In the era of carbon neutrality, Hyundai E&C is rising to prominence in the domestic renewable energy sector. The Jeju Hallym Offshore Wind Farm Project, which earned the largest and first project financing title in Korea, is a successful track-record of Hyundai E&C, which has formed an organization of experts in environment and renewable energy. Currently, the project is progressing smoothly based on cooperation between different teams and divisions.
[ Ko Kyung-beom (Jeju Hallym Offshore Wind Farm Project), Choi Shin-tak (Civil Engineering Energy Environment Project Team), Lee Eun-kyu (Domestic Renewables Development Team) ]
Q. Different teams engaged in renewable energy business at Hyundai E&C are all here. Please introduce your teams.
Lee Eun-kyu (“LEE”) I'm Lee Eun-kyu, manager of the Domestic Renewables Development Team under the Development Project Division. I joined the company in 2015 and have been engaged in investment and development of IPP (Independent Power Producer) projects in the domestic and international energy sectors. Since 2020, I have led the business development as PM in charge of the Jeju Hallym Offshore Wind Farm Project, and we are currently preparing to sign a PF (Project Financing) agreement. In addition, our Domestic Renewables Development Team was formed in September 2020 to develop new, renewable energy projects more professionally in accordance with the global carbon neutrality and energy transition trends. It covers all areas of project development from major contract review to signing including: ▶ project identification ▶licensing & approval▶ project feasibility analysis ▶ technology, finance and legal review ▶ EPC, O&M, PPA (Power Purchase Agreement ) related with renewable energy.
Choi Shin-tak (“CHOI”) I am Choi Sin-tak, responsible for the development of offshore wind power generation projects in the Civil Engineering Energy Environment Project Team of the Civil Engineering Business Headquarters. Our team was established in July last year and was formed by combining offshore wind power members in the Domestic Civil Engineering Independent Project Team and the Civil Engineering Environment Project Team. Our team's activities are largely divided into offshore wind power and environmental projects. The environmental segment mainly consists of promoting ▶ construction of water supply and sewage treatment facilities ▶ biogasification projects that produce energy using food waste and livestock manure. The members are experts covering all areas of environmental projects, such as technical sales, process design, bidding preparations, and on-site support. The offshore wind power segment involves acquiring stakes in investment project and running EPC projects securing construction rights through competitive bidding without equity investment.
Ko Kyung-beom(“KO”) I am Ko Kyung-beom, responsible for the on-site project support team for the Jeju Hallym Offshore Wind Farm Project. It's even more nice to talk to you through a newsletter than by phone or e-mail. Our site is running a project to install an offshore wind generator with an installed capacity of 100 MW on the sea near Hallym Port in the northwest of Jeju city. The project aims to install 18 5.56MW class generators and electric cables (15.585km under sea, 33kV/ 4.5km on land, 154kV), and while both teams at the HQ worked hard to secure business feasibility and early commercialization of the project, we at the site have been committed to its successful completion.
[ Site workers taking a group photo against the coast of Hallym-eup, Jeju as background, where 18 5.56MW offshore wind power generators will be installed. ]
Q. If Hyundai E&C’s first offshore wind power generation project(EPC project for the Southwest Sea offshore wind demonstrator involving turbines and foundation structures) was a simple contract construction, this one is a project in which Hyundai E&C made an equity investment as a shareholder.
LEE The Jeju Hallym Offshore Wind Farm Project is an investment development project conducted by private businesses, not government-led, through project development, licensing, project feasibility study, equity investment, and PF. It is very symbolic and significant in that it is the largest offshore wind power and the first PF project in Korea. Hyundai E&C, as an equity contributor, EPC contractor and project leader, is leading the project. The company has successfully addressed key issues and risks arising at each and every stage of the project, together with the Civil Engineering Energy Environment Project Team and the site, to ensure project feasibility and successfully initiate the construction.
CHOI The Civil Engineering Energy Environment Project Team and the Domestic Renewable Development Team are “one team” and not bound by R&R per headquarter but cooperate organically in all stages of the offshore wind power project. If the Domestic Renewables Development Team is in charge of project feasibility review (financial, accounting, legal matters) and PF for development projects, EPC will collaborate with related departments (civil engineering design office, overseas civil engineering electric power team, domestic civil engineering quotation team, technical research institute, Jeju Hallym offshore wind power project site) and Hyundai Engineering & Steel Industries to develop technology/machinery and make proposals.
