130

technical activities
0 10,000,000 20,000,000

Machinery and equipment n.e.c Electrical equipment Fabricated metal products

Exhibit 9: Gross Value-added for CapEx

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 26

 Assuming that by 2030, a total of 14.3 GW of OFW farms will be constructed, the gross value-added effect for a fixed OFW is approximately 45.3 trillion won for 7 years, and a
floating OFW is around 41.7 trillion won (Exhibit 9). The gross value added during the construction phase is the highest in the manufacturing sector for fixed bottom OFW,
followed by construction, financial and insurance, and professional, scientific, and technical activities.

For floating OFW, the construction sector had the most signicant effect, followed by manufacturing, financial and insurance, and professional, scientific, and technical activities.
The split among these professions, and thus the GVA, may change as floating technologies become better understood.

OpEx GVA - Fixed Bottom OWP OpEx GVA - Floating OWP Unit: KRW million / year
Industry Classiffication

Manufacturing 388,321 Manufacturing 586,074

Construction 0 Construction 0

Financial and Insurance activities 186,472 Financial and Insurance activities 281,434
Professional, scientific and 3,375 Professional, scientific and 5,094
technical activities technical activities
0 100,000 200,000 300,000 400,000 500,000 0 200,000 400,000 600,000
KRW million / year KRW million / year

Transpot equipment Machinery and equipment n.e.c Transpot equipment Machinery and equipment n.e.c

Electrical equipment Fabricated metal products Electrical equipment Fabricated metal products

Exhibit 10: Gross Value-added for OpEx

During the O&M phase, 87.26 billion won for a fixed bottom for one year and 57.82 billion won worth of gross value-added effect can be estimated (Exhibit 10). In this study,
the value-added effect was analysed from 2023 to 2030. The figure above illustrates the value-added effect of the O&M for 2030 alone. The reason for relatively lower
value-added effects in the floating OFW case is attributed to the assumed capacities of the commercially operating OFW farms, which are 8.8 GW and 5.5 GW, respectively,
with floating OFW being lower in the total capacity.

The gross value added is estimated to mainly come from manufacturing, financial, and insurance activities in both fixed bottom and floating. In other words, constant
maintenance during the O&M phase continues to create demands in the manufacturing sector, with constant work demands for financial and insurance-related services.

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 27

 CapEx FTE - Fixed Bottom OWP Unit: FTE
CapEx FTE - Floating OWP Unit: FTE

Manufacturing 125,400 Manufacturing 81,675

Industry Classification Construction 158,688 Construction 243,422
Financial and Insurance activities 71,966 Financial and Insurance activities 56,256
Professional, scientific and 20,182 Professional, scientific and 12,643
technical activities technical activities
0 50,000 100,000 150,000 200,000 0 100,000 200,000 300,000
FTE
FTE

Machinery and equipment n.e.c Machinery and equipment n.e.c

Electrical equipment Fabricated metal products Electrical equipment Fabricated metal products

Exhibit 11: Full-Time Employment for CAPEX

The full-time equivalent employment effect for the fixed bottom is around 376.2 thousand FTE; for floating, it is around 394 thousand FTE for the entire construction phase
(Exhibit 11). According to CAPEX, the job creation effect is expected to be 376,200 jobs in fixed OFW and 394,000 jobs in floating OFW. This is due mainly to the fact that floating
OFW creates more employment in the construction sector. By sector, fixed OFW creates approximately 159,000 jobs in the construction sector and 125,000 jobs in the
manufacturing sector, while floating OFW creates approximately 243,000 jobs in the construction sector and approximately 82,000 jobs in the manufacturing sector.

On the other hand, significant job creation is also expected in the financial and insurance sectors and professional, scientific, and technical sectors. The main reason for the
prominent job creation effect from the construction sector in floating OFW is that while the demand for manufacturing, finance, specialised science, and technology is mainly prop
ortional to the capacity of the OFW farm, the overall project cost is more considerable in flowing OFW. Simply put, floating OFW is expected to create more jobs during the
construction period compared to the fixed OFW. It is difficult to conclude that these newly created jobs will only be short-term, as constructing OFW requires a higher skill level than
low-skill level workers generally employed.
OpEx FTE - Fixed Bottom OWP Unit: FTE / year OpEx FTE - Floating OWP Unit: FTE / year

Manufacturing 5,851 Manufacturing 2,778

Industry Classification

Industry Classification
Construction 0 Construction 0

Financial and Insurance activities 5,795 Financial and Insurance activities 3,080
Professional, scientific and 43 Professional, scientific and 59
technical activities technical activities
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 0 500 1,000 1,500 2,000 2,500 3,000 3,500
FTE / year FTE / year

Transport equipment Machinery and equipment n.e.c Transport equipment Machinery and equipment n.e.c
Electrical equipment Fabricated metal products Electrical equipment Fabricated metal products

Exhibit 12: Full-Time Employment for OpEx

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 28
For the O&M phase, for the year of 2030 alone, it is estimated that 11,689 FTEs can be As seen in Exhibit 13, the total port investment cost for 14.3 GW can be seen as
created annually in fixed bottom OFW, while there is estimated to be 5,917 FTEs in approximately KRW 5,691,89 million (435.7M USD). The value added from port
floating wind (Exhibit 12). It is expected that there will be demands for key components CAPEX is estimated at KRW 3,478,851 (2,663.1M USD).
and materials during operation and maintenance which contribute to around half of the
total FTE to the manufacturing sector. Rest of the job creation effect occur in the financial When linking port construction with industry, the most significant relevance can
and insurance sectors and professional, scientific, and technical sectors with the former be found in the construction sector, followed by electrical equipment,
consisting of the majority of jobs created. professional science and technology, and transport equipment. Depending on
the investment cost size, the construction result appears to exceed 95% of the
Ports total value-added effect.
The economic multiplier effects that occur through port construction and O&M mainly
occur during construction. According to the Busan New Port preliminary feasibility
report, the total operating cost constitutes about 3% of the investment cost, with the CapEx - FTE
operational period estimated to be 25 years. Based on these findings, the value-added 1
and job creation effects of operation compared to the investment cost are relatively 11
small. Therefore, this study analysed the economic multiplier effects of port investment
Case 2 101
and operation with a focus on investment costs. The construction of an OFW port can be 3,366
diverse, such as renovating or expanding an existing port or creating an entirely new
one, but a specific approach is not specified in this study.

(100) 400 900 1,400 1,900 2,400 2,900 3,400

CAPEX GVA - PORT Unit: KRW milllion

Construction Electrical Equipment
100,797 10,963
Transport Equipment Professional, Scientific and Technical Activities
Case 2
3,365,692 Exhibit 14: CAPEX - FTE
1,399
The expected job creation effect from port construction is estimated to be 3,479
0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 people during the construction period (Exhibit 14). Most jobs are expected to
occur in the construction sector followed by the electrical equipment;
professional, scientific and technical activities; and transport equipment sector.
Electrical Equipment Professional, Scientific and Technical Activities Converting this to the annual average of the construction period, it can be seen
as approximately 700 people.
Transport Equipment Construction

Exhibit 13: CAPEX GVA – Port

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 29

ENSURING OFFSHORE WIND DEVELOPMENT
SUPPORTS COASTAL COMMUNITIES:
LESSONS LEARNT AND BEST PRACTICES
Ensuring offshore wind development supports coastal communities:
lessons learnt and best practices
While many ports and coastal communities globally are thriving, there are often Ensuring that local communities benefit from offshore wind development
some communities that have not yet shared in this development. Smaller coastal requires a collaborative approach between industry and government. Government
communities are often defined by slower economic growth than those located policies should provide a supportive framework and pipeline of projects to
either inland or around larger port and marine industries. Many coastal encourage private investment into large infrastructure projects. These in turn, can
industries, like tourism, are seasonal, which deflates average wages and support high quality, long-term, and diverse jobs with additional benefits through
investment over the course of the year. Declines in traditional industries such as industry programmes such as community funds and environmental restoration.
fishing and local shipbuilding, as well as a growth in affordable foreign holidays, The long-term success of coastal regeneration activities also depends on the extent
have contributed to reduced investment. As a result, many coastal areas can to which local industries, such as construction, oil and gas and fishing, can
have poor infrastructure and transport links, as well as outward migration of collaborate and adapt to the needs of the offshore wind sector.
younger people. This geographic isolation and changing population dynamic
further contributes to stagnation of the local economy.45 There is often a trade-off balance between low-cost development and local
investment. The cost of offshore wind development has decreased significantly
Coastal regeneration describes the various efforts that can be taken to restore over the past several years as a result of technological innovation, economies of
the economic, social and environmental characteristics of coastal communities. scale and interaction between the local and global supply chain. In short, some
In 2010, the Coastal Community Alliance, a non-profit organisation based in the services will be most efficiently delivered locally and in the country of
UK, asserted that coastal regeneration means more than just the creation of new development, and others may be delivered more competitively elsewhere. 48
jobs. Instead, the term signifies ‘giving a new, fresh lease on life to something
that is already there.46 In this sense, coastal regeneration involves revitalising all Despite this necessary tension between local and global, there are three main
of the aspects that make a coastal community unique. For example, coastal mechanisms that government and industry can employ to ensure that offshore wind
regeneration initiatives must not only consider the underlying challenges of development leads to economic, social and environmental benefits in local, coastal
economic deprivation, but also explore economic diversification; restore communities, and supports coastal regeneration overall.
physical assets (for instance, built assets like ports and manufacturing sites, and
natural assets like sand dunes); and support aspects that contribute to the social The primary mechanisms for supporting coastal regeneration through offshore

