The Ministry of Economic Affairs yesterday cut the preliminary feed-in tariff for offshore wind energy developers over the next 20 years by 12.7 percent due to falling installation costs, dealing a blow to developers that were expecting it to remain the same.
The preliminary feed-in tariff should be capped at NT$5.1060 per unit during the 20-year period from next year, as the lifetime costs of wind turbine installations should slide gradually, the ministry told a media briefing.
The current tariff is NT$5.8498 per unit.
“The wind energy task force has factored in all potential cost increases in the new tariff, as interested wind farm developers have to meet some special requirements, which are not seen in other countries,” Deputy Minister of Economic Affairs Tseng Wen-sheng (曾文生) said.
The extra burden includes higher costs stemming from adopting certain locally made materials, equipment, or underwater jacks, as the government aims to help local manufacturers build wind energy-related technologies through collaborations with foreign companies.
Developers that have passed the ministry’s review and have been granted the right to build wind farms on the east coast are required to ink a power purchase agreement (PPA) with state-run Taiwan Power Corp (Taipower, 台電) by the end of next year.
The ministry said the new feed-in tariff should be finalized by February after holding public hearings to collect opinions about the issue by the end of next month.
Orsted president for Asia-Pacific Matthias Bausenwein said that the company might reconsider its plan to invest in offshore wind farms on the granted locations if the new feed-in tariff pushes through and the firm does not sign a PPA this year.
The new tariff would directly affect the procurement agreements it has inked with local partners, Bausenwein said in a statement yesterday.
Orsted signed a multimillion-US-dollar contract with a China Steel Corp (中鋼) subsidiary to buy 56 jack foundations for the company’s first 900-megawatt project to be installed in 2021.
Hai Long Offshore Wind (海龍), a joint venture between Northland Power Inc and Yushan Energy Co (玉山能源), on Tuesday said that the memorandum of understanding it signed with MHI Vestas Offshore Wind to procure 300 megawatts of offshore wind turbines would be conditional on whether it signs a PPA either this year or next year and tariffs remaining stable relative to the price this year.
The ministry also proposed trimming feed-in tariffs for solar and other forms of green energy.
The preliminary tariff for ground mount solar panel arrays would see the largest drop of 12.15 percent to NT$3.9686 per unit next year, compared with roof-top solar panels and solar facilities on reservoirs or fishing farms.
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