Overview of

the Offshore Wind Projects

in Korea

June 28, 2016

Korea Wind Energy Industry Association

Dr. Rimtaig Lee, the Chairman

Energy Mix of Electricity in Korea (as of end of 2015)

“Low Carbon & Green Growth” strategic focus to be continued… CO2 37% reduction committed in COP 21

Aggressive target on Renewable energy growth by 7th National energy plan

Tariff system change… FIT(Feed-in Tariff) to RPS, effective Jan 2012

“Cap & Trade” regime in place since 2015… to be applicable to entire industry

Korea Wind Industries

Key components MFR e.g. forged products, tower, bearing, gearbox, shaft, generator well proven by global WTG OEM’s

Need track record for offshore WTG… seeking global market

4 MFR’s developing MW class WTG’s

Domestic shipbuilders(DSME, Samsung) delivered installation vessels but declined to fabricate WTG.

Policy/ Regulation

MFG and R&D

Effective in Jan 1st 2012, targeting 10% by year 2022… Wind energy is a major contributor to meet RPS target

> 500MW of power producers(14 co’s) are obliged to supply renewable energy as much as the rate given below… aggressive target !!

Year `12 `13 `14 `15 `16 `17 `18 `19 `20 `21 `22

Rate(%) 2.0 2.5 3.0 3.5 4.0 5.0 6.0 7.0 8.0 9.0 10.0

RPS Regime

National Power development plan(7th)

Year 2015 2020 2025 2029 CAGR(%)

Total Installed

Capacity MW 92,438 119,809 129,292 136,097 2.8%

Re Energy * MW

(%)

7,335

(7.9%)

17,273

(14.4%)

26,098

(20.2%)

32,890

(24.2%) 11.3%

Total Demand TWh 489.6 588.3 631.7 656.9 2.1%

Supplied by

Re Energy *

TWh

(%)

23.9

(2.5%)

50.7

(4.4%)

66.6

(8.3%)

83.1

(11.2%) 9.3%

Wind (% of RE) MW

(%)

732 (9.9%)

3,588 (20.8%)

5,884 (22.5%)

8,064 (24.5%)

18.7%

GDP Growth 3.5% 3.3% 2.5% 2.3% 2.9%

Aggressive target for Renewable energy… 11.3% CAGR and, 18.7 % for Wind capacity over next 14years

11.2% of supply by Renewable energy in 2029

*including Hydro Source: MKE(2015.7)

West-South Sea Off shore 80MW/2.5GW

• Test bed(80MW): 2016 ~2019 •Obtained Gov’t permit and under final settlement on local resident issues

Planned Off-shore Sites

Jeollanam-do 520MW/5GW

•2020 ~ 2030 •Consist of; - 1GW On shore - 3.5GW Off shore

•Pilot project; -300MW(2015~2020) -200MW(2016~2020) -Under permit process

Jeju-do 595MW/2GW+

•Off-shore: -30MW: under construction -200MW: F/S in process -365MW: under permit processes

Gyungnam-do 180MW/540MW •Under permit process

Site map of wind farms on and offshore in Korea

Value Chain

Blade Bearing Tower/ Forging Gen Gearbox

Farm design

Cable Inverter

Diagnosis /Grid

Components

Development +

• KM • DACC • Doha

• CS Wind • Dongkuk • Unison • Taewoong • Pyungsan • Hyunjin • Yonghyun BM

• Hyosung • Doosan • Woorim

• Yonghyun BM • Shilla Precise • Iljin

• Hyosung • Hyundai • Bokuk

• Hyundai • Hyosung • Plaspo

• Unison • Hyundai • KEPCO E&C • Doarm Eng

• KERI • KEPCO

Supplier/

Pro

vid

er

• LS Cable • Haechun

Sub-Structure

• HHI • Hyundai E&C • Doosan • Yoosin • GS E&C

O&M

• (6)Genco’s • SK D&D • JEC • Hanshin

Major outsourcing partners with global WTG OEM’s;

- Taewoong for Shaft

- Hyunjin and Yonghyun for forging material/shaft

- Shilla for bearing

- CS Wind is a strong player in the tower market having manufacturing base in Vietnam/China/ Canada

Other service providers are active; - Doarm Engineering, KEPCO E&C for FEED and windfarm development

- JEC, GenCo’s for windfarm operation and maintenance

Strategic Direction

Improve Competitiveness of

Supply Chain

Sustainable Growth

Develop more new sites for both on & off-shore including test bed… to get certified with track record Seek global market

Support for Grid connection, Permit, Forest conservancy, Public acceptance and so forth

Support R&D activities to develop new tech, optimum design and improve CoE to reach grid parity Korea brand

Move forward to larger WTG, further shore application improving total engineering capability for off-shore

Actively pursue overseas projects

Earlier Commercialization of Floating off shore wind

Re-look at supporting structure in policy/regulation

Create Sustainable Domestic Market

To Become a Global Leader…

Cooperative Activities between Korean and Norwegian Wind Industries

MOU signed between Korea Wind Energy Industry Association and Innovation of Norway on May 15, 2012 for the close cooperation between wind industries of two countries.

Korean Offshore wind delegates visited Norway during 11th ~ 13th September, 2012.

Korea – Norway Offshore Wind Technology Seminar held on 18th October 2013 in Seoul.

Potential Business Area to be cooperated between Norwegian and Korean Wind Industry: Floating Offshore Wind Facility R & D for cost reduction of AEP Supply Chain System Development