Akihabara News (Tokyo) — By the end of this year, the Taiwan government is expected to award more than 3GW of potential capacity to offshore wind power developers.
Outside of mainland China–which is being developed largely independently from the global market–Taiwan is the most advanced offshore wind market in Asia, with Japan trailing some distance behind.
At present, there are two offshore wind farms in full operation, contributing a total of 237MW of electricity to the island’s grid, which is run by the Taiwan Power Company (Taipower). These are the 128MW Formosa 1 farm completed in 2019 and the 109MW Taipower farm completed at the end of last year.
However, these will soon be supplemented by four major projects which, combined, will contribute an additional 2.5GW of electricity. All of Taiwan’s wind farms lay along its western coastline facing the Taiwan Straits, where most Taiwanese live.
Changhua 1 & 2a: This 900MW offshore wind farm is expected to be completed by the end of this year. It is being developed by Danish multinational power company Orsted.
Formosa 2: This is a 376MW wind farm also set for completion this year. It is being developed by a consortium led by the Japanese firm JERA.
Changfang Xidao: This 589MW project aims to be fully online by the end of next year. It is being developed by Copenhagen Infrastructure Partners.
Yunlin: This 640MW project has consistently run into the most problems. Originally in the hands of a German developer, a broad consortium is financing it, including Japanese firms such as Sojitz Corporation, Chugoku Electric Power Company, Chudenko Corporation, Shikoku Electric Power Company, and JXTG Nippon Oil & Energy.
Aside from the two farms which are operating and the four under construction, there are an additional four farms which have been awarded by the Taiwan government in Round 2 but have not yet moved to the construction phase. These are Northland Power’s 1,044MW Hai Long 2 & 3 farm (in which Mitsui & Co. is an investor); Orsted’s 920MW Changhua 2b & 4 farm, the Copenhagen Infrastructure Partners-led 300MW Zhong Neng farm, and a 300MW Taipower project.
These projects are all expected to be completed between 2024 and 2026.
The first Round 3 awards, as mentioned, are expected to come by the end of this year. The screening process is now underway, including detailed reviews of the environmental impact.
This auction is highly competitive, with dozens of projects jostling for what will likely be six new awards.
Based on the way it is structuring the process, Taiwan’s government wants to diversify its offshore wind farm developers, making sure that no single firm has too big a slice of the pie. New awards are expected to be limited to under 600MW of potential capacity per development zone.
International developers have sometimes complained about Taiwan’s onerous “localization” requirements. The island’s government desires to become the offshore wind industrial hub for all of East Asia–including the Japan and South Korea markets–and thus is requiring the mostly-European firms to transfer much of their technology to Taiwanese companies and to hire locals as suppliers and partners.
On the other hand, the Taiwan market alone will probably be of insufficient scale to allow the Taiwanese offshore wind industry to be truly cost competitive, and the Japanese and South Korean governments are likely to have their own versions of the localization policy.
Experienced hands in the industry have thus been calling for the creation of a regional offshore wind market in East Asia in which each government has certain fields in which they specialize, and not try to replicate the full offshore wind supply chain in every jurisdiction, which would only make all of them more expensive than necessary.
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