South Korea’s two state-run energy companies - Korea Hydro & Nuclear Power Co. (KHNP) and Korea Electric Power Corp. (KEPCO) - are set to invest in the Ulsan floating offshore wind power project Firefly (Bandibuli), which is currently being developed by Norwegian energy firm Equinor ASA.

The move is seen as part of the Lee Jae-myung administration’s push to expand the share of renewable energy and accelerate wind power development.

The Firefly project is set to become the world’s largest floating offshore wind farm, with a capacity of 750 megawatts (MW). It is located in Korea’s exclusive economic zone, which is around 60 to 70 kilometers east of Ulsan Port.

“We are considering participating in the project by establishing a special purpose company jointly with Equinor,” a KHNP official said. “The stake ratio has not been determined yet.”

Equinor was selected as the sole project operator through a bidding process in 2024.

One of KEPCO’s power generation subsidiaries is also expected to participate alongside KHNP in the investment.

KHNP is likely to oversee the construction and operation of the floating offshore wind facilities in the future. Industry insiders also anticipate that KHNP will secure about a 40 percent stake in the project. Given that Equinor previously announced the total project cost to be 5.7 trillion won ($4.1 billion), KHNP’s investment is expected to total at least 2 trillion won.

However, overall offshore wind project expenses have surged as the cost of raw materials rises, suggesting that the actual investment amount could be much higher.

The construction cost for offshore wind has risen to as much as 15 billion won per megawatt, which means KHNP’s investment could exceed 4 trillion won if this trend continues.

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