The latest company to abandon its previous ambitions to engage in offshore wind development is Shell, which has agreed to sell the controlling stake in one of the biggest projects in South Korea. When Shell first invested in the project in 2021, it stated that it saw offshore wind energy as a crucial component of a net-zero energy system. However, more recently, Shell has sold its wind investments in favor of other economic ventures.

In accordance with the agreement made public today, Shell will sell its 80 percent share in the MunmuBaram project in South Korea to its Swedish partner Hexicon, a pioneer in the development of floating wind projects. Hexicon states that Glennmont Partners, one of the biggest infrastructure funds specializing in sustainable energy in Europe, is providing backing for the acquisition. The business will use its credit line, with Glennmont giving Shell $5 million up front to assume full control of the MunmuBaram joint venture. Additionally, the arrangement gives Shell a profit-sharing payment of up to $50 million spread over three years.

“South Korea continues to be a leading market with good conditions for the development of floating offshore wind. Through this transaction, South Korea remains a core market for Hexicon and strengthens our position as a leading global developer of floating offshore wind,” says Marcus Thor, CEO of Hexicon.

Hexicon started measuring and gathering data at the project site in August 2020, after starting work on the project in 2018. While the project was still in the feasibility assessment stage, in September 2021, the joint venture with Shell was established. Shell emphasized its lengthy history in South Korea, wind energy’s enormous potential, and the company’s growth into floating wind at the time.

“Korea’s capabilities in the fabrication of offshore facilities and shipbuilding could play a pivotal role in the development and fabrication of floating offshore wind foundations not only for Korea but also for the region and beyond,” said Joe Nai, Shell’s General Manager, Offshore Wind Asia announcing the 2021 partnership.

The wind farm that will be built as part of MunmuBaram is expected to generate 1.125 GW of electricity. It will be situated off the coast of Ulsan City in southeast Korea. They suggested 84 wind turbines in 2022, naming Vestas and its 15 MW turbine as the project’s preferred supplier. The geography at a point 40 to 50 miles offshore will necessitate the use of floating wind turbines. Hexicon offers a unique floating wind system that uses two turbines on a single platform for foundations.

In South Korea, the enterprise has advanced well, obtaining the necessary power licenses to build the wind farm. Additionally, they signed a provisional offtake contract for an industrial user. One of South Korea’s industrial hubs is Ulsan.

According to Hexicon, in terms of megawatts, South Korea will account for about 15% of its net portfolio.

According to Shell, it operates more than 2 GW of offshore wind. It had disclosed the existence of its pipeline and the potential for over 9 GW. Shell has left a number of projects, including two planned windfarms in Ireland that were scheduled to open in September 2022, even though they still have roles in wind energy in Norway and the UK. Following its 2019 acquisition of French floating wind expert Eolfi, Shell was reportedly getting ready to sell the business in May 2023. At that time, Wael Sawan took over as CEO, and the company stated that its primary goal would be to increase value for shareholders.