Japanese companies are dropping out of offshore wind projects in Taiwan, one of fastest-growing markets for the technology, as rising costs and worsening delays plunge the industry into deeper trouble worldwide.
Oil refiner Eneos Holdings Inc last week said that it might exit the Yunlin Offshore Wind Project (允能雲林離岸風廠) after regional utility Shikoku Electric Power Co decided to pull out of the same project due to delays threatening its profitability.
Electricity generator JERA Co announced that it completed the sale of its stake in Formosa 3, another Taiwanese offshore wind project, in June.
Photo courtesy of Taiwan Power Co
“The withdrawal of companies indicate that the attractive proposition of Taiwan’s offshore wind is diminishing, which might affect investor confidence in the sector,” said Diao Chenyuan (刁晨元), managing consultant for power and renewables research at Wood Mackenzie Ltd.
However, Japan’s Mitsui & Co has decided to continue investing in building offshore wind farm in Taiwan, teaming up with Canada’s Northland Power Inc, the Ministry of Economic Affairs said yesterday.
Spanish power company Iberdrola group, Blue Float Energy Co, France’s EDF group and Floatation Energy are also continuing with their plans to develop offshore wind farms, the ministry said.
Taiwan’s wind farms are part of a plan to increase the ratio of electricity coming from renewables to 20 percent by 2025, from 8 percent last year.
The nation aims to have 5.7 gigawatts of offshore wind capacity by then, compared with 2.1GW now.
Taiwan is also looking to increase its use of natural gas, cut coal and eliminate nuclear power, but is falling behind schedule on its targets.
Fewer players in the market reduces competition and leads to undersubscription in tenders, and could jeopardize Taiwan’s targets, Diao said.
The troubles in Taiwan’s wind industry compound a crisis that has already hit other parts of the world, as the aftereffects of the COVID-19 pandemic push up the cost of labor and borrowing.
While many businesses are able to offset cost changes by raising prices, many wind developments find themselves locked into contracts to sell power at rates set years ago.
Denmark’s Orsted A/S this week withdrew from a partnership developing offshore wind in Norway due to rising costs, while BP PLC and Norway’s Equinor ASA recently took large impairments on projects.
US-based public utility Eversource Energy also incurred a US$331 million after-tax impairment charge in the second quarter for its offshore wind operations.
In Taiwan, rigid requirements mandating that developers procure 60 percent of their equipment from local manufacturers have made projects even more expensive, sometimes doubling costs.
The rules could lead to a sharp rise in offshore tariffs, saddling ratepayers with higher prices and bringing delays in installations, BloombergNEF Analyst Leo Wang said in a report this month.
Less experienced suppliers in new offshore wind markets also often offer products that are more expensive than their international peers and of lower quality, he said.
Additional reporting by Lisa Wang
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
JET JUICE: The war on Iran’s secondary effects have seen fuel prices skyrocket, knocking flight schedules down to earth in return as airlines struggle with costs Airline passengers should brace for more irritation in the next few months as carriers worldwide cancel flights and ground planes to cope with stratospheric increases in jet-fuel prices. Dutch flag carrier KLM is the latest company to cut its schedule, saying on Thursday that it would scrap 80 return flights at Amsterdam’s Schiphol Airport in the coming month. That puts it in the same league as United Airlines Holdings Inc, Deutsche Lufthansa AG and Cathay Pacific Airways Ltd, which have all pruned itineraries to mitigate costs. Global capacity for next month has been reduced by about 3 percentage points, with all
Taichung reported the steepest fall in completed home prices among the six special municipalities in the first quarter of this year, data compiled by Taiwan Realty Co (台灣房屋) showed yesterday. From January through last month, the average transaction price for completed homes in Taichung fell 8 percent from a year earlier to NT$299,000 (US$9,483) per ping (3.3m²), said Taiwan Realty, which compiled the data based on the government’s price registration platform. The decline could be attributed to many home buyers choosing relatively affordable used homes to live in themselves, instead of newly built homes in the city’s prime property market, Taiwan Realty
Taiwan is attracting a growing number of foreign jobseekers as companies increasingly recruit overseas talent to ease labor shortages and expand global reach, recruitment platform 104 Job Bank (104人力銀行) said yesterday. More than 40,000 foreign nationals searched for jobs in Taiwan through the platform last year, a 28 percent increase from a year earlier, the company said. Malaysians accounted for the largest share of overseas jobseekers at 12.2 percent, followed by Indonesians at 11.9 percent and Vietnamese at 10.8 percent. Indonesian applicants surged more than 50 percent year-on-year, while Vietnamese jobseekers rose by more than 30 percent. Applicants from the
RSS