[TOKYO] Taiwan’s offshore wind drama looks set to come to a breezy end next week.
Officials from the government and companies developing wind power projects are signalling that the island will likely amend a policy proposal made last year that threatened to slash revenues and sour investor interest.
Information collected during a public consultation process bolsters the case for raising the proposed feed-in tariffs for this year, Chen Chung-hsien, director at the energy technology division of the Bureau of Energy, said in a phone interview Friday. His comments came a day after officials from several developers said they foresee the government amending the plan.
“We expect the government will improve the conditions because all developers say the changes are unacceptable,” Jesper Krarup Holst, chief executive officer of Copenhagen Infrastructure Partners K/S’s (CIP) project office in Taiwan, said in an interview Thursday on the sidelines of a conference in Tokyo.
The government will still accept public comments until 5pm on Jan 29, Mr Chen said. A review panel will meet the following day to make a final decision on the tariff, he said.
The island is attempting to create the first Asian offshore wind market, while maintaining cheap and reliable electricity to underpin the global competitiveness of its manufacturing industry. But the dispute over the policy changes has tarnished Taiwan’s budding reputation as the darling of the industry. Taiwan wants 6.7 gigawatts of offshore wind electricity, along with massive increases in solar and natural gas, to help it move away from nuclear and coal.
In April, the country agreed to give space in its electrical grid for about 3.8 gigawatts of offshore wind, divided among projects led by seven companies. It offered to pay NT$5.8498 (S$0.26) per kilowatt hour. But there was a catch: developers had to sign power purchase agreements with grid operator Taiwan Power Co by the end of 2018 in order to guarantee those rates.
In November, Taiwan’s Ministry of Economic Affairs surprised the industry when it proposed that purchase agreements signed this year would get NT$5.106 (S$0.22) per kilowatt hour, a reduction of 12.7 per cent. In addition, Taiwan proposed limiting payments to wind farms for only the first 3,600 hours operations per year, and to end a fee structure that pays higher tariffs early in the project’s life to help service financing debt.
Combined, the proposal would reduce project revenues by 20 per cent to 25 per cent, CIP’s Mr Holst said. Only WPD Offshore GmbH, which had signed deals for two of its three projects, and Swancor Holding Co, have power purchase agreements at the 2018 rates.
“We have the confidence in the Taiwanese government to take the right decisions and come up with an updated proposal for the tariff,” Eike Schimanski, Taiwan-based project manager for WPD, said at the conference.