Korea’s National Assembly promulgated an amendment to the Act on Assistance to Electric Power Plants-Neighboring Areas (the “Power Plant Areas Act”) on February 4, 2020.  The amended Power Plant Access Act will become effective on August 4, 2020.  

Because the Power Plant Areas Act currently applies only to power plant “neighboring areas” defined as “land or island” areas located within a five kilometer radius of planned or installed power generation facilities, the application of its subsidy programs is quite limited with respect to large-scale offshore wind power plants currently being developed in Korea.  

The January 9, 2020 amendment of the Power Plant Areas Act, however, will expand the scope of “neighboring areas” in the case of offshore wind farms to include any Korean local administrative unit (i.e., any eup, myeon or dong) within two kilometers of the nearest shoreline from a wind turbine generator even if no “land or island” is located within a five kilometer radius of any such generator.  We anticipate that this amendment will play a major role in resolving residential approval issues that have hindered the development of large-scale offshore wind farms in Korea to date.   

The Korean government committed in December 2017 to implement the “Renewable Energy 3020 (RE 3020) Plan” which resolves to increase the renewable energy share of Korea’s total energy generation to 20% by 2030, 97% of which additional capacity is targeted to source from solar and wind power (which plan was further expanded by the “Third Basic Energy Plan” announced in June 2019 to a target of 35% renewables derived from 63% solar and 32% wind sources by 2040).  However, local stakeholders attempting to extract higher compensation from developers by delaying required approvals have so far stymied the development of the large-scale offshore wind farms required to achieve these targets. 

It is expected that the amendment of the Power Plant Areas Act will catalyze the resolution of compensation negotiations with local communities near prospective offshore wind farms.