Is Northeast Asia set to lead the second surge of floating offshore wind?

The Northeast Asian markets are starting to move with South Korea taking a lead.

After some initial years of great opportunism and a surge to secure floating offshore wind sites around the world, 2023 and the beginning of 2024 was marked by a continuous string of setbacks for the nascent industry. However, the Northeast Asian markets are starting to move with South Korea taking a lead and awarding the 750 MW Firefly floating project, which is now set to be developed by Equinor and provide first power in the early 2030s.

Willingness to pay, political commitment and a dependence on floating technologies

The offshore wind sector has struggled with rising inflation, pressured supply chains and uncertainty in many markets – and the unproven technology of floating offshore wind turbines has further struggled to find its footing as higher costs and lower learning rates meant that commercial-scale projects are pushed further into the future than expected. Previously, large-scale projects were anticipated by 2030, but the commercialisation of floating offshore wind now seems more reasonable for mid-decade.

Whilst some markets are turning away from the floating technologies, markets in Northeast Asia have shown a willingness to pay for the nascent technology. In South Korea, an auction roadmap was launched in August 2024, which includes a target to allocate offtake for 2.5-3 GW of floating offshore wind – and the government took a major step in December 2024, when Equinor’s 750 MW Firefly project off Ulsan was awarded a PPA. This marks the largest offtake contract for a floating offshore wind project in the world today and clearly shows a willingness to pay despite this entailing a cost premium for the country. The step puts South Korea in a prime position to potentially becoming a global leader within floating offshore wind.

In addition to the positive developments in South Korea, the Japanese government has continuously provided funds to several pilot projects with large-scale turbines on floating foundations. These projects are aimed at developing the country’s supply chain and capabilities within floating technologies. So far, Japan has been confined to develop its margin options in fixed-bottom areas, but most of the country’s potential for offshore wind is in waters suited for floating offshore wind. The parliament is currently finalising legislation to enable the consideration of the entire exclusive economic zone for offshore wind, which until now has been confined to territorial waters.

A challenged industry arising anew in Northeast Asia?

Offshore wind is an investment-heavy business and the prospects to assert your market as the go-to place for floating offshore wind developers and investors could present a major opportunity for foreign investments. As markets in Europe and the US have seen a general withdrawal from floating offshore wind, markets in Asia-Pacific could become the new center for floating offshore wind.

The offshore wind intelligence company Aegir Insights is currently forecasting floating offshore wind to reach 1.3 GW by 2035 in Asia-Pacific, but the region has the potential to change this. With increasing electricity demand and common targets for decarbonisation, the entire Asia-Pacific region is in dire need of new sources of clean energy. High prices must be expected for the initial floating offshore wind projects, but if significant funds are put into the development and commercialisation of the industry, the scalability and standardisation perspectives of floating technologies could foster an accelerated build-out. This would serve both the countries’ targets of decarbonisation, energy security, and economic growth and could enable global leadership within a new technology for Northeast Asia.