Zero bidders buy their way into Taiwanese offshore wind

Taiwanese offshore wind projects totaling close to 5 GW capacity have been approved by the Taiwanese environmental authorities. Besides Ørsted, CIP has also received a nod, while a German player is ready to leap into the global market with EUR 5 billion.
Photo: EnBW
Photo: EnBW

Yet another player has announced its arrival on the Taiwanese offshore wind market. German utility ENBW has bought a 37.5 percent share in one of the three offshore wind projects with a recommended 2,000 MW capacity to be developed by Swancor Renewable with support from Australian investment fund Macquarie. The news was announced by the company Monday morning.

The acronym stands for Energie Baden-Wüttemberg, a nod to its presence in Germany. So far, ENBW has followed a rather German strategy when it comes to offshore, where the company is currently working on the projects Hohe See and Albatros after previous installations of Baltic 1 and 2. Meanwhile, the major 900 MW project He Dreiht will be installed in 2025, after securing the project in last year's German tender with a zero subsidy bid.

The German utility aims to invest over EUR 5 billion in the development of renewable energy ahead of 2025. However, the acquisition – with a yet to be announced price – in the three Taiwanese projects marks the first time that the company has operated beyond its national borders in the hunt for offshore wind.

"In moving into project development in Taiwan, we have opened the latest chapter in our offshore wind activities. The expertise that we have built up in the offshore wind sector in the last few years is in demand worldwide, and we want to export it," said Dirk Güsewell, the company's head of generation portfolio development.

"That's why we are also setting our sights at new international offshore wind markets that offer growth opportunities and an attractive economic environment, so that in a first step we can start by developing selected projects ready for construction."

While offshore wind prices over the past two years have shrunk significantly on the increasingly mature markets in Europe, the development in Taiwan is a little different. In the Autumn, the country increased its target from 3.5 to 5.5 GW in 2025. Of these, the best 3 GW secured a guaranteed launch tariff of TWD 7.1085 / kWh (DKK 147 /kWh) in the turbine's first ten years and TWD 3.4586 in the subsequent ten.

The reasoning behind the subsidy is the need to incentivize the creation of a sustainable supply chain in the country. Several western companies have also announced their arrival on the market, where besides the three projects, ENBW has bought into also include a further 8 GW under installation. Including from the German company's fellow zero-subsidy bidder, Ørsted, which has four projects with 2.4 GW capacity underway.

Ørsted announced Friday that the company's projects had received the necessary approval from the Taiwanese Environmental Protection Administration (EPA.) The four projects in the Greater Changhua have a capacity of 570, 598, 613 og 645.5 and will consist of between 218-301 offshore wind turbines, which are expected to have a capacity of approximately 8 - 11 MW each.

Meanwhile, Swancor also received a green light for its three projects in the Formosa 3 zone, which will now welcome the Germans on board, reports local media Taipei Times. The projects – 552, 720 and 732 MW – and with Ørsted on board now await turbines of 8 MW and a maximum 10.5 MW.

Another project developed by China Steel together with Copenhagen Infrastructure Partners (CIP) and Mitsubishi has also been approved. The 500 MW project is expected to employ turbines from the current 6-9.5 MW generation. CIP is further developing two other projects at 600 MW each together with Chinese firm CSBC, but these cases were not considered by EPA Friday.

Altogether, projects totaling 4,930.5 MW seem to have been approved. Adding the two pilot projects which have already been approved – Taipower's 109 MW project and the second phase of Formosa 1 at 120 MW – Taiwan will be just 340.5 MW from fulfilling its 2025 goal if all the discussed projects are realised.

However there is the potential for approval of further capacity. Taipei Times also writes that German companies Wpf and Infravest, which developed the 750 MW Yunlin project, have been asked to deliver further documentation ahead of potential approval. Following this, Taiwan Generation's Fuhai project was rejected with reference to repeated delays and a lacking capacity to resolve conflict with local fishermen.

The allocation of the first three GW is expected to be allocated at the end of April. One month later, a 2.5 GW tender will be launched which is expected to be allocated in June.

English Edit: Lena Rutkowski

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