The government has decided to extend the contract period for fixed-price bidding for offshore wind power from the current 20 years to 25 years, according to reports on the 27th. If the contract period is extended, offshore wind power operators will have more time to recoup their investment, allowing them to lower their bid prices. The extension is expected to take effect as early as the second half of next year.
Fixed-price bidding for offshore wind power was introduced in 2022. Under the system, the operator that proposes the lowest electricity price is guaranteed a fixed price for the next 20 years. The government can procure electricity at a lower price, and the operator can secure stable revenue. An industry official said, "Offshore wind power requires initial construction costs in the trillions of won, so without price guarantees, it is difficult to push projects forward."
The extension of the contract period for fixed-price bidding for offshore wind power was requested by the industry. If the contract period is longer than now, operators can earn stable revenue while also extending the time to recoup their investment. This could lower the electricity prices they offer in bids.
The government is expected to apply the contract extension as early as the second half of next year. However, it is reviewing whether to uniformly extend the contract period to 25 years or allow operators to choose a term within the 20–25 year range.
A government official said, "The direction to extend the contract period from 20 years to 25 years has been set, and the key is how much this can lower the unit price."