..
fabric of a particular place, such as social cohesion, historic and culture heritage wind development discussed in this report are:
and quality of life.47
Revitalisation of existing assets

.
The various benefits of offshore wind development, with the right support from Development of clusters to support innovation and efficiency
government and industry, could help support coastal regeneration efforts. In
Technical upskilling through dedicated education and training efforts
Europe, coastal economies have benefitted from the positive economic impact
of offshore wind in locations where the oil and gas sector previously provided a
significant number of jobs. For example, in Denmark, the Port of Esbjerg had
already transitioned from a key fishing port to one that serves the oil and gas
industry with several major companies based in the area. Since 2000, as the 45
https://researchbriefings.files.parliament.uk/documents/CDP-2022-0153/CDP-2022-0153.pdf
offshore wind sector began to grow, the port has managed to capitalise on the 46

existing infrastructure, provide additional investment and house companies https://www.coastalcommunities.co.uk/knowledge_hub_files/coastal-regeneration-handbook_7Inu.pdf

47
https://unhabitat.org/topic/urban-regeneration
across the entire offshore wind value chain. 48
https://www.esmap.org/key-factors-for-successful-development-of-offshore-wind-in-

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 31

 Revitalising existing infrastructure, and particularly ports, will be essential to support
most offshore wind development. The Port of Esbjerg in Denmark is one example of
port regeneration; formerly used exclusively to support oil and gas development.
Today, it serves as one of the primary ports for offshore wind development in the North
Sea. The Port of Taichung, Taiwan was transformed by foreign international investment
and today has become similarly crucial for offshore wind development in the
-
Asia-Pacific region. Similar regeneration approaches could be applied to South Korea’s
Mokpo port, which, given its geographic location, has the potential to service major
offshore wind development in South Korea and the wider region.

Developing clusters – place-based collaboration between government, industry and

academia – could also support the development of the local offshore wind supply chain
in a region with maritime heritage. While there are multiple examples of successful
- models around the world, the UK’s Humber Cluster now supports over one third
cluster
-
of the UK’s current offshore wind capacity.49 This report will examine the development of
the Humber Cluster to provide recommendations for Icheon city and Gusan City in
South Korea, which are similarly well located and connected to support wider industry
development regionally and nationally.

Finally, upgrading existing assets and developing clusters both require people with
specialist and technical skills. Governments and industry will have to work together to
ensure that the local workforce is duly supported to participate in the just transition.
This in turn, can lead to less risk and greater confidence in a given offshore wind market.

Revitalising ports and other existing assets

Commercial-scale deployment of offshore wind, and in particular, floating offshore wind,
will require significant port upgrades. Revitalising ports and surrounding
brownfield sites requires collaboration between port authorities and industry and
governments. Following restoration, ports can support the regional offshore wind supply
chain, in turn becoming a hub for development and increased economic productivity.

This section highlights the redevelopment efforts associated with the Port of Esbjerg and
the Port of Taichung, and outlines the factors which have contributed to their overall
success. In South Korea, Mokpo and Sinan is a region that has been identified as a
potential location for a new offshore wind port, which is well placed to service OFW
development in South Korea.

49
https://greenporthull.co.uk/what-we-do/humber-offshore-wind-cluster

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 32

Case study: Port of Esbjerg, Denmark

Exhibit 15: Port of Esbjerg

Port of Esbjerg
CASE STUDY Key information

A market leader with 22 GW of OFW shipped from Esbjerg since

2001, accounting for 80% of Europe’s installed capacity.

Location: Esbjerg, Denmark

Size of Port: 4.5m sqm2

OFW energy: Supplies 4.9 GW of OFW energy

Revenue: €29.1m in 2022 50

Regional strengths: Well-located along the Danish Coast to

service OFW sites in the North Sea

Supply Chain: 200+ companies with 10,000 employees across

entire wind value chain, e.g., R&D, manufacturing, transport,
pre-assembly, installation, and maintenance
The key competitive advantage of the Port of Esbjerg is its link between
Owner: Self-governing port owned by Municipality of Esbjerg production facilities in Northern Europe and offshore wind sites in the North Sea
since 2000 and surrounding waters. Leveraging this potential, its diversification towards
OFW had a significant impact on the local supply chain, with more than 200
companies affiliated with the port operations that account for over 10,000
Historically, the port was a fishing port and served the O&G industry from the employees across the value chain in R&D, manufacturing, transport,
1970s. As a first mover in the European offshore wind industry in the early 2000s pre-assembly, installation as well as maintenance of the offshore wind farms.53
and its convenient location on the Danish coast, the Port of Esbjerg secured itself
a key market position as the leading offshore wind port in Europe serving over
55 offshore wind projects (see Exhibit 15).

To meet the demand of the growing offshore wind industry, the port has
expanded and invested 1 billion Danish Krones between 2004 and 2013
(approximately USD 170 million at the time) in new areas and facilities that 50
https://portesbjerg.dk/pdflibrary/Annual_Report_2022_final.pdf
support the wind value chain.51 It diversified its service capabilities away from 51
https://portesbjerg.dk/en/about-us/history
O&G towards renewable energy, resulting in a decline in revenue from O&G
52
https://login.microsoftonline.com/96e14e5a-57ac-48d7-851d-12f54eff5a60/oauth2/authorize?client%5Fid=00000003%2D0000%2D0ff1%2Dce00%2D000000000000&response%5Fmode=form%5Fpost&response%5Ftype=code%20id%5Ftoken&resource=00000003%2D0000%2D0ff1%2Dce00%2D000000000000&scope=openid&nonce=6B913E103D4DBA5904DAAAB066DDF449E01A0983AF8C7F6D%2D2C295C5CE2A93EC0591581B78129DA88162C155D1D35A5324430C0A24232D7C7&redirect%5Furi=https%3A%2F%2Fround-lake.dustinice.workers.dev%3A443%2Fhttps%2Fcarbontrust%2Esharepoint%2Ecom%2F%5Fforms%2Fdefault%2Easpx&state=OD0w&claims=%7B%22id%5Ftoken%22%3A%7B%22xms%5Fcc%22%3A%7B%22values%22%3A%5B%22CP1%22%5D%7D%7D%7D&wsucxt=1&cobrandid=11bd8083%2D87e0%2D41b5%2Dbb78%2D0bc43c8a8e8a&client%2Drequest%2Did=d24c20a1%2D0036%2D8000%2D8db7%2Deb2649901323

53
https://stateofgreen.com/en/news/port-of-esbjerg-worlds-largest-base-port-for-offshore-wind-activities/
related activities which accounted for only 10% of total revenue in 2015
compared to 25% of revenue from OFW related activities.52

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 33

 Impact on local industry and investment
The port continues to attract investment for continuous improvement and upgrades for
-
future technology challenges from both public and private investors. A few notable

.
examples of investment into the Port of Esbjerg:

In 2023 the Port was chosen as a NATO maritime hub and received a grant of over
€28m from the European Commission and the European Union’s (EU) Connecting -
Europe Facility (CEF) to make upgrades to its infrastructure and expand by 570.000
sqm2. Furthermore, its fairway will be deepened by 12.8m by 2024 to allow for bigger
installation vessels to use Esbjerg as a pre-assembly and service port for the new

.
generation of larger offshore wind turbines.54

PensionDanmark has made a significant investment of around €940m in 2023 for

construction facilities to alleviate the pressure on the supply chain and limit bottlenecks

.
in the North Sea to establish 134 GW by 2034.

