Orsted May Cut Orders Due to Cracks in Underwater Foundation; MOEA: Issues Being Resolved and Will Not Impact the Localization Policy

published: 2020-10-07 18:30 | editor: | category: News

The underwater foundation that offshore wind farm developer Orsted had purchased from Singda Marine Structure, a subsidiary of CSC, has been exposed with defects and engineering postponement in the finished product, which has allegedly prompted Orsted to shift to overseas procurement that may create impact to the localization policy. Tseng Wen-sheng, Deputy Minister of the MOEA, has responded accordingly on October 6th that such incident will not influence the localization policy, and the defects will be gradually resolved. Singda Marine Structure also commented that the company is currently discussing closely with Orsted regarding the quantity and schedule of the manufacturing.

As pointed out by the coverage of domestic media, the transition pieces for the 56 units of wind turbines, commissioned to Singda Marine Structure by Orsted that were manufactured by CSC and welded by CSBC, had been exposed to cracks subsequent to the completion of finished products in April, which resulted in a 9-month postponement in the engineering process, and it is rumored that Orsted is about to cut the order for the establishment of 40-45 units wind turbines, then turn to South Korea for procurement.

Tseng Wen-sheng had commented on the particular issue at the press conference of circular economy today that the MOEA has implemented the review on localization according to the existing stipulated standards, and that the defects and bottlenecks encountered in the quality of the production process and welding are regarded as issues of commercial performance, for which the technical issues are required to be improved and transcended. Tseng also emphasized that CSC is a renowned state-owned enterprise that prioritizes on quality, and he believes that the company will resolve these issues one by one.

Tseng Wen-sheng also pointed out that the MOEA will provide assistance for any difficulties encountered during the process of contract implementation, as well as execute the review standards of localization.

Singda Marine Structure is currently discussing intensively with Orsted and technical consultants, and had proposed 3 specific points yesterday. In the face of design changes, pandemic-induced impact, as well as insufficient high-end welders and technical difficulties for the existing manufacturing progress of the underwater foundation, Singda Marine Structure is adhering to a pragmatic attitude in problem solving, where the company not only maintains a close contact with the proprietor Orsted regarding the quantity and schedule of the manufacturing, but also constantly reinforces and elevates the manufacturing standard of domestic components and parts.

Singda Marine Structure pointed out that Orsted has to fulfill its promise of localization and will not cut orders easily, and the former is unable to reveal too much information regarding the quantity of manufacturing due to the non-disclosure agreement, though the former has clarified that all energy is focused on the negotiation of the relevant issues now, and the 22 manufacturers in the supply chain are also exerting full strength in completing the engineering section. In terms of the arduous transition pieces, third manufacturer CTCI will also join in for support apart from CSBC and CSMC.

The localization of offshore wind energy in Taiwan is implemented in three phases, where 10 localization items including tower installations, underwater foundation, power facilities (transformer, switchboard, switchgear), and ship manufacturing must be achieved during the lead time of 2021-2022, and items including the components and parts of wind turbines, construction and supervision of the underwater foundation, as well as the construction and supervision of maritime engineering must be accomplished by 2023 and 2024.

Singda Marine Structure, invested and founded by CSC in 2018, has established a production line of underwater foundation at Xingda Harbor, and concatenated 20 manufacturers from the domestic supply chain, with factory completion at the end of 2019, which is able to produce roughly 50 units of jacket foundation per year in estimation.

 (Cover photo source: Orsted)

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