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Korean Ministry Thinks $10 Trillion Asset Manager Can't Afford Wind Farms

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Published Jan 30, 2024 4:06 PM by The Maritime Executive

South Korea's energy regulator has determined that a subsidiary of BlackRock - the world's largest asset manager - has not demonstrated financial capacity to build a two-gigawatt offshore wind complex on the nation's southern coastline. 

As of January, BlackRock has about $10 trillion in assets under management worldwide, more than the combined assets of the American insurance sector. Subsidiary Blackrock Real Assets owns Korea Renewable Energy Development & Operation Holdings (KREDO), the parent company of South Korean developer KREDO Offshore. KREDO Offshore applied for a business license to install 200 wind turbines off the coast of four islands in Sinan, a high-potential region for wind power generation. The license application divided the two-gigawatt project up into five separate wind farms; taken together, the complex would be the largest in South Korea when completed. The cost would be substantial: $7.5 billion, not including long-distance transmission infrastructure.

According to South Korean media, the Ministry of Trade, Industry and Energy has rejected all five of the Sinan projects. 

The first issue that the ministry identified with Kredo Offshore's proposal was a "lack of documents to prove financial ability for the potential project," according to the Korea Herald - even though the parent company manages assets worth more than five times the annual economic turnover of South Korea.

The second issue was a lack of grid capacity to handle another two gigawatts of power. Sinan is a rural area and does not have the transmission infrastructure to absorb that much electricity, according to the ministry. The government has plans to develop a long-distance DC subsea transmission line to connect renewables projects in Sinan with power-hungry markets in Seoul - but not for another 12 years. According to the ministry, only one of the five Kredo projects would be able to supply its power to the local grid.