The Swedish investment fund Infranode confirmed the gradual investment of up to

€145m in port facilities at Esbjerg for storage, re-assembly, and manufacturing of
offshore wind components in 2020 to create green jobs in Denmark and the Nordic
region.55

Both local supply chains and the labour market have benefitted from the transition from
traditional O&G services to a focus on renewable energy that has as a result facilitated
significant investment in the region. While it is difficult to fully quantify the wider
economic impact and regional Gross Value Added (GVA) over the years, a rule of
thumb can be applied with an average of £0.1-0.5m of regional GVA per MW of OFW
developed.56 In the scenario of Port of Esbjerg where 22GW have been shipped to the
North Sea, this would result in a GVA estimated between the range of £2.2m and £11m
over the last two decades.

54
https://www.projectcargojournal.com/ports-and-terminals/2023/02/15/eu-awards-major-grant-to-port-esbjerg/?gdpr=deny

55
https://www.oedigital.com/news/478478-infranode-to-invest-up-to-145m-in-port-esbjerg-s-offshore-wind-facilities
56
https://group.vattenfall.com/uk/contentassets/c66251dd969a437c878b5fec736c32aa/best-practice-guidance---final-oct-2020.pdf

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 34

 Case study: Port of Taichung, Taiwan
Currently, the Port of Taichung is the largest of Taiwan’s four international commercial
ports and contains 50 wharves, 16 specialised zones, and three free-trade zones. The
Port of Taichung
CASE STUDY Key information
introduction of free-trade zones has led to reduced customs intervention, extensive
processing capabilities, a bonded system, tax incentives, streamlined administrative
requirements, and relaxed labour restrictions. The free-trade zones and their benefits
The largest port in Taiwan acting as a free-trade zone and attracting contribute to reductions in transaction and production costs for companies, attracting
large international companies looking to build-out offshore wind. investment as it enables generation of greater added value and the opportunity to
explore more diversified business models. The Port of Taichung is closely working with
Location: Wuqi District, Taichung, Taiwan local authorities to establish collaborations with science-based parks, industrial parks,
and value-add services in the region to facilitate innovation to maximise economic
Size of Port: 40 km2 benefit.60

OFW energy: Supplies 4.9 GW of OFW energy Its innovation-driven approach reflects the Port of Taichung’s commitment to the
expansion of renewable energy. Over the last few years, Taiwan International Ports
Regional strengths: The free-trade zone leads to reduced Corporation (TIPC) allocated NT$3.5bn (approximately USD 110 million) to expand the
production costs and increase GVA and attract further business to port by two new heavy lift wharves for turbine assembly to support the work on offshore
the port. There has been significant investment into the port’s wind farms off Taiwan’s coast to meet Taiwan’s national goal of generating 5.7 GW of
infrastructure to accommodate OFW deployment. OFW by 2025.61

Investment: NT$458bn by 59 companies (2010) 57 The facilities available at the port to support offshore wind development include turbine
manufacturing, OWP backup land, import and export areas for turbine components and
Supply Chain: 100 firms with established operations in the port and assembly areas. The port also has dedicated training centres, including International
free-trade zone (2023) 58 Windpower Training Corp. Ltd. (TIWTC), which aims to support the development of a
critical domestic workforce to ensure value is added to the local economy.
Owner: Taiwan International Ports Corporation, state-owned
shipping company

The Port of Taichung was opened in 1976 as part of the Taiwanese Ten Major
Construction Projects following the 1973 oil crisis. Upgrading key infrastructure
for the future economic modernisation of Taiwan ultimately attracted foreign
investment, the government additionally invested NT$300bn (~£8bn) into these
projects.59

57
https://www.taipeitimes.com/News/biz/archives/2010/12/23/2003491632
58
https://tc.twport.com.tw/en/cp.aspx?n=3157F8B1AF143094
59
https://dbpedia.org/page/Ten_Major_Construction_Projects
60
https://tc.twport.com.tw/en/
61

https://tc.twport.com.tw/en/

Exhibit 16: Port of Taichung

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 35
 Impact on local industry and investment
The combination of free-trade benefits and excellent infrastructure for OFW development has attracted the

.
investment of several national and international OFW players:

Ørsted signed a wharf lease as well as a 20-year O&M lease for their projects Greater Changhua 1 & 2a and
committed to make updates to the leased wharves from 2022 onwards, demonstrating long-term commit-

.
ment to the region 62

Taipower signed a 20-year lease, worth roughly NT$3bn, for 13 hectares comprising two wharves and

.
hinterland for the handling, assembling, and storing of components of Changhua County 63

Northland Power will serve their 1 GW Hai Long project together with Yushan Energy Co. Ltd from the Port

.
of Taichung from 2024 onwards 64

Gamesa Renewable Energy opened their offshore nacelle plant in 2021 at Port of Taichung with over

.
90,000 m2, significantly adding value to the local economy by upskilling Taiwanese personnel 65

MHI Vestas signed a lease with the Port of Taichung to supply Copenhagen Infrastructure Partners’ (CIP)
Changfang and Xidao project which will feature 62 9.5MW turbines, working closely with local Taiwanese

.
suppliers, such as Yeong Guan Energy Technology Group (YGG), to ensure adding local value 66

Jan de Nul, a Dutch EPCI contractor, signed a MoU with TIPC to establish a logistics hub and signed a
lease for 7.6 hectares of space in the Taichung Port which will be used as the storage, assembly,
and load-out area for the Formosa 1 Phase 2’s monopile foundations and other underwater infrastructure

.
in 2019 67

Hitachi, a Japanese cable supplier, set up a Joint Venture Company with Fortune Electric with a capital of
NT$1.4bn in 2014 for the manufacturing of transformers in the free-trade zone of Port of Taichung to respond
to the increasing international demand for transformers and supply its international markets from the strate-
gic location in Taiwan 68 , creating around 200 local jobs

A strong commitment and continuous investment in the expansion of the port infrastructure led to the
successful attraction of international companies to settle in the port for their offshore operations and the
successful establishment of the Port of Taichung as the major hub for offshore wind development in the
Asia-Pacific region.

62
https://orsted.tw/en/news/2020/02/orsted-signs-20-year-lease-with-port-of-taichung
63
https://service.taipower.com.tw/csr/en/news/kZ/detail
64
https://hailongoffshorewind.com/en/overview
65
https://www.siemensgamesa.com/en-int/newsroom/2022/09/092122-siemens-gamesa-press-release-taiwan-offshore-nacelle-manufacture
66
https://www.offshorewind.biz/2020/12/02/mhi-vestas-and-cip-book-assembly-site-at-taichung-port/
67
https://www.offshorewind.biz/2018/11/06/jan-de-nul-settles-in-taichung-port/
68
https://www.hitachi.asia/hitachi-announces-establishment-of-joint-venture-company-for-manufacturing-transformers-in-taichung-taiwan/

GWEC | How Offshore Wind Development Can Support Coastal Regeneration

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 36
Case study: Mokpo & Sinan, South Korea

Mokpo International
CASE STUDY Trading Port Key information

Mokpo is an established port city, with plans to develop the

existing port to support OFW development. Sinan is a municipality
extending across islands with ties to renewable energy.

