Hyundai Heavy Industries a Key Player in Asian Wind Power Development

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Researched by Industrial Info Resources (Sugar Land, Texas)--Hyundai Heavy Industries Company Limited (KRX:009540) (HHI) (Ulsan, South Korea) is the world's largest shipbuilder, producing at least 15% of the world's ships. In recent years, however, HHI has been moving in a different business direction: wind power. In 2008, HHI announced that would explore South Korea's wind potential and began developing wind turbines. HHI's ambition eventually expanded past South Korea to the United States, Europe and China, as it aimed to become one of the top 10 producers by 2015. Within two years, HHI became Korea's largest wind turbine manufacturer, producing 600 megawatts (MW) of wind turbines annually at its site in Gunsan, South Korea.

South Korea has been in a state of renewable energy revolution for the past few years, working to promote a "carbon-neutral society" and hoping to become one of the top five global players in the renewable-energy and clean-energy sectors. Government officials recently announced a $36 billion, five-year plan that would feed directly into sustainable energy development, support and promotion. Already, South Korea is becoming well-known for its nuclear program, having won the rights to build not only the United Arab Emirates' first nuclear power stations, but also the tender to supply Jordon with its first research reactor. South Korea also has become increasingly active in the Asian community in terms of renewable energy support. Korea International Cooperative Agency (KOICA), on the behalf of the government of South Korea, recently pledged aid to Fiji and other Pacific Island countries to better the region's renewable-energy systems.

In the wind-power arena, South Korea is growing fast. Wind power currently accounts for about 1% of the world's total energy production, though that figure is expected to climb to more than 20% by 2014 with roughly 400 gigawatts (GW) globally of installed wind-generated electricity. Asia is expected to account for 10% on its own by 2020, though it could happen faster as HHI expands. Though it entered the market later than other domestic competitors, HHI is already expecting to see a $1.7 billion increase in sales within the next year or so as its new wind turbine manufacturing facility is brought online in China.

In January, HHI signed a preliminary agreement with Korea Southern Power Company Limited (KOSPO) to assist Pakistan with its power shortages. The two companies are hoping to have a 50-MW windfarm commissioned by the end of next year to provide at least 60,000 homes with sufficient electricity. South Korea also has recently announced that HHI will be providing wind turbines to a $8.2 billion offshore windfarm to be completed in 2019. The offshore windfarm will be partially funded by the government through the new five-year renewable energy plan, and it is on the table for 2,500 MW. Officials at HHI confirmed the news of involvement in the offshore windfarm, saying that HHI and another South Korean firm would be working together to supply turbines. Because the government will be heavily involved in the project, HHI declined to give further comments.

Domestically, HHI is working closely with provincial governments to increase Korea's installed wind power capacity. One such project, taking place in North Jeolla Province, will invest $500 million to install about 200 MW worth of windfarms through eight districts. HHI concluded a memorandum of understanding with North Jeolla government officials and will be working closely with KOSPO on at least one of the eight windfarms. Once the entire North Jeolla project is completed by 2012, the eight windfarms will generate enough energy to power nearly 20% of the province's homes, roughly 876,000 barrels of oil equivalents, and cut CO2 emissions by about 210,000 tons.

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