Global Wind Energy Council

The Global Wind Energy Council helps open up new markets for wind energy. GWEC has a proven track record of success in helping to build the wind energy industry in emerging markets around the world, including China, Brazil, Mexico, South Africa, India, Argentina, and Vietnam

GWEC calls on Taiwan government to rethink proposed changes to Feed in Tariffs to protect its leadership position in offshore wind, investment in the sector and jobs

 

Brussels, 11 December 2018

  • Taiwan has created a strong leadership position in Asia’s Offshore Wind sector
  • The Offshore Wind Industry could bring some NT$880bn of inward investment into Taiwan by 2025 and create some 20,000 jobs
  • Proposed reduction in FiT of 12.7% and unexpected changes to FiT structure put offshore wind target of 5.5GW at risk and undermine investment climate for Taiwan’s economy
  • Government must seek consensus on changes to FiT levels and rethink damaging and unexpected changes to contract structures

The Global Wind Energy Council (GWEC) has called on the government of Taiwan to rethink proposed changes to the Feed-in-Tariff (FiT) for Offshore Wind projects, advising it to seek consensus in order to ensure that the large amounts of direct investment that companies plan can go ahead and ensuring that the expected creation of around 20,000 jobs takes place.

“Taiwan has been widely recognised for quickly establishing its offshore industry and attracting promises of investment from a number of world-class companies in the sector,” says Ben Backwell, GWEC’s CEO. “The government must now avoid introducing damaging and unhelpful changes to contracts to ensure that these promises materialise into long-term investments that will create tens of thousands of skilled jobs and provide clean, competitive power for Taiwan’s economy.”

Taiwan has awarded contracts for a number of major offshore wind projects under both an initial FiT scheme and later under an auction programme. GWEC points out that the highly competitive prices that companies bid in the June 2018 auction round were based on assumptions that they would be able to build up a local supply chain and economies of scale, and this requires them to be able to build the first round of FiT projects.

“Looking at the last auction prices should not lead Taiwan’s government to retrospectively change the terms for the first round of projects, which it’s worth remembering – haven’t been built yet,” says Backwell. “It took Europe over 20 years to bring prices down to their present ultra-competitive level. If Taiwan allows developers to build the projects they have been awarded and invest in the supply chain and skills, it can create its market in less than half the time and become an economic hub for offshore wind in Asia.”

The proposed changes to FiTs are of two types. Firstly, a much steeper than expected reduction of 12.7% in tariffs which will sharply reduce project revenues.

And secondly, two completely unexpected structural changes; a limit of 3600 annual full load hours; and removal of the so-called “ladder tariff”. The cap on load hours constitutes, in GWEC’s view, a perverse disincentive for the efficient growth of Taiwan’s industry, as developers will not be rewarded for using the most efficient turbine models. And the removal of the ladder tariff closes off an effective way of helping developers attract project finance at the most competitive possible costs.

Taken together, the proposed changes could reduce project revenues by approximately 20% and so make the projects non-investable, thwarting growth in the sector

GWEC is committed to facilitating dialogue between the government and the wind industry and providing research and evidence, in order to help all parties to find a solution that allows planned investment to go forward and maximise the benefit for the Taiwan’s economy and society.

The offshore wind target of 5.5GW by 2025 will bring some NT$880bn inward investment. Numerous agreements have been signed with Taiwanese supply chain companies and it is estimated 20,000 local jobs will be created.

 

About GWEC

GWEC is a member-based organisation that represents the entire wind sector. The members of GWEC represent over 1,500 companies, organizations and institutions in more than 80 countries, including manufacturers, developers, component suppliers, research institutes, national and regional wind and renewables associations, electricity providers, finance and insurance companies.

 

Press contacts

 Olivia Thornton

H+K Strategies

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T: +44 207 413 3711

 

Alyssa Pek

GWEC

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T: +32 490568139

Global Wind Energy Council

The Global Wind Energy Council helps open up new markets for wind energy. GWEC has a proven track record of success in helping to build the wind energy industry in emerging markets around the world, including China, Brazil, Mexico, South Africa, India, Argentina, and Vietnam

Global Wind Energy Council

The Global Wind Energy Council helps open up new markets for wind energy. GWEC has a proven track record of success in helping to build the wind energy industry in emerging markets around the world, including China, Brazil, Mexico, South Africa, India, Argentina, and Vietnam