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2025 Vol.45, Issue 1 Preview Page

Research Article

Estimation of Variability in Internal Rate of Return for Korea Offshore Wind Projects with Financing Conditions

국내 해상풍력사업의 프로젝트 파이낸싱 조건에 따른 내부수익률 변동성 추정

Keon-Woo Lee1
,
Kyung-Nam Ko2*
이 건우1
,
고 경남2*
1Ph. D. Candidate, Multidisciplinary Graduate School Program for Wind Energy, Graduate School, Jeju National University
2Professor, Department of Electrical and Energy Engineering, Jeju National University
1제주대학교 대학원 풍력특성화협동과정, 박사과정
2제주대학교 전기에너지공학과, 교수
*Corresponding Author
28 February 2025. pp. 77-89
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Abstract

An investigation into the variation in revenue based on project financing conditions was conducted for 20 offshore wind projects in Korea permitted by the government. Capital Expenditures (CapExs) and Operational Expenditures (OpExs) for these projects were estimated using data from a government commission and a report by the U.S. National Renewable Energy Laboratory. Wind speed distribution estimates for Korean territorial waters were used to calculate the annual energy production (AEP), leading to the determination of the capacity factor (CF), assuming the installation of 18 reference 15 MW wind turbines from the International Energy Agency (IEA) at the 20 project sites. Next, financial assumptions were established to compute the Internal Rate of Return (IRR), considering interest rates of 4.5%, 5.5%, and 6.5%, loan periods of 12, 15, and 18 years, and debt levels of 50%, 60%, 70%, 80%, and 90%. The results showed that equity IRR increased with a higher percent of debt, but the variability in IRR also grew, indicating higher financial risk. As the loan period lengthened, interest payments increased, leading to a reduction in taxes for the projects.

Keywords
Wind energy
Engineering economy
Percent of debt
IRR
Offshore wind energy
키워드
풍력에너지
경제성공학
타인자본 비율
내부수익률
해상풍력
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Information
  • Publisher :Korean Solar Energy Society
  • Publisher(Ko) :한국태양에너지학회
  • Journal Title :Journal of the Korean Solar Energy Society
  • Journal Title(Ko) :한국태양에너지학회 논문집
  • Volume : 45
  • No :1
  • Pages :77-89
  • Received Date : 2025-01-10
  • Revised Date : 2025-01-24
  • Accepted Date : 2025-02-08
  • DOI :https://doi.org/10.7836/kses.2025.45.1.077
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