Shipbuilder Hyundai Enters European Wind Market with Agreement in Scotland

South Korean shipbuilder HD Hyundai Heavy Industries is entering the European offshore wind energy market as it looking for opportunities to leverage its expertise and expand its presence in offshore energy. The company signed an agreement with two of Scotland’s economic development organizations to jointly pursue opportunities in the emerging floating offshore wind power sector.

Hyundai will be working with Scottish Enterprise and Highland & Island Enterprise cooperating on the development of new offshore wind power projects in Scotland. The organizations agreed to assist in the search for financial support in Scotland and to secure human and material networks for potential suppliers, manufacturing facilities, and investors.

They point to the strong anticipated growth in the next phase of offshore wind energy development and the challenges of moving from fixed bottom to floating structure. The UK has been at the forefront of the development of offshore renewable energy. The UK government has committed to expanding its offshore wind energy sector from its current capacity of approximately 14 GW to 50 GW by 2030. Worldwide wind capacity is expected to jump from 63 GW to 477 GW by 2032 according to the Global Wind Energy Council.

Hyundai says the development of floating wind structures requires design and production that takes into account the harsh marine environment. They highlight their expertise in offshore energy and first efforts in Korea to develop the sector while saying they have the capacity to immediately begin manufacturing large structures without changes or investment within the shipyard.

Under the new agreement, Hyundai working with the economic development organizations plans to pursue floating offshore wind power projects in Scotland. The company will leverage its know-how in designing and manufacturing floating offshore structures and support supply chain optimization efforts.

The Scottish authorities commented that the effort continues their strong progress in the offshore energy sector. Scotland’s government has announced plans for a strategic investment of up to £500 million ($622 million) over five years focusing on ports, manufacturing, and assembly for the next phase of the offshore wind sector. They highlight that Sumitomo recently announced plans for a £350 million ($435 million) investment in a cable factory near Inverness.

The efforts to develop the offshore wind market come as the shipbuilder has had a strong start to 2024 but projects dramatically lower orders. The company cut its forecast for 2024 by nearly 40 percent forecasting orders of approximately $16 billion down from approximately $26 billion in 2023. 

After the first 100 days in 2024, however, the company reports overall it has reached nearly three-quarters of its target for the year. HD Korea Shipbuilding & Offshore Engineering (KSOE), the shipbuilding parent company, reports it three yards booked orders for 86 vessels valued at nearly $10 billion. Hyundai Samho has exceeded its annual target with Hyundai Heavy Industries having received half its annual target.

With competition increasing and orders slowing in shipbuilding, HD Hyundai is looking for new market opportunities. Offshore wind fabrication would leverage its capabilities.