The Taiwanese government plans to establish 5.5GW of offshore wind power by 2025, and hopes to preserve the relevant technology in Taiwan while promoting the industry. Thus, it has been gradually elevating the ratio of localization through the offshore wind power selection since 2018, which establishes industry chains of underwater foundation, towers, as well as wind turbine components and parts in Taiwan in the long term.
According to the method stipulated in the selection announcement, wind farm developers must pass the environmental impact assessment; they are then selected and ranked by the Bureau of Energy, where localization ratio, construction capability, and the comprehensiveness in the overall planning will be evaluated by an external committee formed by external committee members selected by the bureau, before finally applying for the electrical license.
Localization for the offshore wind power industry is divided into the lead time, 1st phase, and 2nd phase, where the lead time period between 2021 and 2022 consists of 10 localization items, including wind farm towers, underwater foundation, power facility (transformers, switchboards, switchgears), and shipbuilding. The 1st phase will commence officially in 2023, where 7 new items, including components and parts of wind turbines, submarine communications cable and maritime engineering, installation, and transport ship, will be added to the existing 10 items, combining to 17 items in total. The 2nd phase of localization begins in 2024, where another 10 items, including gearbox, generator, power conversion system, and wind turbine blade, will be added to the existing 17 items.
Operators, including Orsted, WPD, and CIP (Copenhagen Infrastructure Partners), who implement grid construction in 2021, will have to propose industry related implementation solutions to the Industrial Development Bureau on November 15th 2018, and operators who implement grid construction in 2023 and 2024 will have to propose the solutions on November 15th 2019. The Industrial Development Bureau will have 45 days of review time.
The industry related implementation solution proposed by Orsted in 2018 was not approved by the Industrial Development Bureau due to the inability to comply with the localization ratio standard for the underwater foundation and pin piles of offshore wind turbines. The company then proposed an alternative solution, including the establishment of the machine house assembly plant in 2021, the founding of industrial funds worth tens of millions, as well as the counseling of secondary suppliers, and the cultivation on talents for suppliers, which had been approved by the Ministry of Economic Affairs.
Orsted, WPD, and CIP have all been approved for their industry related implementation solutions on December 16th 2018, whereas CIP, CSC, TPC, and Northland Power have also submitted the offshore wind power industry related implementation solutions before November 15th 2019 regarding a total of 5 wind farms.
The Industrial Development Bureau had completed evaluation in the beginning of 2020, where the offshore wind farms of Changfang & Xidao and Zhongneng by CIP and CSC have both passed the localization review. WPD and TPC have not passed the localization review, where both Hailong 2 and TPC 2 will undergo grid construction in 2024, and must fulfill the target of 27 localization items.
Although the wind turbines of Hailong 2 are produced by Siemens Gamesa, the generators, transformers, switchboards, and wind turbine blades are unable to be manufactured in Taiwan, thus the solution was not approved, though will be given a specific improvement period. As for TPC 2, the project is in the midst of the tender process, thus it does not conform to the review specification due to the inability of attaching an official commercial contract. The tender of the TPC 2 project has been unsuccessful for 6 times, and operators are expected to provide information once again after awarding the bid for another attempt. Operators who are unable to submit required information within the given period, and are fined to a certain level, will be denied nonetheless.
The existing offshore wind power policy in Taiwan has attracted numerous offshore wind power manufacturers to station in the country in order to seize the Asia market in advance, and the localization policy has also gradually established an industry chain of wind farm in Taiwan, with the objective of implementing local procurement, production, and talent cultivation. Take Siemens Gamesa as an example; the company has been stationing in Taiwan since 2017, and has announced the other day that it will substantially expand the machine house assembly plant in Taichung and join hands with suppliers on establishing an Asia-Pacific wind power industry cluster, which may see the possibility of the latest 14MW wind turbines of Siemens Gamesa being manufactured in Taiwan, if the industry related implementation solution of Hailong was approved, and that the final investment has been settled with the working partners.
In addition, CIP will also invest alongside CSC on establishing a second machine house assembly plant in Taiwan, though the transportation, cost, and engineering design analysis is still undergoing for the location of the assembly plant that was expected for confirmation by the end of 2019.
Despite the aforementioned elements, there is wiggle room in localization items. Take submarine communications cable for offshore wind power as an example; operators have complained that it is rather difficult to obtain the site and land for the installation of the cable, which resulted in low investment willingness for Taiwanese manufacturers, and thus became the only item that was removed from the list of localization items.
(Cover photo source: shutterstock)