This is what's been going on in the Taiwan market 

FID for Ørsted Greater Changhua 2b +4 offshore wind farm

Here comes some good news at last for the Taiwanese market! Ørsted just held a last-minute presser to a bounce it has taken the Final Investment Decision on its 920MW Greater Changhua 2b +4 offshore wind farm!

While this was always the most likely conclusion, we all know costs have skyrocketed in this industry since Ørsted signed the 20-yr CPPA with TSMC in 2020. This, together with the decision on Ørsted's part not to participate in Round 3.1 (for construction 2026/27), led some to worry. But now that Ørsted came through with the commitment the question is flipped: will they now come back to bid in Round 3.2 (for construction 2028/29).

The answer, as helpfully outlined by Per Mejnert Kristensen below, is that they very much WANT to, but they need the project sizes to be bigger, local content requirements to be more flexible. I think they are being listened to and there will certainly be an adjustment in project size at least. Would that be enough? Time will tell.

A bit more info on 2b + 4...it will use 66 x 14MW SGRE turbines and is slated to be complete by the end of 2025. Ørsted will self-finance with some support from local banks.

Everything. In Taiwan. All at once!

That was my impression when I hosted a panel at the German Offshore-Wind Initiative GOI initiative summit including Deputy DG of the BoE Lee Chun-li, Gero Tschierschke of SGRE, Hsiang-Sheng (Sean) Huang of RWE, Jannis Blaesild of Heliservice, Markus Schüller of Fichtner, Claus Bardenhagen of Rhenus.

Installation is happening. Admin contracts from Round 3.1 need to be signed (or not). Round 3.2 auctions need to take place. Floating demos are taking off. All this is happening while Taiwan is trying to encourage the formation of an internationally-competitive indigenous supply chain while balancing a burning need to provide Renewable Energy to the Taiwanese grid!

The root cause of higher cost in Taiwan must be analysed and mitigated. We cannot keep building the most expensive offshore wind farms in the world! Claus told an instructive story about how they had to charter a vessel for a quarter of a million Euros to install two LIDAR buoys. Equivalent costs in Europe would be 50K. Obviously not acceptable, but can you blame just localization? There was a capable (in Claus' estimation) and localization-ok vessel available for charter for $60,000. It was the developers that refused that vessel for not meeting their internal standards.

Special thanks to DDG Lee for engaging with and listening to the industry. While making clear that specific decisions on localization fall under the purview of the IDB, not BOE, DDG Lee assured us that the feasibility of localized components is scrutinized on a rolling basis. The burden should lift progressively if truly no viable Taiwanese suppliers shape up.

Taichung port update 

Another great news from Taiwan regarding the start of work on Quayside 37 and 38 in Taichung harbor. The NTD$3.5 billion project will provide much-needed space for T&I for Phase 3 projects after 2026.

We know space is tight in Taichung harbor, a potential bottleneck for construction (to be added to other potential bottlenecks like vessel availability and delivery of MIT components and grid connection capacity). For now, there are 6 quaysides available for offshore wind construction: 2, 5A, 5B, 36, 106, 107. Space can get very tight! After 2026, if all goes well, Taiwan will be building 1.5GW a year annually through 2035!

According to the report from UDN quayside 37 and 38 are going to be heavy-bearing quaysides capable of bearing 40 tonnes per square meter so that they can function as pre-assembly sites. There will be some harbor in-filling to make sure each quayside has more than hectares of hinterland for storing wind turbine components, and to fulfil industry request for at least 40 meter quayside + 30 ha. hinterland per project.

I think this is why, despite all its complications, the Taiwanese market still leads non-China Asia. The government backs the development of this industry all the way, and while there is disagreement on how we want it done, they listen to the industry and the commitment to this technology is never in doubt. 💪

Finally after a long wait...Skyborn is rising from the fire like a phoenix

Skyborn's troubled 640MW Yunlin Offshore Wind Farm got $$$ to keep the show going, according to the Ministry of Economic Affair's Investment Commission, which approves major inbound and outbound investments in Taiwan. A screenshot of their 3/27 release is below:

An investment of NT$29.22 billion into Yunneng Wind Power Co. the special project vehicle of Yunlin, was recently approved. It looks like after the high-profile attempt to haggle with the banks a few months ago went nowhere, the owners are choosing to pony up.

It can seem grim that the project -- which has suffered multiple pile runs and is only about a quarter done -- requires this kind of bailout. But I've heard that the technical talent Skyborn has put in place since it was acquired (recall it used to be the offshore division of wpd) is first class. With fresh money and talent we have the best-possible chance for a project that has been a blot on Taiwan's offshore wind development to finish with integrity.

edit: I previously described this investment as a "cash injection" which is apparently incorrect. it is a 貨幣債權 which google translates as "currency bond" and I am super confused?

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