Ørsted, the leading offshore wind-power developer, reported that it will make final decision on its offshore wind power project in Taiwan, following settlement of the 2019 wholesale rate at NT$5.516 kWH, 7% higher than original proposal of NT$5.1, plus resumption of the tiered rate scale.
The Danish company will review its original decision to suspend its investment project in Taiwan, made in the wake of publication of the draft rate scheme for 2019, which not only slashed the wholesale rate by 12.5% than the 2018 level but also substituted a fixed rate for the tiered rate scale.
As part of the effort to raise the share of renewable energy to 20% of total power supply by 2025, the Ministry of Economic Affairs has planned to install 5.5 GW offshore wind power capacity by the year, encouraging foreign developers to invest in Taiwan's wind fields.
Some players are still unsatisfied with the finalized 2019 rate, saying it can enable developer to break even at best, given the heavy costs for developing local supply chain and technology transfer.
Critics, though, believe that it is too high, which will raise local people's power bills significantly and dampen investment willingness, noting that auction wholesale rate for offshore wind power in Europe had dropped to US$50 MWh in 2018, compared with US$150 in 2015. Ben Backwell, chief executive of the Global Wind Energy Council (GWED), points out that it's improper to compare rate in emerging markets with that in mature markets, such as Europe.
Insiders note that decision by Ørsted will affect the many other existing and prospective investors, which are now adopting a wait-and-see attitude.
In a previous interview, Henrik Poulsen, chief executive of Ørsted, reported that the board of directors will make a financial decision on the Taiwan project in Q2.
Should the company decide to exit Taiwan, it may switch its effort to Japan, as it already signed a memorandum of cooperation for development of offshore wind power with Tokyo Electric Power on Jan. 18.
(Collaborative media: TechNews, first photo courtesy of Pixabay)