To support Taiwan's ambitious energy transition goals, Copenhagen Infrastructure Partners (CIP) is calling for increased government and financial sector support to complete power purchase agreements for its Fengmiao offshore wind farm. Marina Hsu, Managing Director of CIP Taiwan, recently highlighted the project's progress and challenges in securing corporate power purchase agreements (CPPAs) for the remaining half of the 500MW wind farm.
The Fengmiao project, part of Taiwan's Round 3.1 offshore wind development, has already secured CPPAs for half of its capacity. Hsu emphasized that the project is on track for grid connection in 2027, but stressed the importance of finalizing agreements for the remaining capacity to enable project financing.
"We've already finalized power purchase agreements for half of its capacity," Hsu stated. "The price is higher than the feed-in tariffs for Round 2 projects, which is reasonable given the increased costs. However, it's still below NT$6 per kWh. These agreements span three different industries, including the semiconductor supply chain, non-state-owned enterprises, and hard-to-abate sectors."
Hsu urged the government to expedite the matching process between buyers and sellers of green electricity. She also urged local banks, both private and state-owned, to support the financing of these projects, arguing that Taiwan-made electricity should be financed by Taiwanese banks.
Echoing this sentiment, Century Iron & Steel (CIS) emphasized the need for government support in addressing the challenges faced by developers, particularly regarding electricity pricing and the establishment of a comprehensive power purchase platform.
In recent developments, the Danish developer has signed agreements with CSBC-DEME Wind Engineering (CDWE) and CIS, valued at over NT$12 billion, for the Fengmiao project.
These contracts cover crucial aspects of the project, including the supply, transportation, and installation of subsea foundations. CIS has been tasked with providing the pin-pile and jacket foundations, while CDWE will handle the transportation and installation of these massive structures.
The project has faced challenges due to rising costs and complex development conditions. Joris Hol, CEO of the Fengmiao phase, noted that the foundations for the wind farm will weigh over 2,700 tons each, nearly twice the size of previous projects.
Wen-Lon Cheng, Chairman of CSBC, highlighted the maturation of Taiwan's offshore wind capabilities, with the Green Jade vessel now operational as the most capable installation vessel in East Asia. "As opportunities arise, we're poised to take Taiwan's marine engineering expertise global," he said.
The agreements underscore CIP's commitment to collaborating with local Taiwanese companies, aligning with the government's policy requirement of a 60% local to 40% international supply ratio. Additionally, CIP has partnered with South Korea's SK Oceanplant for additional foundation supply, further diversifying its international partnerships.
As Taiwan aims to accelerate its energy transition and meet growing demand for green electricity, the success of projects like Fengmiao will be crucial. Hsu concluded by stressing the importance of collaboration between investors, banks, power purchasers, and the government to ensure the success of Taiwan's offshore wind sector and broader energy transition goals.