Location: South Jeolla Province, Southwestern coast of South

Korea

Area of administration: 51,680 m2

Population:(M) 218,858 (S) 260,941 (as of June 2023)

Strengths: Strategic location and Mokpo is home to multiple

industrial complexes. Supporting political setting. Exhibit 17: Mokpo and Sinan

Mokpo International Trading port first opened in 1897 as a traditional fishing port The Sinan municipality would also benefit from Mokpo port development. The
and today is a crucial maritime trade and transportation hub. The Mokpo region municipality extends across islands that historically had fishing and agriculture
has seen a growth in local fisheries, manufacturing, and shipbuilding industries. as their primary industries.75 Today Sinan has developed its renewable indus-
However, compared to the great development of other regions with the tries and has a 200MW solar PV project.76 According to a study from 2022, Sinan
economic development that began in the 1960s, it has relatively shrunk. was found to be one of the four municipalities that has achieved RE100 77.
As Mokpo Port has limitations in its natural and location conditions as a port, its Moreover, according to the provincial plan, Sinan is in the 1st phase of OFW
economy has slowed down significantly as its economic scale has grown. In development, with 4.1GW of the planned OFW project on the southwestern coast
addition, with the development of land transportation, Wando, Jindo, Jangheung, of South Korea reaching a total of 8.2 GW.78
Gangjin, and Haenam, which were previously commercial lines with Mokpo,
were further reduced by being incorporated into the Gwangju area. However, it
is still the centre of the coastal route connecting the archipelago of Shinan-gun
and Haenam-gun, and passenger ships operate to 165 nearby islands, including
Jeju Island.70 The key industrial complexes in Mokpo are Sanjung, Sapjin, and 69

Daeyang. However, the region may be at risk of the collapse of major industries 70

71
https://encykorea.aks.ac.kr
in recent years. https://invest.jeonnam.go.kr/invest/201/subview.do
72
https://www.jeonnam.go.kr/contentsView.do?menuId=jeonnam0303021000;
73
https://www.mokpo.go.kr/www/open_administration/municipal/municipal_plan?idx=511879&amp;mode=view
The provincial government has plans to develop the New Mokpo Port to
717273
74

support the Southwestern OFW project. This plan has a significant investment of 75
https://www.electimes.com/news/articleView.html?idxno=328802
https://www.shinan.go.kr/home/www/openinfo/participation_02/participation_02_04
KRE 231 billion (USD 177.425 million) and aims to create a 50,000-tonne capacity 76
https://www.energydaily.co.kr/news/articleView.html?idxno=129123
steel dock with hinterland and an area of 238,000m2.74 77
https://energytransitionkorea.org/post/44183
78
https://invest.jeonnam.go.kr/invest/201/subview.do

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 37

Recommendations for South Korea Table 4: Industrial Port opportunity for Mokpo and Sinan, South Korea.
The Port of Esbjerg and Port of Taichung are clear examples of ports
and port cities being revived through committing to OFW. The port of Mokpo & Sinan
Esbjerg is now central to supporting OFW farms in the North Sea and
the Port of Taiwan has been attracting foreign investment and like
. Opportunity to transition a port into an offshore wind hub
-
Mokpo port has numerous active industrial complexes and is now a
hub in the APAC region. The following factors have led to these ports . Potential to increase R&D and inward investment into the Mokpo and
Opportunities
now being hubs for the offshore wind industry: Sinan region and local supply chains
. Increasing local jobs and revitalising local industry
1. Geographic proximity to key offshore wind farms . Opportunity to increase logistic coordination and specialisation of ports in
. Obtain Foreign Direct Investment
the APAC region
2. Existing infrastructure can be upgraded and have specific areas
designated for OFW development. . Creation of a training centre to upskill local workforce
3. Renewable Energy Targets in both Denmark and Taiwan aiming to
reach Net Zero by 2050. 79 Regarding renewable energy, Denmark has . Local workforce may not initially have the skills required for the new
a target of 100% electricity and 55% consumption 80 and Taiwan aims to industry, upskilling and training programmes will be required to meet
Challenges
.
source 20% of electricity from renewables by 2025.81 workforce demands.
Local industries have no prior experience in supplying products for OFW
4. Economic incentives in the Port of Taichung. The implementation of projects. This can prove to be a challenge as most bidding by major
free-trade benefits has led to international investment. project developers may require prior experience in supplying compo-
nents. The local firms may not fulfil the requirement for the procurement
bidding process without assistance, for example by partnering with
international companies in the OFW supply chain.

. The Port Esbjerg authority fostered cooperation and system building,

Best practice
. Taichung Port has attracted FDIs and collaboration between international
acting as an ‘innovation system builder’
recommendations
and local enterprises.

79

80
https://www.iea.org/countries/denmark
81

https://www.sciencedirect.com/science/article/pii/S2211467X21001322

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 38

 Exhibit 18: Humber offshore wind industrial cluster 84

Development of clusters
A cluster is a place-based or regional collaboration between industry, academia
and government acting to bolster regional supply chain development, increase
economic productivity and support local (typically coastal) communities.
Collaborations between government entities, private sector companies and
international partners have proved successful in accelerating offshore wind
development globally.

There are a number of examples of existing offshore wind clusters, though one
of the most successful is the Humber Cluster in the UK. This section outlines the
key successes to the Humber Cluster and recognises the factors which have
contributed to its success. In South Korea, two regions have been identified as
prospective locations for offshore wind clusters; the challenges and opportuni-
ties for each are analysed further.

Case study: Humber Cluster, UK

The Humber Offshore Wind Cluster is one of eight offshore wind clusters in the UK.
The region has eight operational offshore wind farms generating 4.9 GW of energy
Humber Cluster, UK and is expected to deliver a total pipeline of 13.8 GW by 2030.99 Historically, the
CASE STUDY Key information region focused on shipping and fishing industries and prior to focusing on the growing
OFW farm activities on the east coast, the region had begun to undergo economic
decline.85

The region is now well-known for its offshore wind capabilities encompassing almost
Location: Humber, UK
all stages of an offshore wind farm’s lifecycle, including innovation and business
incubation, testing and demonstration, turbine manufacture, assembly, installation, and
Size: The Humber Estuary nears 24.5 thousand km2.
O&M using existing servicing facilities. First recognised as an offshore wind cluster in
2011, it has since become a global example of how to regenerate a region by building
OFW energy: Supplies 4.9 GW of OSW energy, accounting for
on its maritime and manufacturing heritage to further develop R&D capabilities, attract
nearly a third of the UK’s current (2023) offshore wind capacity.82
investment and develop local skills through education programmes.114 Currently,
the Humber region generates around £18 billion per year in Gross Value Added
Supply chain: Humber Cluster’s industries and supply chains
(GVA) and supports 360,000 jobs across the Humber’s industries and associated
together are valued at £52 billion, accounting for 4% of the UK’s
supply chains (which includes offshore wind).86
GVA.83
82
https://greenporthull.co.uk/what-we-do/humber-offshore-wind-cluster
83

- 84
https://www.drax.com/carbon-capture/capture-for-growth-zero-carbon-humber-report/

https://www.business-live.co.uk/economic-development/humbers-key-role-seeing-offshore-28114055

85
https://greenporthull.co.uk/what-we-do/humber-offshore-wind-cluster
86
https://idric.org/stakeholders/humber-industrial-cluster/
https://green-alliance.org.uk/wp-content/uploads/2021/11/Growing_the_UKs_coastal_economy.pdf
99

114

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 39

 Initial government support spurred subsequent private sector investment
Government-funded initiatives focused on strengthening the UK’s offshore wind manufacturing base in the Humber

.
region. These included investment for:

Enhancing existing facilities – £160 million of government financial support has been granted to
manufacturers like Siemens Gamesa and GRI Renewable Industries, aimed at enhancing manufacturing

.
facilities.84

Developing new ports and infrastructure – Up to £95 million has been invested to develop two new ports on the Humber
and Teesside, providing the necessary infrastructure that will facilitate the build-out of the next generation of offshore wind
projects. Collectively, these ports will accommodate up to 7 manufacturers and create around 3,000 new jobs.104

Supportive policies subsequently encouraged private sector investment in developing the local supply chain and

.
strengthening the local economy of the Humber:

Local employment and education - Offshore wind developer Ørsted has collectively invested £9.5 billion into the
Humber region, with £45 million estimated to be directly invested in the local community. This local investment is derived
from links with local colleges for apprenticeships 88 and the extension of its East Coast Hub O&M facility in Grimsby has
secured the long-term employment of over 370 local workers which is thought to increase to 800 staff by 2030. 89 The
University of Hull, which has strong engineering capabilities, has supported the development of innovation initiatives like
the Aura Innovation Centre, enabling collaboration amongst academia and companies working in the field of Net Zero,

.
including Siemens Gamesa, which apprenticeship schemes.61

Creating new facilities - Around £180 million in private sector investment for offshore wind manufacturers SeAH Wind
and Smulders Projects UK will be directed towards creating new facilities in the Humber which will create and protect over
1,000 jobs. Siemens Gamesa invested £310 million in the development of a new offshore wind turbine blade
manufacturing facility, creating over 1,000 local jobs, to support Ørsted’s growing offshore wind pipeline in the Humber

.
region. 90

Local links with research institutions - Around £2.8 million has been invested to develop a 5G Testbed that will enable
the test and demonstration of equipment and new technologies in real-world conditions. The consortium, led by ORE
Catapult, expects benefits to a wide range of existing offshore wind technologies including robotics and autonomous
systems (RAS), remote sensors, vessels, and ports.91

