Global pacesetter Orsted emerged as the big winner in Taiwan’s first offshore wind auction, winning 920MW in a competitive process that awarded 1.66GW and followed May’s allocation by the country of an initial 3.84GW.
Orsted said its winning price across the two projects in the Changhua region was TWD2,548/MWh, equivalent to about €72.3/MWh ($84.30).
The other winner was Canada’s Northland Power, which secured 744MW for its Hai Long 2 & 3 projects, according to a statement by Taiwan’s energy ministry. The average for the two Northland projects was TWD2,373, with Hai Long 2 coming in cheapest at TWD2,245.
The average price of all four projects is TWD2,455/MWh, equivalent to about $81/MWh, significantly below expectations and about half the feed-in-tariff rate that applied this year.
The first allocation round in May was awarded on the basis of FITs, but the latest round was auction driven and attracted 12 participants.
The Orsted projects – which subject to environmental permits will be built by 2025 – add to the 900MW it secured in the May allocation, bringing its total pipeline off the Asian island nation to 1.82GW – all in Changhua.
Orsted wind power CEO Martin Neubert said: “Following a highly competitive auction process, we’re very pleased with adding further value-creating capacity in Changhua.”
“Today’s results are promising for Taiwan’s transition to renewable energy. The outcome of the auction proves once again that when governments commit to ambitious buildout targets and create stable, transparent and good framework conditions, the offshore wind industry will deliver.”
The Danish group said the second award will allow it to make maximum use of transmission assets off Changhua and serve the projects from a common hub.
Orsted will now seek permitting for the projects and seek to finalise a PPA with local power group Taipower.
The second batch of projects will enter construction from 2023, subject to a final investment decision.
They would join the Danish group’s first 900MW of capacity which is due to be finished by 2021.
Northland is developing Hai Long 2&3 with local partner Yushan Energy, which holds a 40% stake.
Northland had already been allocated 300MW under the earlier FIT-based allocation process. The projects are also due for grid-connection by 2025.
The Canadian group’s CEO John Brace said: “This additional capacity will enhance our ability to generate efficiencies in the delivery of world class offshore wind projects that will build up the local supply chain, supporting the achievement of Taiwan’s ambitious green energy targets from multiple aspects.”
Taiwan has rapidly emerged as the next big offshore wind hotspot thanks to the government’s enthusiastic backing for development, with foreign developers and OEMs queuing up to take part in the two rounds.
Note: Update corrects earlier inaccurate average power price for four projects