CIP power deal beacon of hope for Taiwan’s struggling offshore wind sector
Other projects have been left stranded as strict local content requirements sent power prices spiralling and offtakers looking elsewhere
Taiwan’s offshore wind sector received a much-needed boost as Copenhagen Infrastructure Partners (CIP) signed an offtake deal for a 500MW project at a time when spiralling power prices on the island have left other projects stranded.
CIP, through one of its infrastructure funds, announced today that its Fengmiao I project has signed a Corporate Power Purchase Agreement (CPPA) with Sino American Silicon Products Inc and its renewables subsidiary.
Fengmiao I represents a “significant milestone” in the industry's shift from selling electricity to Taipower – Taiwan’s state-owned utility – to a business model based on direct sales of electricity to corporations, said CIP on LinkedIn.
Strict local content requirements in Taiwan and an underdeveloped supply chain have raised sector costs to among the highest in the world, with developers saying they need some TWD6/kWh – equivalent to $190/MWh – to progress projects.
Few customers are willing to pay such high prices.
Taiwan this month decided to drop its local content requirements under pressure from industry players and the EU, which had lodged a complaint with the World Trade Organization over the issue that officials said it will now discontinue.
It is so far the lone wind farm to progress in the island's multiphase Round 3 seeking to add 15GW. The first phase awarded 2.35GW of capacity to developers including CIP, a joint venture of Corio and TotalEnergies and Skyborn, among others.
Taiwan is the Asia-Pacific's offshore wind leader outside China with some 5GW of capacity either in operation or late-stage development and another 5GW awarded so far in Round 3, which aims to spur 15GW of new projects.
(Copyright)