61

88
https://tc.twport.com.tw/en/
https://orsted.co.uk/careers/early-careers/apprenticeships-trainees/apprenticeships
89
https://www.business-live.co.uk/ports-logistics/orsted-launches-record-apprenticeship-recruitment-26340472
90
https://greenporthull.co.uk/what-we-do/siemens-gamesa
91
https://ore.catapult.org.uk/press-releases/the-biggest-offshore-wind-living-lab-in-the-world-to-be-developed-in-the-humber/
104

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 40

The need for national, cohesive industrial strategy Lessons learnt from the Humber Cluster
The UK has a less centralised industrial strategy than the EU, which supports The Humber Offshore Wind Cluster in the UK is a clear example of how a region can
long-term manufacturing initiative or the US, which passed the Inflation Reduction transition from declining industries to offshore wind industry and how that strengthens and
Act (IRA) to provide billions of dollars on loans and grants for clean energy.93 revitalises a community. Over the past 13 years, the region has been successful in
Instead, over the past several years the UK has taken a market-led approach to converting government support into private sector investment, supporting local
industrial investment, and the government has launched numerous stand-alone communities and creating long-term jobs. A number of factors have led to the success of

.
programmes to support new technology development. The government has also the Humber industrial cluster, which include:
supported a range of individual ‘sector deals’, including those focused on
Geographical proximity to the market. The Humber region was strategically located for
artificial intelligence, clean growth, an ageing society, the future of mobility,
supplying and servicing the first offshore wind farms in the UK. The North Sea area has
and offshore wind.
favourable conditions for offshore wind development, with sustained wind speeds and
shallow waters.98 The pipeline of early UK wind farm projects were all easily serviceable
Despite these efforts, a 2023 report by The Manufacture’s Organisation cited that
from the Humber region. The area has benefited from a stable growth of offshore wind
81% of manufacturers surveyed felt their company was at a competitive

.
developments, matched with stable growth of infrastructure and job opportunities.99
disadvantage globally due to an absence of cohesive, UK industrial strategy.94
The sector deals, pledged in 2017, were followed in quick succession by Boris
Existing industrial history and expertise. The maritime and fishing history formed a good
Johnson’s 2021 ‘Plan for Growth’ citing infrastructure, skills and innovation as the
foundation for a just transition in the area. With a strong fishing fleet and
country’s main investment pillars; 95 Liz Truss’s 2022 Growth Plan outlining tax cuts
understanding of the maritime trade, employees were able to transition to supporting site
to support private sector growth; and Jeremy Hunt’s 2023 announcement as

.
management and construction, and subsequently other areas.
Chancellor to support five new growth sectors in the UK economy: Digital
Technology, Green Industry, Advanced Manufacturing, Creative Industries and
Strong commitment from local authorities. The local governments have capitalised on
Life Sciences.97
government funding to implement policies to attract private investment and ensure
economic growth. Programmes such as ‘Growing the Humber’ delivered by local
The absence of a cohesive and strategic industrial policy may impact on the
authorities have maximised investments to build the offshore wind sector in the Humber
success of the Humber Cluster, and other similar clusters, in the long-term.

.
region.100

Strong local partnerships. The local authorities were integral to early collaboration
between supply chain, innovation and businesses. Partnerships with the Aura consortium,
the University of Hull and other initiatives such as the Offshore Renewable Energy

.
Catapult are further strengthening the Humber offshore wind leader status.

The requirement for transition. The Humber region was facing economic decline due to
the weakening fishing and maritime trades. Leveraging government support,
local authorities, businesses and investors ensured the Humber successfully avoided
economic downturn and could transition to other areas of expertise.

93

https://www.whitehouse.gov/wp-content/uploads/2022/12/Inflation-Reduction-Act-Guidebook.pdf
94
https://www.makeuk.org/insights/reports/industrial-strategy-a-manufacturing-ambition
95 https://commonslibrary.parliament.uk/research-briefings/cdp-2022-0205/
97
https://www.gov.uk/government/news/chancellor-sets-out-long-term-vision-to-grow-the-economy
98

https://www.nature.com/articles/s41598-023-45829-2
99
https://green-alliance.org.uk/wp-content/uploads/2021/11/Growing_the_UKs_coastal_economy.pdf
100
https://static1.squarespace.com/static/5faa9db24824a917c7e06a4c/t/5faac0f953e983236a938b9e/1605026053460/The+Humber+Offshore+Wind+Cluster+Prospectus.pdf

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 41

 Case study: Incheon Metropolitan City, South Korea
The Incheon region made of various islands, 32 of which are currently inhabited. As the
fishing trade in these communities diminishes, the local government is supportive of renewable
Incheon Metropolitan City
CASE STUDY Key information
energy deployment to regenerate the area and improve electricity access and transmission.

The Incheon coastal region has been a significant hub for international sea trade and has received
regular port upgrades to support major industrial activities in Seoul and its surrounding areas, with
Location: West coast of South Korea, nr Seoul.
easy access transport links. The region hosts diverse industries including heavy equipment, electrical
-
Population: 2,987,918 (as of September 2023)101 equipment, metal works and automobiles. Incheon Port comprises four distinct ports, namely Inner,
South, North, and New. Among these, two ports have been recognised for their capacity and suitable
Size: The area of administration is 1,067.04 km2.102 specifications to serve as an offshore wind installation port and an offshore wind operation and
maintenance (O&M) port.
OFW energy: Pipeline of 3.5 GW including a 1.6 GW
development from international developer Ørsted. The region saw significant growth by government-led economic development plans and establishing
numerous industrial complexes as part of the 5-Year Master Plan for Economic Growth and from its
Employment: As of 2021, Incheon Metropolitan City incorporates designation as a Free Economic Zone in the early 2000s.106 However, recent years have seen a relative
over 300,000 businesses with 1,223,448 employees. decline in the region, with only an outward appearance of economic growth due to the growth in the
-
service industry. The Incheon branch of the Bank of South Korea suggests focusing on industries with
Type of development scheme: Government and private high economic multiplier effects and improving inter-industry associations 107

.The Incheon region has an offshore wind project pipeline of over 3.5 GW, which has attracted
international developers. The local government is supportive of offshore wind in the area, capitalising on
government support from the Offshore Wind Development Support Programme.108 The development of
these projects has not been without opposition; the region is home to productive fishing grounds and
local fishermen are concerned about disturbance to fishing grounds from turbine foundation installation.109
The local government stepped in to undertake mediation and the Ministry of Industry subsequently set
up a working group in four regions to resolve conflicts in offshore wind projects.

Table 5: Offshore wind farm pipeline in Incheon.110

Opportunities Capacity Investment (USD $) Construction

Exhibit 19: Incheon Region105 KOEN 640 MW USD 2.457 billion 2023 - 2026

101
Ørsted South Korea 1,600 MW USD 6.142 billion 2025 - 2027
https://kosis.kr/statHtml/statHtml.do?orgId=101&amp;tblId=DT_1B040A3&amp;vw_cd=MT_ZTITLE&amp;list_id=A_7&amp;seqNo=&amp;lang_mode=ko&amp;language=kor&amp;obj_var_id=&amp;itm_id=&amp;conn_path=MT_ZTITLE

102
https://www.incheon.go.kr/IC040605
105

C&I Leisure Industry Co., Ltd. 233.5 MW USD 998.088 million TBC
106

107

https://www.bok.or.kr/portal/bbs/P0000720/view.do?nttId=10065582&amp;menuNo=200570&amp;pageIndex= OW South Korea

108
https://www.electimes.com/news/articleView.html?idxno=326359
(South Korean Peninsula 1,200 MW USD 4.606 billion TBC
109
https://bizn.donga.com/3/all/20220321/112442492/1
110
Offshore Wind)

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 42

Case study: Gunsan City, South Korea
Exhibit 20: Gunsan City region

Gunsan City
CASE STUDY Key information

-
Location: North Jeolla Province, mid-western coast of South Korea

Size: The area of administration is 398.3 km2.111

OFW energy: 2.4 GW pipeline 112

Employment: As of 2021, Gunsan City incorporates over 33,000

business with 116,443 employees.113
The collaboration between the government, local industry, and academic institutions can
Regional strengths: Geographical proximity to the market;
physical infrastructure and ports; pre-existing manufacturing base; facilitate the development of an offshore wind cluster, as demonstrated in the Humber
supportive political setting. Cluster. This gives a mechanism through which strategic, long-term planning can be
enacted to ensure sustained investment and active participation within the cluster. Gunsan
Type of development scheme: Government-led. City has the opportunity to leverage the expertise of nearby institutions capable of
providing education and training for offshore wind skills, to further strengthen the regions’
cluster status. The Research Institute for Offshore Wind at Kunsan National University was
established in 2009;wind power engineering is within its curriculum.118

