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Taiwan expands offshore wind capacity, work underway on latest 900 MW of projects
24 March 2021Bernadette Lee
Offshore work began recently on the latest expansion of
Taiwanese wind generation capacity, the Greater Changhua 1 and 2A
projects, which have a combined capacity of 900 MW, according to
the facilities' backers, with construction slated to be finished in
2022.
Located 35-60 km off the coast of Changhua County, the wind
farms will provide clean energy to 1 million households in
Taiwan.
Work has begun with preparations for laying cable and scouring
protection to make the seabed ready for foundational installation,
Ørsted, one of the developers, said in a statement 19 March.
"Ørsted is progressing well with onshore construction, including
completing the civil works of the two onshore substation main
buildings and the upgrade work of the hinterland at wharfs 36 and
37 at the Port of Taichung for storing key components for offshore
installation," the company said.
Ørsted wants to help Taiwan build world-class offshore wind
farms to provide clean energy and contribute to its energy
transition goal, said Matthias Bausenwein, president of Ørsted
Asia-Pacific.
"The commencement of offshore installation of the Greater
Changhua 1 & 2A offshore wind farms signify a landmark step
towards achieving that goal of making Taiwan greener," he
added.
Greater Changhua facilities
The Greater Changhua facilities at four sites in waters off
Changhua County will have a combined capacity of 2.4 GW when
finished. In addition to Greater Changhua 1 and 2A, the Greater
Changhua 2B and 4 wind farms have a combined capacity of 920 MW
while Greater Changhua 3 will be 600 MW.
Upon completion, the cluster will be able to provide clean
energy to approximately 2.8 million Taiwanese households.
In December 2020, Ørsted, the developer and owner of the Greater
Changhua 1 project, brought in a consortium of investors comprising
Canadian institutional investor Caisse de dépôt et placement du
Québec (CDPQ), and Taiwanese private equity fund Cathay PE. Both
investors acquired a 50% share in Greater Changhua 1, with CDPQ as
the majority owner.
Upcoming projects
The Greater Changhua facilities are the latest projects on the
offshore wind runway for Taiwan.
The Formosa 2 offshore wind power project, located approximately
4 to 10 km off the northwestern coast of Taiwan, is slated to begin
operations by the end of 2021. It has a generation capacity of 376
MW and consists of 47 fixed-bottom turbines. It is supported by an
offtake agreement with Taiwan Power Company involving a 20-year
power purchase agreement (PPA). Its investors included Japanese
power producer JERA, Macquarie, and Swancor Renewable Energy.
The Greater Changhua 2B and 4 offshore wind farms mentioned
previously are scheduled to begin construction in 2025 and be fully
commissioned in 2026, subject to grid availability. Ørsted was
awarded the rights to the projects in June 2018.
A PPA for the Greater Changhua 2B and 4 offshore wind farms was
signed on 8 July 2020 between Ørsted and Taiwan Semiconductor
Manufacturing Company (TSMC) under which TSMC will receive the
entire output of the facilities for 20 years.
Under the PPA, the developers of Greater Changhua 2B and 4 will
receive a price for power that includes Taiwan renewable energy
certificates (T-REC) during the 20-year contract period. The price
will be higher than the Feed-in-Tariff (FIT) originally secured via
the outcome of Taiwan's first offshore wind auction in June
2018.
T-REC system
The T-REC system is a certification process established in May
2017 and administered by the Ministry of Economic Affairs that
allows companies to prove that they are using renewable energy. The
certification process involves verifying the equipment they use for
generating renewable energy and the electricity generated. Each
certificate represents 1,000 kWh of electricity from renewable
sources.
The T-REC system replaced the FIT policy, which basically
offered inducements to private-sector companies in the form of
higher subsidies in order to encourage investment in renewable
generation. While the subsidy system is considered a necessity for
the development of a renewable energy market, a competitive
mechanism in the form of certification is considered a more viable
long-term policy, according to Taiwan's National Renewable Energy
Certification Center.
Other new wind farm projects in Taiwan include Xu Feng 1, 2, and
3 projects with a total potential capacity of 2 GW, which will be
located 37-62 kilometers off the coast of Changhua County.
Taiwan's first
Formosa 1, a 128-MW project located 2-6 kilometers off the coast
of Miaoli County in northwestern Taiwan, was Taiwan's first ever
offshore wind farm and began commercial operations on 27 December
2019. It was also the first commercial-scale offshore wind farm in
the Asia Pacific region, according to Swancor Renewable Energy, one
of the developers of the project (along with JERA, Macquarie's
Green Investment Group, and Ørsted).