Korea's Strategy for the Global Renewable Wind Energy Market
Offshore Wind Farm
By Don Southerton, CEO Bridging Culture Worldwide
Early in recent global recession, the South Korean government determined Green and renewable energy technology would be a key growth engine for the ROK economy. A number of Korea firms quickly embraced the mandate. Each week I see these efforts unfolding. For example LG Chem (through its subsidiary Compact Power) will be building a huge battery production facility in Holland, Michigan. Meanwhile Hyundai Heavy Industries is supplying wind power turbine technology to a number of U.S. renewable energy projects. Other Korea based firms such as Seoul-based CT&T’s U.S. subsidiary and Spartanburg-based 2AM Group will make low-speed electric vehicles at its first North American production
This Samsung Economic Reseach Institue (SERI) provides gives a great overview of Korea's renewable energy (i.e. wind power) industry. SERI LINK
Korea's Wind Energy Industry Eyeing Overseas Markets
The Korean government's push for green growth engines is prompting the nation's heavy manufacturers, including ship builders, to team up with alternative energy companies to tap sea wind power .Since climate and geographical conditions do not favor a domestic wind power system the aim is to export wind power. Competition against European, Chinese and U.S. companies will be formidable. Success will depend on technology, market share and financing.
Korea's Potential for Success
Wind power, the most price competitive among new and renewable energy resources,1 is seeing a fast expansion in the global market and drawing attention as one of Korea's new growth engines. As a global leader in heavy industry including shipbuilding and heavy machinery, Korea has the potential to rapidly become a global player in wind energy, an applied field of heavy industries. However, Korea 's geographical conditions are not very suitable for wind power generation complexes due to the small landmass and limited wind in many regions. These unfavorable conditions serve as a driving force for Korea's wind power industry to search for markets overseas. Based on its world class machinery and shipbuilding infrastructure, Korean companies have the potential to enter the wind power industry somewhat easily. What's more, they can get most of the related parts from domestic suppliers.
For these reasons, Korea 's heavy industry companies and parts manufacturers are entering the wind power industry one after another, with the majority looking to overseas markets. However, markets in industrialized countries seem to be a hard nut to crack for latecomers like Korea , especially with technical and financing barriers hindering a smooth entry. This paper takes a look at the current situation of Korean companies' advances into wind energy markets and makes recommendations for success in the global market.
Global and Korean Wind Energy Markets
Despite the recent global financial crisis, global wind energy markets have been growing at an annual average of 31.7 percent over the past five years. Amid the financial crisis in early 2009, most organizations specializing in wind energy predicted that the market would remain or shrink in 2009 compared to the previous year. However, when measured by newly built capacities, the market grew by 41.5 percent from 26 GW in 2008 to 38 GW in 2009,2 driven by China and the United States. At the current pace, new capacities are expected to reach 40 GW in 2010, nearing 200 GW total. And, by 2015, the global wind energy market is forecast to reach $90 billion, which is equivalent to the current market of the shipbuilding industry.
The key contributor to the rapid growth is greater government support for wind energy industries in the