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A group of Taiwanese clean energy companies plan to develop
"mega-scale" offshore wind projects, banding together to form
"Taiwan Team."
The ambitions of the joint venture (JV) led by Swancor Renewable
Energy extend beyond the horizons of its native land too, with
plans to win business elsewhere in Asia, which is now and is
expected to remain the top region for global wind sector growth in
the coming decade.
The unveiling of the potential homegrown champion 5 July comes
ahead of a ramping up of local procurement requirements in the
third phase of Taiwan's offshore wind development program, said
Shan Xue, IHS Markit principal research analyst.
Taiwan's plans for offshore wind development involve a
three-stage strategy. It is targeting 5.7 GW of installed capacity
by 2025 during the first two stages. In May, Taiwan raised the bar for the third
stage, or "Phase III" of development, by 5 GW to 15 GW. It aims to
build 1.5 GW of resources per year between 2026 and 2035.
The country plans to start auctioning off 3 GW for 2026-27 in
2022, and then a further 3 GW each in 2023 and 2024, for 2028-29
and 2030-31, respectively.
Until now, the offshore wind sector in Taiwan has been dominated
by overseas players such as Denmark's Ørsted and Copenhagen
Infrastructure Partners, Germany's wpd and EnBW, Japanese utility
JERA, and various affiliates of Australian financial services group
Macquarie.
But Swancor, which has had success previously in combination
with overseas partners in the waters off Changhua County, now plans
to work with domestic partners in blocks up the coast off Miaoli
County in northwestern Taiwan, it said.
Swancor teamed up with offshore wind turbine supplier Tien Li
Offshore Wind Technology, turbine casing specialist Yeong Guan
Energy, and J&V Energy Technology in the JV.
The latest draft of the Phase III Offshore
Wind Energy Zonal Developer Selection Mechanism was released in
May. In that draft, 60% local procurement is mandated, IHS Markit's
Xue told Net-Zero Business Daily. If not, the developer won't be
eligible to take part in auctions, she added. Although the local
procurement level was trimmed compared with the previous draft,
companies are still obliged to comply with the requirement, which
is higher than in the first two stages of the country's plans.
That's where Taiwan Team has an edge.
Taiwan Team will initially focus on the development of Formosa
4, a fixed-bottom project, before moving on to Formosa 5, which
will be a floating wind project, the companies said (see map).
Source: Taiwan Team
The nearby Formosa 1 facility, a 128-MW project located 2-6
kilometers off the coast of Miaoli County, was Taiwan's first
offshore wind farm and began commercial operations on 27 December
2019. Swancor teamed up with international partners for the
project. It is Taiwan's only offshore wind farm currently operating
commercially.
The company is also involved in the construction of the 376-MW
Formosa 2 facility, Taiwan's second offshore wind farm. Work on the
project is scheduled to be completed by the end of 2021, according
to Swancor.
To the south, offshore work began on the Greater Changhua 1 and
2A projects, which have a combined capacity of 900 MW, in the first
quarter of 2021, according to the facilities' backers, including
Ørsted, with construction slated to be finished in 2022.
The Greater Changhua facilities at four sites in waters off
Changhua County will have a combined capacity of 2.4 GW. The
Greater Changhua 2B and 4 wind farms have a combined capacity of
920 MW while Greater Changhua 3 is set to have a capacity of 600
MW.
Construction of Greater Changhua 2B and 4 is scheduled to begin
in 2025, and they will be fully commissioned in 2026, said Ørsted.
A power purchase agreement for Greater Changhua 2B and 4 was signed
in July 2020 for Taiwan Semiconductor Manufacturing Company to
receive the entire output of the facilities for 20 years, the first
deal in Taiwan for the entire output of an offshore wind
project.
Taiwan's plans for offshore wind and developers interest are
based on favorable meteorological conditions. Winds off the
Taiwanese coast offer an average speed of greater than 10-12
meters/second, ranking them in the top 10 worldwide, according to
law firm Clyde & Co.
Strong winds, especially in a region prone to visits from
typhoons, demand a lot of equipment. Asian markets were at the
front of Siemens Gamesa executives' mind earlier this week when the
turbine manufacturer announced its 11-MW SG 11.0-200
DD model had joined its SG 8.0-167 DD model in being certified
typhoon-proof.
In the announcement, the company said more than 1,200 turbines
using its offshore direct drive platform are operating across the
globe, including at Formosa 1. It is also the turbine supplier for
the Formosa II and Greater Changhua 1 and 2A projects.
On the horizon?
Taiwan Team hopes the JV's initial foray in the offshore wind
sector at home will lay the groundwork for success elsewhere in
Asia. The JV partners said they believe the expertise and
experience they develop in Taiwan can give them a foothold in
offshore wind's fastest-growing markets.
"As the Taiwan government strives to make Taiwan a global leader
in renewable energy, it is our responsibility to unite as the
Taiwan Team to be stronger together instead of individual companies
on their own," said Swancor CEO Lucas Lin.
Taiwan is seeking help from offshore wind frontrunner the UK to
build its base in the sector. On 7 July, the UK's Offshore
Renewable Energy (ORE) Catapult teamed up with Taiwan's
Industrial Technology Research Institute (IRTI) to support the
growth of the offshore wind industry in Taiwan. ORE also hopes to
create export opportunities for UK businesses, it said.
ITRI is a non-profit R&D organization founded in 1973 to
boost the domestic high-tech economy. ORE said the two
organizations will collaborate on large-scale offshore wind
research and innovation projects in the Taiwanese offshore wind
market.
The UK is currently top of the global offshore wind capacity
table at more than 10 GW, according trade association RenewableUK.
The UK had a total pipeline of 41.3 GW in late 2020, the data
show.
European companies were responsible for almost £1.7 billion
($2.35 billion) of investment in the Taiwanese offshore wind market
in 2020 alone, according to ORE.
