wpd to scrap offshore wind project if Taiwan cuts tariffs – exclusive

The Taiwanese government is expected to announce a final decision on 2019 FiT by the end of next week.

German offshore wind developer wpd said it will scrap its 350MW Guanyin project in Taiwan if the government doesn’t modify its proposed offshore wind feed-in-tariffs for 2019.

“The project is at risk with that tariff, and if there is no change [in regulation], we can’t build it,” Achim Berge Olsen, member of wpd’s management board, told Infrastructure Investor.

The German firm, which is developing two projects with a combined capacity of 1GW in Taiwan, is the latest industry participant to warn the government against its prospective FiT scheme, which at 5,1060 new Taiwan dollars ($165.14; €145.55) per MWh for PPAs signed in 2019, would represent a 12.7 percent reduction compared to last year.

Last November, Danish offshore wind developer Ørsted, which is currently developing 1GW of offshore wind capacity in Taiwan, warned the government that it will “suspend and re-evaluate all activities” in the region. On Monday, local media reported that Ørsted has asked its local partners to halt execution of contracts.

The firm did not reply to requests for comment.

Similarly, the Global Wind Energy Council, an international association for the wind power industry, released last week an official statement urging the Taiwanese government to rethink the changes.

“Taiwan must stick to its plans and allow the industry to establish itself, or there is real risk of developers and investors exiting the market,” Ben Backwell, chief executive of GWEC, said in a statement.

Taipei is expected to announce this year’s official FiT at the end of next week.

Taiwan’s Bureau of Energy did not reply to requests for further comment.

wpd has confirmed that the government is currently in talks with different stakeholders to discuss a final FiT regime for this year. “Our confidence in the government is very high and we expect that they will come up with another proposal,” Olsen said.

“Anything else would be a big surprise and disappointment,” he added.

wpd’s second project on the island, the 650MW Yunlin wind farm, has already signed a PPA under the 2018 FiT regime, and “is safe,” according to Olsen.

He also argued that the government’s plan to include a cap on the number of full load hours that fall under the PPAs will damage its efforts to localise the supply chain for the industry on the island.

According to Olsen, local producers will be disincentivised to create the most efficient turbine models for Taiwanese projects, because they would not benefit from the tariff arrangement.

“It’s like asking BMW to produce a 2001 model in a newly-built factory,” Olsen said.

Taiwan allocated 5.5GW of capacity to offshore wind projects in 2018, in order to increase the share of renewable power in its energy mix to 20 percent by 2025.

The projects have attracted investment from international developers and investors including Macquarie, wpd, CIP, Germany’s EnBw and Japan’s Mitsui.

According to data from the Global Wind Energy Council, Taiwan’s offshore wind industry might bring NT$880 billion ($25.8 billion; €22.7 billion) of investment and create around 20,000 jobs by 2025.