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Taiwan developers miss deadline

4C Offshore | Tom Russell
By: Tom Russell 02/01/2019 4C Offshore
Four developers looking to establish six projects off the coast of Taiwan have lost a race against time to secure Power Purchase Agreements (PPA) with new feed-in tariffs (FIT) coming into force in 2019.

The six projects lack the approval from the Changhua County Government which the Bureau of Energy requires to move forward with the PPA negotiation stage. The County confirmed today that there is not sufficient time to finish going through all the documents before the deadline.

The 2019 feed-in-tariff has not been decided yet. However, in November 2018 the Taiwanese government proposed a 2019 feed-in-tariff of NT $5106 (approx. EUR 145) per MWh, a decrease of 12.71% from the 2018 rate of NT $5800/MWh, and suggested a production cap of 3,600 annual full-load hours.

Offshore wind giant Ørsted is one of the unfortunate developers unable to secure a PPA for the 900MW
Changhua 1 and Changhua 2a projects due to be generating power in 2021. The company states that this could affect the contracts it has signed with several local suppliers and its decision to be made in March 2019 on further investment in Taiwan.

Martin Neubert, CEO, Ørsted Offshore, commented: “We’re disappointed with the process and the delay of the establishment permit and PPA. We will now pause and revisit all our project activities, the timeline of the projects, and our supply chain commitments and contracts as we had assumed signing of the PPA in 2018. We’re very concerned about the suggested feed-in-tariff level for 2019 as well as the newly proposed cap on annual full-load hours. We will need to see significant changes to these proposals before we can progress any further towards a final investment decision on the projects.”

The feed-in-tariff needs to reflect the extraordinarily high costs faced by Greater Changhua 1 and 2a, mainly related to creating a local supply chain at scale, reinforcing the onshore grid infrastructure and building, operating and maintaining offshore wind farms in challenging waters where typhoons and earthquakes occur.

“The proposed retrospective changes would jeopardise the creation of a local offshore wind supply chain, harm the planned transition to renewable energy and cause significant uncertainty among international investors looking to Taiwan. Only with a stable and predictable policy framework, Taiwan has the potential for developing large-scale clean power production while creating thousands of local jobs and becoming a hub for offshore wind in Asia-Pacific,”
says Martin Neubert.

Developer Swancor was fortunate enough to have agreed a
PPA with Taipower last month (12 December 2018) for the Formosa II offshore wind farm off the coast of Taiwan. The 20 year agreement is a step forward for the 376MW project which is expected to supply up to 380,000 households annually. The project follows the 8MW Formosa Phase 1 demonstration project installed in 2016, Taiwan's first offshore wind power plant.

For more information on the projects concerned or on the Taiwanese offshore wind market overall,  
click here. You can also view projects worldwide on 4C Offshore's Interactive map.


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