The West Coastal development initiative undertaken by the To successfully develop an offshore wind cluster in Gunsan City, attracting investors and
Government in the 1980s and 1990s spurred the expansion of technology providers to the North Jeolla region is key. North Jeolla is already home to a
manufacturing, including the establishment of car manufacturing and number of manufacturing industries and research and training institutes associated with
heavy industries shipyards in Gunsan City 114 . However, more recently, the offshore wind industry. Existing manufacturing industries include blade manufacturing,
the closure of two critical manufacturing facilities 115 , coupled with a turbine tower manufacturing, foundation manufacturing, steel fabricators and service
decline in the local population, has resulted in economic stagnation for providers for O&M services 119 . The R&D institutions in North Jeolla are well established,
the city. The South Korean government designated the area as a special including local branches of agencies such as the South Korea Institute of Materials Science,
response area and formulated multiple support programs to revitalise the South Korea Institute of Energy Technology Evaluation and Planning, South Korea Energy
shipbuilding and car manufacturing industry.116 Despite these efforts, the Agency, and Jeonbuk Technopark (JBTP).
region’s regeneration has seen limited success.117
111
https://www.gunsan.go.kr/main/m347
Gunsan City is well placed to form an offshore wind cluster development, 112
http://www.newgunsan.kr/newsView.htm?code=1_1&amp;idx=11936

with proximity to proposed western and southern South Korean offshore 113

114
https://kosis.kr/statHtml/statHtml.do?orgId=101&amp;tblId=INH_1K52C01_23&amp;lang_mode=ko&amp;vw_cd=MT_OTITLE&amp;list_id=204_20403_10&amp;conn_path=I4

wind farms. Gunsan port is strategically positioned to provide

marshalling operations to not only local OFW farms, but support interna- 115

https://www.keis.or.kr/user/extra/main/4081/publication/reportList/jsp/LayOutPage.do?categoryIdx=262&amp;pubIdx=9092&amp;reportIdx=5907&amp;spage2=10
tional developments in Japan, China and Taiwan. 116
https://www.keis.or.kr/user/extra/main/4081/publication/reportList/jsp/LayOutPage.do?categoryIdx=262&amp;pubIdx=9092&amp;reportIdx=5907&amp;spage2=10
117
https://news.kbs.co.kr/news/pc/view/view.do?ncd=5023570
118
https://www.kunsan.ac.kr/windkorea/index.kunsan
119

https://www.bok.or.kr/portal/bbs/P0000720/view.do?nttId=10068362&amp;searchBbsSeCd=z15&amp;menuNo=200570

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 43

 Recommendations for South Korea
Two regions in South Korea have been identified to have strong potential to form an offshore wind cluster. The opportunities for each region are outlined in the tables
below. The cited regions serve as examples and should not constrain the involvement of other local municipalities or regions in investing in South Korea's offshore wind
industry, particularly in regions where there is notable enthusiasm for project development, such as parts of Cheongnam province and Ulsan city.

Table 6: Industrial cluster opportunity for Incheon Metropolitan City, South Korea.
-

Incheon Metropolitan City

. Geographical proximity to the market. Incheon Metropolitan City has two existing ports, with specifications capable of supporting OFW
activities. There is a pipeline of offshore wind projects in the region, and the ports are well located to service these projects.
Existing industrial history and expertise. The Incheon region has expertise in many manufacturing and logistics industries.

.
Existing facilities and workforce can be utilised for OFW development, to revitalise the economy.

Existing industrial history and expertise. The Incheon region has expertise in many manufacturing and logistics industries.

.
Existing facilities and workforce can be utilised for OFW development, to revitalise the economy.

Opportunities Strong commitment from local authorities. The local government is supportive of renewable energy deployment, with an aim to
strengthen electricity supply to the many islands and to support the decline of the existing fishing industry. The local authorities were

.
proactive in applying to the government-led Offshore Wind Development Support Programme.

Strong local partnerships. The pipeline of projects in the Incheon region is attracting international offshore wind developers. There is an
opportunity to proactively engage with these international players to ensure education and support schemes are developed to benefit the

.
local economy and community.

The requirement for transition. Incheon has experienced a decline in the manufacturing and construction industry, and the region is at risk
of stagnation without transition.

. Infrastructure challenges. The Incheon region experiences a large tidal range of 8-10m, which needs to be considered inside the ports
and during vessel movement. To overcome this, many wharves have developed lock gates at their docks, which should be considered if

.
there are large amounts of traffic for offshore wind servicing. The height of the Incheon bridge will limit the air draft available for vessels.120
Challenges
Difficulties in siting. Incheon coast is heavily crowded with international trading ships.121 A potential site faced disputes with fishermen as
it overlapped with the country’s largest swimming crab fishing ground.122 Large areas are also reserved for military uses.123

120

121

122
https://www.mediaic.co.kr/news/articleView.html?idxno=67780
https://bizn.donga.com/3/all/20220321/112442492/1
123

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 44

 Incheon Metropolitan City

. Develop an economic plan with local partnerships. The local authorities should prioritise forming relationships with regional partners to
strategically support local employment opportunities. Conducting an evaluation of potential job opportunities and investment
Best practice requirements could support this, to shape a long-term vision. Local authorities will need to devise a funding model to facilitate support for

.
recommendations investment.

Establish a framework for engaging with investors. The arrival of offshore wind developers in the area opens up opportunities to
implement direct community benefits through dedicated support schemes.

Table 7: Industrial cluster opportunity for Gunsan City, South Korea.

Gunsan City

. Geographical proximity to the market. Gunsan City has close proximity to the southwestern OFW farm pipeline. The port has easy
access to major highways near industrial complexes, for ease of component transportation and existing specifications to become a

.
marshalling port.

Existing industrial history and expertise. The region has strong manufacturing and heavy industry skills, which can be utilised for offshore

.
wind transition.

Offshore wind skills. The wider region of North Jeolla has been steadily growing an offshore wind economy, with a number of

.
Opportunities manufacturing and R&D facilities.

Strong commitment from local authorities. The local authorities have been vocal about the desire to bring the workforce back to the local
area. These desires need to be backed up with robust local policy and investment. The local municipality of Gunsan has outlined a plan to

.
invest and build a specialised port.124125126127

Strong local partnerships. There are a number of OFW focused R&D institutes and manufacturing training institutes in the North Jeolla

.
province, which could be utilised for OFW training and education.

The requirement for transition. Gunsan City has faced economic stagnation in recent years.There is an opportunity to transition to cement
the area as a leader in offshore wind.

124
http://www.ikbn.news/news/article.html?no=141406
125
https://www.jjan.kr/article/20220126749606
126
https://www.jjan.kr/article/20230530580005
127
https://www.domin.co.kr/news/articleView.html?idxno=1387646

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 45

 . Labour shortages in the manufacturing sector. Despite the recent improvement in both employment and population indicators, declining

.
younger population and employment in the manufacturing sector can pose a challenger in: securing a workforce in the region 128
Challenges
Closing down two manufacturing facilities; shipbuilding and car manufacturer. The closure of two critical manufacturing facilities –
Hyundai Heavy Industries’ Gunsan Shipyard in 2017 and GM South Korea’s Gunsan Plant in 2018 led to many worker migration to other

.
regions.

Capitalise on education and training partnership opportunities across South Korea. Gunsan City has expertise in manufacturing, which
could offer job opportunities in OFW manufacturing should the facilities restructure to support on OFW. However, Gunsan City may not be
best placed to conduct all OFW services. Educational institutes should collaborate with other regions to form agreements for job

.
opportunities or apprenticeships in other aspects (for example, conducting surveys).
Best practice Establish a policy framework to revitalise the existing manufacturing industry. The existing manufacturing facilities in Gunsan Region
recommendations support some small-medium sized OFW manufacturing, but will need support to scale up to service the pipeline of OFW projects in the

.
region. Demonstration of local authority support through long-term planning will help to attract private sector investment.

Establish a framework for local partnerships. The local authorities should prioritise forming relationships with local partners to establish
an OFW specific consortium. In the North Jeolla region, where a number of OFW focused R&D institutes exist, broader government support
for establishing relationships with supply chain and investors could enhance the influence of the R&D institutions.

