Orsted's Formosa venture to boost Taiwan's offshore wind status

The company secured $612m to build the project.

Taiwan is set to become more attractive for foreign investments as Danish power firm Orsted opens its first commercial offshore wind farm in the country, according to a GlobalData analysis.

The 128MW plant Formosa 1 is a joint venture of Orsted, which owns a 35% stake, together with JERA (32.5%), Macquarie Capital (25%), and Swancor (7.5%). It is Orsted’s first Asia Pacific offshore wind project where it has secured $612m (TWD18.7b) to build the farm.

“A good number of the world’s biggest international players are attracted by the island’s strong winds, shallow coastline and stable regulatory framework, as well as the availability of 20-year power purchase agreements with a feed-in-tariff (FiT),” GlobalData director of power Harminder Singh said.

Taiwan’s pipeline currently has projects with more than 10GW of cumulative capacity, with the government setting a renewable energy target of 20% of the energy mix by 2025. The country hopes to add 20GW of solar photovoltaic (PV) installations, 5.5GW of offshore wind and 1.2GW of onshore wind capacity by the same year.

“The Taiwanese government is focusing more on the offshore segment of the wind power market, as there is limited land available, along with large potential offshore resources,” Singh added.

A final investment decision (FID) has been made with 900MW of offshore wind capacity, while an FID for another 920MW is underway. Orsted’s other plans for Taiwan include the Greater Changhua 1&2a projects (900MW) expected to be commissioned by 2022, and the Greater Changhua 2b&4 projects (920MW) expected by 2025, pending FID in 2023.

Another reasons for Taiwan’s attractiveness towards European firms is to gain a stronghold into other Asian countries like Japan and South Korea which are yet to adopt offshore wind, Singh explained, with wpd, Cobra Concesiones, and EOLFI scrambling for a place in the region.

“If the plans outlined by the government materialise, Taiwan would be among the top ten countries in terms of offshore wind capacity by 2030,” Singh concluded.

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