Ørsted & Northland Power Awarded 1,664 Megawatts In Taiwan’s Second Offshore Wind Auction Round

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The Taiwan Bureau of Energy announced last week the winners of its second offshore wind auction, awarding 1,664 megawatts in offshore wind capacity to Danish wind energy developer Ørsted and Canadian independent power producer Northland Power.

Formosa 1, Phase 1, Taiwan’s first offshore wind farm

Taiwan’s offshore wind energy sector has been ramping up at an incredible rate over the last 6 to 18 months, culminating most recently in May with the announcement of 3.8 gigawatts (GW) awarded to seven companies for 10 offshore wind farms. However, at the time it was known that the Taiwanese Government would be awarding a further 2 GW in June.

Taiwan’s Bureau of Energy and Ministry of Economic Affairs announced the results from its second offshore wind auction last Friday, in which it awarded 1,664 MW (down on the 2 GW predicted) to two developers for four separate offshore wind farms.

Danish power company and offshore wind energy developer Ørsted was awarded 920 MW worth of capacity for its development in the Changhua region, in addition to the 900 MW which was awarded to the company earlier this year. The awarded capacity will require the relevant permits and commit to a final investment decision, but if the company moves forward its new capacity would be built and operational in 2025. Specifically, according to the Bureau of Energy, Ørsted was awarded 337.1 MW for one project, and 582.9 MW for the second.

Importantly, Ørsted’s winning bids came in at an average TW$2,548 (US$84.1/€72.2) per MW-hour (MWh).

“Following a highly competitive auction process, we’re very pleased with adding further value-creating capacity in Changhua,” said Martin Neubert, Executive Vice President and CEO of Ørsted Wind Power. “Today’s results are promising for Taiwan’s transition to renewable energy. The outcome of the auction proves once again that when governments commit to ambitious buildout targets and create stable, transparent and good framework conditions, the offshore wind industry will deliver.”

“Ørsted has come to Taiwan and set up its Asia-Pacific hub here,” added Matthias Bausenwein, General Manager for Ørsted in Asia-Pacific. “We are very happy to see the offshore wind industry in Taiwan mature and to be able to significantly contribute to this development. With the additional projects in 2025, we have a solid pipeline on which we will further strengthen our local presence.”

Port of Taichung Harbour, Taiwan, home to future offshore wind development

The rest of the capacity was awarded to Canadian independent power producer and operator Northland Power, which received a total of 744 MW over two wind farms, the 232 MW Hai Long 2 offshore wind farm and the 512 MW Hai Long 3 offshore wind farm. The two projects were won at a price of TW$2,224 (US$73.1/€62.6) and TW$2,502 (US$82.3/€70.41). Northland Power also won 300 MW for its Hai Long 2 project earlier this year, bringing that project up to 532 MW and both projects will be built and completed in 2025. Both projects have already received environmental permits and development work is already ongoing.

“Today’s announcement represents another significant milestone for Northland,” said John Brace, CEO of Northland. “This additional capacity will enhance our ability to generate efficiencies in the delivery of world-class offshore wind projects that will build up the local supply chain, supporting the achievement of Taiwan’s ambitious green energy targets from multiple aspects.”

Now that Taiwan has awarded 5.4 GW worth of offshore wind power, it is also now time to drop the “burgeoning market” tag, and begin to consider Taiwan as not only an established market but as one soon set to be a dominant player. A year ago, Taiwan wasn’t even in the top 10 of countries with a significant pipeline of offshore wind projects. Now, it ranks third, according to new figures published last week by RenewableUK. This is an idea that has also been echoed by wind energy analysts.

“With bids between $73.2 and $83.9/MWh, the auction set a powerful new benchmark for offshore wind in Asia and showed that new markets can emulate the European experience if they commit to scale,” said David Hostert, head of wind research at Bloomberg New Energy Finance (BNEF). “The auction proves our point about two price curves existing in the market; one for new and one for established markets. As we had predicted, the drop from the higher cost new market curve to the lower cost established market curve occurred around the 3-4GW mark, just when Taiwan had allocated 3.8 GW in capacity. Taiwan now counts as an established market.”

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Joshua S Hill

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