Danish developer Orsted is to “pause and revisit” its offshore wind development activities in Taiwan, after permitting delays meant it was unable to meet a power purchase agreement deadline for a 900MW project.
Orsted said the deadline for signing a PPA for the Changhua 1 and 2a project was today, however, Taiwan’s Bureau of Energy had not issued an “establishment permit for the projects by close of business local time”.
Therefore, it is “no longer possible for Orsted and the Taiwanese utility Taipower to sign a 2018 PPA for Changhua 1 and 2a”, the company said.
Orsted offshore chief executive Martin Neubert said the company is disappointed with the process and the delay of the establishment permit and PPA.
As a result, he said the company “will now pause and revisit all our project activities, the timeline of the projects, and our supply chain commitments and contracts as we had assumed signing of the PPA in 2018”.
He added that Orsted is “very concerned” about the a proposed 13% cut to the 2019 feed-in tariff rate suggested by Taiwan’s Ministry of Economic Affairs.
“We will need to see significant changes to these proposals before we can progress any further towards a final investment decision on the projects,” he said.
The company said the feed-in-tariff needs to reflect the “extraordinarily high costs faced by Greater Changhua 1 and 2a, mainly related to creating a local supply chain at scale, reinforcing the onshore grid infrastructure and building, operating and maintaining offshore wind farms in challenging waters where typhoons and earthquakes occur”.
Neubert said: “The proposed retrospective changes would jeopardise the creation of a local offshore wind supply chain, harm the planned transition to renewable energy and cause significant uncertainty among international investors looking to Taiwan.
“Only with a stable and predictable policy framework, Taiwan has the potential for developing large-scale clean power production while creating thousands of local jobs and becoming a hub for offshore wind in Asia-Pacific.”
Several other projects have also missed the PPA deadline, it is understood.
Copenhagen Infrastructure Partners declined to comment on its 550MW-plus Changfang 1&2.
Northland Power did not immediately respond to a request for comment.
German developer WPD signed a PPA last year for its 640MW Yunlin wind farm off the island’s west coast as did Swancor and Macquarie for the 376MW Formosa 2 project off Miaoli.