Technical upskilling through education and training

Offshore wind development can lead to the creation of local employment opportunities, either through a cluster model where multiple opportunities are created within a
district, or in more of a standalone approach reflected by port revitalisation. It is predicted that the number of jobs in the offshore wind sector could triple by 2040 in the EU.129
The roles in construction, installation, operation and maintenance of wind projects will require unique skill sets, encompassing safety protocols for working at elevated
heights and survival at sea.130 While there are employment opportunities within the sector that do not require any specific qualifications, to address jobs and skills
bottlenecks, investment is required in training centres, partnerships with colleges and further education institutes and apprenticeships with developers and contractors.

128
https://www.jjn.co.kr/news/articleView.html?idxno=937994
129

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2021:240:FIN
130
https://gwec.net/gwecs-global-offshore-wind-report-2023/

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 46

 An example of a training centre within the cluster model is in the Humber region, Maersk has
established a training centre that offers the Global Wind Organization (GWO) Basic Safety Training
(BST), GWO Basic Technical Training (BTT), GWO Enhanced First Aid with additional course on GWO
Blade Repair and GWO Advanced Rescue Training due soon.131 These types of centres partner with the
installation contractors and developers to employ local people by allowing them to access the required
training. Additionally, offshore wind developers, such as Ørsted and RWE, launched safety training
programmes 132 and apprenticeship schemes 133 in the Humber region to adequately develop a skilled
workforce.

Universities also have an important role to play in regional development of offshore wind. Partnerships
with technical universities support the link between industry and academia and provide opportunities
for appropriate skills development and a pathway into the industry. For example, universities such as
TU Delft (NL), DTU (DK) and Strathclyde (UK) all have strong relationships with developers and local
supply chains.

Equitable employment in offshore wind

As the number of employment opportunities within offshore wind increases to meet the energy targets,
it is important to consider how those within the local population will have access to these opportunities.
The UK government has set an ambitious target in its Offshore Wind Sector Deal of 40% women
employed in the sector by 2030 compared to the 16% that have been employed by 2018 and
committed to investing significant sums into STEM education both on higher and lower education level.134

An International Renewable Energy Agency (IRENA) survey highlighted that women make up 21% of
the wind energy workforce and 32% of the total renewable energy workforce,135 with the lowest amount
of representation in non-administrative (technical) functions. Industry wide initiatives such as the
Women in Wind Global Leadership programme and the Global Women’s Network for the Energy
Transition (GWNET) are aiming to address these inequalities through networking, mentoring and
training.136137 Companies can also set targets for recruitment such as Ørsted’s 40% by 2030 goal, or
improve retention and address gender pay gaps. Additionally, for existing employees a diverse
workplace can be supported through flexible working, family friendly working, career development
following parental leave and creating internal networks.

131
https://www.maersktraining.com/maersk-training-in-humber/
132
https://orsted.co.uk/media/newsroom/news/2020/08/orsted-launches-immersive-safety-programme-in-a-first-for-the-humber
133
https://www.thehullstory.com/allarticles/wind-turbine-apprenticeship
134
https://www.gov.uk/government/publications/offshore-wind-sector-deal/offshore-wind-sector-deal
135
https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Jan/IRENA_Wind_gender_2020.pdf?rev=270b62baad3c40a5b289a4f47eb8c5a9
136
https://gwec.net/women-in-wind/about-the-program/
137
https://www.globalwomennet.org

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 47

-

CONCLUSION AND POLICY SUGGESTIONS

Conclusion and Policy Suggestions Local governments
Offshore wind has an integral role to play in South South Korea's energy Build a local regeneration vision with the citizens
transition and can offer a wide range of opportunities for the regeneration of The industry encourages early and increased engagement by local
coastal communities. OFW development is likely to generate large-scale municipalities with all local stakeholders in developing the long-term vision of
investment, connect to a wide range of supply chains, and have strong industrial a region’s regeneration. The current “renewable cluster complexes” scheme
linkages, making it a major contributor to the regeneration of coastal cities. incentivizes proactive roles from local municipalities and provides an
However, the potential economic benefits will only be fully realised once opportunity for residents' engagement. However, it is limited in the sense that
development takes place, hence there is a level of urgency to accelerate policies only the stakeholders directly associated with the physical scope of the project
that could support OFW. are engaged in site selection. Creating the long-term blueprint of a region’s
development with the broader local community will help build social
Due to the nature of OFW development, which involves global and local supply acceptance and long-term political support for OFW development.
chains, industries, institutions, and many other actors at international, national,
and sub-national levels, policies that look to fulfil the goal of rapidly expanding One of the main causes for delays in private-led projects in South Korea is
OFW deployment often involve multiple institutions and political stakeholders strong opposition due to concerns by local communities - there has often been
from the local to national level. This is complicated and takes guidance from all limited engagement and understanding between them and the developers.
levels of government, but in particular at the national level. Local municipalities and the local councils can better represent the local
citizens by including them in devising long-term strategies for the region early
As such, GWEC encourages the national government to establish a on. This process can greatly be enhanced by continuous efforts in informing,
comprehensive and visionary industrial policy to support the sector, consulting, involving, collaborating, and empowering citizens through forming
helping a sector that is critical to the country’s net zero targets and that will a public committee or a task force within a city council led by offshore wind
also rebuild many coastal communities that have seen economic decline. departments in local governments.

The following highlights details of our recommendations, split into local, both Build the workforce capacity with local research institutions and other
local and national, and national. knowledge partners
Local municipalities may collaborate with key industrial actors to provide
education and training programs. As in the case of Port Hull in the Humber
cluster, education and training programs led by local universities and research
institutions, privately and publicly co-funded, provide optimal environments to
secure skilled labour in the region.

As South Korea's student population is rapidly decreasing, many local

universities, national and private, in shrinking cities, are closing due to financial
circumstances. Increasing industry-academia collaboration is one among
various policy measures to revitalise dwindling local universities. Local
municipalities can act as a bridge between the industry sector and provide
necessary public financing and support.

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 49

Establish inclusive governance on industrial clusters with stakeholders
As key stakeholders, the private sector can play a more direct role in the planning
and implementation of the OFW industrial cluster in the region. In 2023, the Ministry
of the Interior and Safety (MOIS) of South Korea announced that it will relax the
requirements for establishing a council between resident firms in small industrial
complexes. However, there is a growing need for more efficient ways to engage with
public councils in determining the future of industrial clusters. This is especially true
for the industrial sector such as OFW which is expected to grow faster.

There are also varying governance models for industrial clusters with goals to
achieve net-zero targets. Industrial clusters face many challenges working with a
variety of stakeholders to deliver net-zero targets. Therefore, a governance structure
tailored to each industrial cluster’s characteristics is required. Local governments
may assess the current governance model, level of collaboration, range of actors and
decision makers involved to determine their unique governance structure for the
industrial cluster.

Strengthen international networks

Local governments oversee multiple roles as decision makers, planning authorities,
managers of municipal infrastructure and central figures in public-private
collaboration, which make them ideal drivers of change.

An existing global network between local governments can be utilised to enhance the
capacity to plan and implement effective climate action at the local level.

For example, in 2023, Seoul Metropolitan City hosted the biennial World Cities
Summit Mayors Forum in 2023 and centred its discussions on the theme of “Liveable
and Sustainable Cities: Forging an Inclusive and Resilient Future”. This forum
exemplifies a local government-level network serving as a dynamic platform. It not
only facilitates the exchange of information but also cultivates fresh partnerships
between industry experts and public authorities. The Global Covenant of Mayors for
Climate & Energy (GCoM), founded in 2016 comprises more than 12,500 cities and
local governments spanning six continents and 144 countries. This alliance includes
25 South Korean cities, such as Seoul, Busan, and Sinan, all of which have enthusiasti-
cally embraced the commitment to climate action.