KO From the site’s perspective, the biggest difference from the Southwest Sea site is the power generation capacity per unit of offshore wind power. The installed capacity of our site’s one unit is 5.56MW, about 1.9 times that of the Southwest Sea site (3MW). The weight of the jacket, which is a foundation structure, is also three times heavier (450 tons). The seabed ground where the jacket is installed is soft in the southwest sea, but the ground on our site is bedrock(basalt). Another difference is we are the first to carry out undersea cable construction in our company.
[ The Civil Engineering Energy Environment Project Team is divided into an environmental segment carrying out water and sewage treatment facilities construction projects, biogasification projects, and an offshore wind power segment implementing EPC projects for offshore wind power. ]
Q. What efforts are each team making to carry out the project successfully?
LEE Since it is the first offshore wind power PF project in Korea, many standards and norms have not been established. During the negotiation process, there were endless consultations between Hyundai E&C and other shareholders (KEPCO, Korea Midland Power Co., Ltd., KEPCO E&C, etc.). In this process, we can proudly say that Hyundai E&C’s abundant PF and EPC experience played a major role in guiding the direction for decision-making.
CHOI As the saying, "Offshore project is all about a struggle with machinery,” goes, machine/equipment accounts for a considerable proportion in offshore wind farm construction. Our team is developing dedicated equipment as a national project with Hyundai Group subsidiary, Hyundai Engineering & Steel Industries, to lead the offshore wind power market. One significant achievement is Frontier vessel, a large, 14,000 ton-class offshore wind power installation ship. It is the largest in Korea and can install a 10MW large wind power generator. In line with the name Frontier, it is expected to rise to its status as a frontier and pioneer in the domestic offshore wind power market. In addition, technology development for “Localization of Pre-Piling Method” is currently underway. We believe this technology will drastically reduce the overall construction period of offshore wind power projects led by Hyundai E&C.
KO All employees of the Jeju Hallym Offshore Wind Farm Project are working around the clock every day for the successful completion of the project. After March 2021, when the EPC contract was signed, the project was progressing slowly due to opposition from some residents. To address this issue, site employees under Director Kim Hyun-il’s leadership have resided in Jeju Island since June last year to explain the legitimacy of the project and persuade the residents. As a result, we received the initiation order at the end of last year and were able to fully implement the construction from this spring. Moreover, the design team, the execution team, and the public affairs team at the site worked together to make sure that the optimal method considering constructability and economic feasibility could be incorporated in the final design.
[ The Domestic Renewables Development Team covers all areas of business development, ranging from identifying new renewable energy resources to signing major contracts such as project feasibility study (financial, accounting, legal matters) and financial agreements. ]
Q. Why is offshore wind a future growth driver and gaining special attention as a green project?
CHOI In its journey towards “transition to a renewable energy-oriented clean energy system,” Korea has established the “Renewable Energy 3020 Plan” to increase the share of renewable energy to 20% (at least 60 GW) by 2030. Among them, it aims to deploy at least 12 GW of offshore wind power.
LEE The reason why offshore wind power accounts for a large portion of the government's renewable energy mix plan is that it has great advantages for being green energy resources, with the possibility of developing large complexes, and high availability. It is expected that the inter-connectedness between manufacturing industries including shipbuilding, machinery, and steel and the construction industry will be great, and their synergy on job creation will also be positive for revitalizing local economy.
KO You two explained it very well. Offshore wind power is a clean energy based on wind, and no harmful substances are generated during the actual power generation and operation. However, noise, vibration, and suspended sediments may inevitably occur during the construction process, and many teams at the site and headquarters doing their best to minimize this impact as well.
Q. Finally, what else is needed for Hyundai E&C to secure strong competitiveness in offshore wind power?
LEE It is important to secure a dominant market share by developing additional projects based on the investment development and construction experience of the Jeju Hallym Offshore Wind Farm Project. I believe we have to continuously develop technologies to reduce costs and develop project management capabilities to boost competitiveness that sets us apart from other companies.
