The Bureau of Energy (BOE) has agreed to allow Yunneng Wind Power Co (允能風力發電), the project developer of a 640 megawatt (MW) wind farm off the coast of Yunlin County, to adjust its shareholding structure as the company faces financial difficulties.
Yunneng is 48 percent owned by German wind farm developer Wpd AG, 27 percent owned by a consortium led by Japan’s Sojitz Corp and 25 percent owned by Thailand’s Electricity Generating Public Co Ltd.
Wpd plans to sell a 23 percent stake in Yunneng to French energy giant TotalEnergies SE, hoping that capital from the new shareholder would help maintain the Yunlin project’s normal operations and safeguard suppliers’ interests.
Photo: Lin Jing-hua, Taipei Times
“The company [Yunneng] said it was hit by COVID-19-related cost overruns and would not be able to survive without the injection of capital,” said Chen Chung-hsien (陳崇憲), director of the bureau’s Energy Technology Division. “To prevent disruption of the project, we granted them an exception, even though this is not what we want to see.”
The bureau said that wind farm developers should retain at least a 50 percent stake in their projects to ensure that they remain responsible for the project’s construction and operations.
Before giving its approval, the bureau required an independent watchdog to verify that Yunneng was in dire financial trouble and ensure that all the funds obtained from TotalEnergies would be used on project construction, Chen said.
Yunneng is banned from any more changes in ownership, or it would face a fine of NT$350 million (US$12.66 million), he said.
It has been asked why Yunneng, which has so far installed only four of the Yunlin project’s 80 turbines, would only be 25 percent held by Wpd after the share sale.
Wpd Taiwan Energy Co (達德能源) chairwoman Yuni Wang (王雲怡) said that Wpd remains committed to the completion of the project and that selling large portions of projects is a “common business model” used elsewhere by wind farm developers to free up capital.
“Going forward, Wpd will comply with BOE ownership rules on future projects,” Wang added.
Looking ahead to round 3 of Taiwan’s offshore wind farm development, Chen said that the bureau is going to “keep an even closer eye” on developers’ financial ability to complete projects.
“The 50 percent ownership red line will stay in place, if not reinforced,” Chen said. “We will not allow Taiwan’s offshore wind development market to become a place for foreign developers to play shell games.”
Holly Chu (朱佑翎), a senior associate with law firm Eiger, said that once a precedent has been set, it might be difficult to prevent other companies from following Yunneng’s lead if they want to reduce their exposure to the Taiwanese market.
“If developers do not feel comfortable with their projects here, selling a part of the project could be a part of their risk management strategy,” Chu said.
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