Taiwan expands offshore wind capacity, work underway on latest 900 MW of projects
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.
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.
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.
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).
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