KO It is also crucial to strategically cultivate offshore wind power experts who can manage construction, quality, and safety in an integrated manner. To be readily prepared to take on offshore wind farm projects taking place at multiple fronts, we should also strive to identify and work with excellent partners in areas that require expertise such as building vessels like Frontier and laying undersea cables.
CHOI Becoming the first-mover in the blossoming domestic market should be our priority. Hyundai E&C is the only builder in Korea with “development & EPC track-record” and has the competitive edge to secure the leading position in the domestic offshore wind power market. Currently, we are preparing to commercialize a large-scale offshore wind power project of more than 300MW. To ensure its commercial viability, we are seeking to speed up the localization of the “pre-piling method” used in advanced European markets and build additional offshore wind power lines that can install large-capacity turbines (12~20 MW). Hyundai E&C is seeking to enter overseas markets after dominating the domestic offshore wind power market. Both the headquarters and the site are making every effort to achieve this, so we ask for your continued support and interest. Thank you.
Jeju Hallym Offshore Wind Power Project Site
The Jeju Hallym Offshore Wind Farm Project Site is Hyundai E&C’s second offshore wind power project and the first offshore wind power project financing (PF) project. After Hallym-eup, Jeju, was designated as a pilot zone for offshore wind power generation in December 2013, Hyundai E&C (10% stake) made joint equity investment with KEPCO, KOMIPO, and KEPCO E&C to establish Jeju Hallym Offshore Wind Power Co., Ltd. and conduct the development project as a shareholder.
Moreover, Hyundai E&C (51.2%) formed a consortium with KEPCO, Korea Leading Energy Management (KLEM), , and Shindaehong E&C to lead the offshore wind farm project in Hallym, Jeju. The total construction cost is 542.6 billion won, and the estimated date of completion is October 31, 2024.
The site, which began construction in December last year, aims to build 18 5.56MW offshore wind turbines off of sea at Hallym-eup, Jeju city. Hyundai E&C is in charge of manufacturing and installing ▶ lower foundation structures (18 units) ▶ installing upper main offshore wind turbines(18 units) ▶ 33kV offshore and subsea cables of 15.585 km and construction of auxiliary facilities.
The clock on the site is already busy ticking. At Hyundai Engineering & Steel Industries Yulchon Plant, foundation structures serving as the backbone of the offshore wind turbines are being manufactured at full-speed. One quality manager is stationed at the site to ensure timely delivery and best quality. The foundation structure is built in a jacket type. The jacket type is a method in which the jacket pile is firmly fixed by hitting or drilling the undersea sediment and rock layers, and then wrapping the pile around with a jacket structure. As it is embedded about 17m from the sea floor, it supports very well and is also effective for protecting wind power generators from risk factors such as pile corrosion and collision.
Jeju Island's undersea strata are mostly composed of basalt. Drilling hard basalt is an unprecedented attempt made in Korea, and we plan to manage the process by closely keeping an eye on the site conditions, by adjusting equipment and manpower input plan according to the actual drilling progress. Construction of a 15.585-kilometer subsea cable at a depth of 40 meters underground is also the first challenge took on by Hyundai E&C, and it is making full preparations to also introduce a GPS-based submarine 3D monitoring system.
[ A bird's eye view of the 14,000-ton large offshore wind farm installation vessel Frontier, which is being built as a national project with Hyundai Engineering & Steel Industries. ]
In particular, the 14,000-ton vessel Frontier, which is being developed and built by Hyundai E&C and Hyundai Engineering & Steel Industries, will be introduced at the site of the Hallym Offshore Wind Farm Project in Jeju. It is a self-moving jackup barge designed in the form of a ship that can be worked on all subsea terrains in Korea. It is expected to upgrade Hyundai E&C’s offshore wind power construction capability to the next level as it is integrated with ships and cranes for heavy lifting (self-weight 800 tons) and can install up to three turbines at once. On-site workers shared their ambition that, “with the successful completion of the site, we will strive to become an unrivalled leading construction firm in the domestic offshore wind power market."