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 50

National government
As noted above, GWEC encourages that government to establish a comprehensive and visionary industrial policy to support the sector, including the following:

Expand the number of free economic zones to enhance offshore wind Introduction of a production tax credit system, or a similar incentive, for the wind
industry cluster power supply chain
As South Korea plans to develop offshore wind on a large scale in a relatively If South Korea introduces a production tax credit for companies in the offshore wind
short period of time, the government should create opportunities for foreign supply chain, it is expected to be a strong incentive for companies to invest. As a
and domestic investment, including technology development collaboration pilot case, if the governments designate an offshore wind industry cluster and offer
with international companies. production tax credits to companies, we will see how much the community
regeneration effects. The tax credit system is under the jurisdiction of the Ministry of
It is advisable for the national government to expand the number of free Economy and Finance (MOEF); MOTIE and MOEF should work together.
economic zones to provide a level playing field for FDI. Free trade zones
offer a wide range of tax breaks and support. To illustrate, one of the reasons Prepare long-term plans on port and grid infrastructure for offshore wind to help
for the success of the Humber Industrial Cluster in the UK is that it was developers make informed investment decisions
selected as an Enterprise Zone in 2011.
Since the expansion of port infrastructure led to successful attraction of
In South Korea, there are currently free zones in Incheon, Pyeongtaek, international companies to settle in the port for their offshore operations, it is
Gwangyang, and Busan etc. Gunsan was selected as a free economic zone, important to strengthen developer's confidence in entering and developing
but with the enactment of the Saemangeum Special Law, it was changed to offshore wind in the country by providing long-term port and grid
receive various deregulatory benefits within the special law. infrastructure plans. Meanwhile, a long-term vision for these crucial elements can
strengthen the supply chain, creating ripple effects that will continue for years.
By significantly increasing investment opportunities from international firms,
local municipalities may align their policies to facilitate more collaboration
between global and local firms to create synergistic growth in the OFW
industry. From the perspective of local municipalities, new inward investment
can assist in job creation and regional economic growth.

Working with government, industry and local stakeholder communities,

develop standardised guidelines for engagement, consider existing
practices in community engagement.
Currently there is limited guidance from the national government regarding
best practices in community engagement during OFW development. This
situation results in ambiguity for developers, and varying levels of successful
engagement with communities. The new Special Bills will place the
responsibility for engagement with the government, but until those projects
advance, the EBL projects require guidance on best practice community
engagement.

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 51

Both local and national governments
Carry out an assessment of coastal communities at a local and national level
Local governments and communities should be consulted to understand the baseline status of economic, social and environmental factors in specific coastal communities.
Baseline assessments could include evaluation of existing jobs and GVA in specific regions, analysis of demographic trends, and cost-benefit analysis to determine the
areas which would benefit most from strategic investment.

Develop a national plan for coastal community regeneration, coordinating with local authorities, communities, and industry for shared understanding of impacts of
different stages of offshore wind projects to local communities
A long-term commitment from the government, in support of growing the offshore wind industry, can provide a stable environment to attract investors and ensure growth.
A long-term vision for energy policy and industrial strategy will build confidence in the market, and ultimately attract infrastructure investment. Therefore, the local and
central governments, as well as across different ministries (i.e Ministry of Trade, Industry and Energy and Ministry of Oceans and Fisheries), should develop clear and
cohesive plans for coastal regeneration and offshore wind development that are informed by engagement with stakeholders. The input of the plan should focus on three

.
pillars:
Engaging with local residents to communicate the potential benefits of offshore wind development and to create a framework for information sharing, as well as to hear

.
their views and concerns

.
Working with the industry and the academia through partnership programmes

Incorporating views of local environmental stakeholders to understand conservation risks

.
Through this input, coastal regeneration can be supported through the following routes:

Economic investment: The government can allocate funds and collaborate on an inter-ministerial level to implement clear policies to upgrade infrastructure or increase
support for the support the development of industrial clusters through financial or other incentives, both of which could generate downstream effects of employment
opportunities. The government can help ensure that the local workforce can benefit from these employment opportunities by supporting reskilling and retraining
programmes. While South Korea has a strong maritime and fisheries industry, there is currently a lack of apprenticeship schemes supporting maritime and marine skills.

.
The government should work with the offshore wind industry and existing research institutions to explore potential avenues for reskilling.

Social investment: Sectorial policies should consider quality and diversity in the offshore wind sector. This could include an encouragement of setting and requirements
for employers across all stages of wind farm development. These policies should inform apprenticeship and training programmes. Partnerships with local diversity organ-
isations will ensure that the specific barriers faced by underrepresented groups are specific to each region. To fully ensure that the benefits of offshore wind development

.
are distributed equitably among South Korea’s population, the government should carry out continued monitoring of progress.

Environmental investment: The government should work with industry to develop programmes to monitor and restore South Korea’s natural heritage, whilst ensuring
that offshore wind development meets environmental standards.

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 52

APPENDIX
 Methodology

.
- Estimation for port and hinterland construction cost is also based on this target

.
- Research findings related to port construction in South South Korea, the United States, and Taiwan were

.
Unit investment costs and supply chain structures for Fixed bottom & Floating OFW is estimated used to determine suitable estimates.
separately. Case 1 & 2 (South South Korea) - estimated cost for creating ports and hinterland complexes

. .
Analysis method of NREL (2022) 139 presented in the Exhibit 14 and Exhibit 15 was adopted for analysis, ranged from approximately 2.2% (at minimum, represented by Case 1) to 5.1% (at maximum,
due to following reasons, represented by Case 2) of the total project cost.141

.
The data on investment costs for completed OFW projects in South Korea is not readily Case 3 (United States) - approximately USD 1.1 billion (KRW 14.85 trillion) is necessary to
available. develop ports and associated vessels to facilitate the timely establishment of a 30GW OFW

. . .
Ongoing projects demand a 15 MW class of turbines that are not yet domestically farm by 2030. 142 It was assumed for the analysis that approximately 70% of this cost is allocated
manufactured. for port construction.
Therefore, international prices were deemed a more valid assumption for this study. Case 4 (Taiwan) - based on available data, the Taiwanese government has invested USD 0.92
Current inflated construction costs were used in the analysis, but the prices are expected to gradually billion (KRW 1.24 trillion) in upgrades to Taichung Port to fulfil Taiwan’s plans to construct a

.
decrease by the mid-2020s when construction begins at full speed. 3GW OFW power complex by 2030.
- The price reduction projections used are in line with the findings from DNV (2022).140 - Various factors (e.g., water depth, sea level, and seabed topography) may affect the cost for port

.
There has been a significant increase in the construction cost of OFW farms globally due to the construction.
recent supply chain bottlenecks. - Final cost for port construction is also determined by whether the specific type of port for OFW utilises
However, renewable energy has successfully demonstrated the economies of scale and a or expands the existing infrastructure or is newly developed.

.
learning curve from market expansion, consistently lowering costs. - For the analysis, five years was assumed as the maximum time required to build berthing facilities and

.
- One standard price was set for both investment and O&M without applying discount containers in South Korea.

.
rates according to time. This is based on the Article 7 of the Harbor Act which states that the amendment to port

. .
This is due to limitations of IO analysis as a static analytical model using a static input-output development plans may take place every 5 years.
model. In the case of Busan New Port, the construction period is planned to be 18 years, from the

.
Dynamic analysis that tracks changes over time requires more information. breakwater construction to the completion of the berthing facilities. However, the construction
Following assumptions were made for estimation of job creation and gross value add the construction period can be shortened if the construction involves expanding the existing port facilities.
and operation of a 14.3GW capacity OFW farm from 2023 to 2030. Average output capacity of an installation port was assumed to be 2GW per year to fulfil the target
- The economic effect for O&M is assumed to be in 2030 only, considering the time it takes for an OFW capacity planned for 2030. The cost of creating and maintaining the installation port and O&M ports
farm to be planned and commercially operated. were estimated accordingly.
- OFW development for 14.3GW is in its initial stages and development phase is expected to last 7 years,
estimated to be completed in years between 2023 and 2029.
- Construction is assumed to continue until 2029, considering the duration and the uncertainty of the
permitting process, with commercial operation only starting in 2030.

.
- For analytical convenience, factors such as inflation and future discount rates were not considered in the
analysis, and the 7 years of construction and one year of operation were treated as a single time frame.
Estimation of investment and cost inputs for port development

Category Case 1 Case 2 Case 3 Case 4

Total Investment 1,866.62 1,866.62 3,807.28 4,548.57

(USD million)

Case 1: Constitutes 2.10% of the total project cost (South Korea)

Case 2: Constitutes 5.20% of the total project cost (South Korea)
Case 3: Based on the estimated cost of port construction required for developing 30GW of OFW by 2030(US)
139
The ratio for port construction and manufacturing specialised vessels is 70:30 (%)
Case 4: Based on the cost of the maintenance and expansion of Taichung Port 140

141

142

GWEC | How Offshore Wind Development Can Support Coastal Regeneration 54