Ørsted and Northland Power win Taiwan’s 1.66GW offshore wind auction

The average bid prices for the projects to be built by 2025 are less than half this year’s feed-in tariff for offshore wind projects.

Taiwan’s Ministry of Economic Affairs announced the results of the island’s first offshore wind auction last Friday, awarding a combined 1,664MW of allocation to four projects developed by two bidders – Denmark’s Ørsted and Canada’s Northland Power.

The auction follows the 3.8GW allocation of grid connection capacity announced in April, as Taiwan looks to develop 5.5GW of offshore wind projects by 2025.

Ørsted was awarded 920MW for two offshore wind sites in the Changhua region – the 337.1MW Greater Changhua Southwest project and 582.9MW in the Northwest – with its winning bid price at 2,548 New Taiwan Dollars ($83.8; €72) per MWh, according to the company’s statement. Including the additional projects, the Danish developer now has a total offshore wind pipeline of 1,820MW in Taiwan.

Northland Power was also awarded 232MW to its Hai Long 2 project and 512MW to Hai Long 3 in this auction, with bid prices at 2,224 New Taiwan Dollars and 2,502 New Taiwan Dollars per MWh, respectively.

“These awards are separate from and in addition to the 300MW in 2024 that Hai Long 2 was allocated by the ministry on April 30 under Taiwan’s Feed-in Tariff programme,” said the Canadian developer in a statement, adding that its local partner Yushan Energy owns 40 percent of Hai Long 2 and Hai Long 3. Japanese trading house Mitsui & Co bought a 50 percent stake in Yushan from Singaporean firm Enterprize Energy last month. In total, the consortium owns about 1,044MW of offshore wind capacity under development in Taiwan.

The new projects’ bid prices, which will be effective when the projects become operational by 2025, are significantly lower than the feed-in tariff for projects which were previously selected based on technical and financial aspects in April. This year’s feed-in tariff price stands at 5,850 New Taiwan Dollars per MWh for offshore wind projects, according to the ministry.

Ørsted said its bid was based on several drivers. For example, costs are expected to decline, given that previous projects will facilitate development of local supply chain and technology advances. Also, in addition to operating all its projects from the same hub, the developer can fully utilise the transmission asset it will be building for its early regional projects and more efficient EPC process being developed in the next six years.

The Taiwanese government said there were seven bidders submitting bids for 12 offshore wind farms in the June auction process, while a total of 20 projects were examined during the April selection process.

Taiwan has now allocated 5.5GW of offshore wind target capacity to respective projects and has confirmed the development scheme and sites, the ministry said, adding that building 5.5GW of offshore wind projects is expected to result in total investments of 962.5 billion New Taiwan Dollars and the creation of 20,000 jobs.

Ørsted, Northland Power and the Ministry of Economic Affairs had not responded to queries seeking further comment at the time of publication.