China Steel Corp (CSC, 中鋼) yesterday said its board had approved a plan to set up a wind power development committee as part of the company’s strategy to diversify its business portfolio into other sectors while coping with the government’s promotion of green energy policies.
Like other steel mills in the world, the Greater Kaohsiung-based company is seeking other revenue sources as its core business is facing challenges such as a global overcapacity in crude steel and softening demand from downstream customers.
The nation’s only integrated steel producer said in an e-mailed statement that the new committee, which is to report directly to CSC president Andrew Sung (宋志育), would assume the responsibility of planning and executing the wind power business, and engineering and technology projects initiated by the company and its subsidiaries.
“We hope the move can help develop wind turbine manufacturing, marine construction for offshore wind turbines, and the related operation and maintenance industries in Taiwan,” China Steel said in the statement.
Analysts say wind power is becoming a competitive source of electricity thanks to technological improvements and the development of larger turbines. In comparison, solar power has suffered from lower efficiency due to the uncertainty of the climate, including the total days of sufficient sunlight, they say.
The nation currently has onshore wind installations with a capacity of about 600 megawatts from about 300 wind turbines. The Ministry of Economic Affairs aims to increase the wind power capacity to 4,200 megawatts by 2030, or accounting for 33 percent of total renewable energy installations, according to Yuanta Securities Group (元大證券) analyst Yeh Chia-wen (葉嘉雯).
The figure includes an onshore installed capacity of 1,200 megawatts of electricity generated by 150 wind turbines in 2020 and an offshore capacity of 3,000 megawatts with 600 wind turbines installed in 2030.
“The ministry’s project intends to support Taiwan’s wind turbine component suppliers to localize wind turbine production,” Yeh said in a report on Nov. 13.
State-run Taiwan Power Co (Taipower, 台電) and two private companies, Taiwan Generations Corp (永傳能源) and Swancor Industry Co (上緯), are the major wind farm developers in Taiwan.
Under the ministry’s project, these developers are expected to collaborate with domestic wind turbine system and component suppliers such as China Steel, Teco Electric & Machinery Co (東元電機) and Yeong Guan Energy Technology Group Co (永冠能源); marine engineering contractors like CSBC Corp, Taiwan (台船) and China Steel Express Corp (中鋼運通); and peripheral equipment manufacturers including Chung-Hsin Electric and Machinery Manufacturing Corp (中興電工) and Allis Electric Co (亞力電機) to further accelerate the development of wind power in this country, according to Yuanta’s report.
While China Steel said it expects the move to enhance synergy benefits, it stopped short of saying whether it plans to establish a joint venture with strategic partners to tap into the new business or if it is seeking cooperation opportunities with wind turbine producers and supply chain producers in the preliminary stages. The company also did not offer a time frame for the new business.
SinoPac Securities Investment Service (永豐投顧) said wind power is a key part of Taiwan’s long-term renewable energy development, but the government should act more aggressively to promote the industry.