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Taiwan poised to unveil plans for next 5GW offshore wind push

Island's energy officials accelerate schedule amid strong interest from foreign developers

Taiwan is poised to unveil details of a new 5GW round of its offshore wind allocation programme after accelerating its schedule amid strong interest from foreign developers.

Taiwan’s Ministry of Economic Affairs (MOEA) was initially due to release a regulatory draft of the “third-stage” allocation for project development post-2026 by the end of this year, but first brought forward the date to October and then to the end of August, Recharge understands.

The regulation draft could bring clarifications on the upcoming auction, for which the release date and rules are not yet set.

The MOEA has conducted two rounds of public consultations with developers over design of the new auction, an unnamed official told the Taiwanese media, adding that more than 20 companies have expressed interested in getting a cut in the third round allocation including “newcomers to the market from France, Japan, Germany, and the Netherlands”.

However, the industry expects further public consultation after the draft release amid highly divided views among existing and new offshore wind developers, Recharge understands from various industry sources.

Last year Taiwan awarded 3.84GW and 1.66GW of offshore wind capacity to seven developers in two rounds of allocations that were contested by 10GW of projects. That meant 4.5GW left the process empty-handed, including projects initiated by Taiwan Green Power, Asia Cement Corp, China Steel, Swancor and others.

MOEA said recently that the new auction would include all of the unallocated 2018 projects. But “the existing developers of the 4.5GW hope to be prioritised (for success) in the allocation,” local energy law expert and an associate professor at National Tsing Hua University, Mingzhi Gao, told Recharge. That would leave little room for the new projects and a far from ideal scenario for the newcomers, he added.

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Developers also have divergent opinions on key issues including the timing of the allocation and the localisation requirement.

Earlier this year MOEA was considering a gradual build-out that allocates 1GW annually. That plan appears to face pushback from the manufacturers, who prefer a one-off auction of the entire 5GW for its boost to the value chain’s investment confidence.

Localisation is another critical issue up for debate. In the two previous auctions, MOEA’s Industrial Development Bureau set annually-increasing requirements for the projects’ local content, depending on their grid-connection dates.

The localisation requirement is likely to be even higher for the third-stage projects, officials of MOEA previously told Recharge.

But international developers have already expressed concerns over the existing localisation set-up and some are calling on MOEA to rethink the rules for the third allocation.

In April, Orsted’s proposal struggled to pass the ministry’s review due to the lack of local manufacturing capacity for subsea structures. The Danish group in the end won support from the ministry only by offering to pursue an “alternative plan”, including setting up an industry development fund and a promise of higher local contents in its future projects.

Four developers including Copenhagen Industrial Partners (CIP), China Steel, Taipower and Northland Power Inc (NPI) face a similar challenge, as they finalise the localisation plans for their projects set to come online between 2023-2025.

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