The world’s biggest developer of offshore wind farms is weighing nearly US$13 billion of projects in Taiwan, saying that the COVID-19 pandemic has not shifted its optimism about the region.
The potential investments by Orsted A/S would include the Greater Changhua 3 wind farm, which it plans to bid for in the next round of auctions if the conditions are “manageable,” Orsted president for Asia-Pacific Matthias Bausenwein said in a telephone interview.
The auction is scheduled for the end of this year, and the company would wait to see the framework and rules for the contest before deciding whether to participate.
Orsted has already built and commissioned Formosa 1 (海洋風電), the first commercial-scale offshore wind farm in Taiwan, with joint venture partners. It is also building the Greater Changhua 1 and 2a wind farms, which are estimated to be completed next year or in 2022. Another plan is to build the Greater Changhua 2b and 4 wind farms in 2025.
Total capital expenditure for all four projects, with a capacity of 2.4 gigawatts, is estimated at up to NT$380 billion (US$12.5 billion).
“At the moment, we don’t see the coronavirus changing any of our plan,” Bausenwein said. “Business is as usual. We aim to be a long-term player in Taiwan.”
Orsted on Wednesday said that it is sticking to its guidance for this year, despite the coronavirus, and that its liquidity position is strong.
Funding for the investment would be from Orsted’s own capital and financing from Taiwan’s local financial institutions, as well as bond market, backed by an Orsted parent company guarantee.
The company has issued its first batch of NT$12 billion green bonds in Taiwan, and it might go ahead with another.
In addition to Taiwan, Japan is the next big step for Orsted in the Asia-Pacific region. The company has formed a joint venture with Tokyo Electric Power Co to prepare a bid for an auction at the end of this year.
Taiwan and Japan are both mountainous and rely heavily on fossil fuel imports, with highly populated coastal areas that make offshore wind an ideal renewable energy source.
Taiwan aims to be a leading developer of green energy. It has targeted 5.7 gigawatts of offshore wind power by 2025 and another 10 gigawatts by 2035.
BloombergNEF expects Japan’s offshore wind capacity to exceed 9 gigawatts by 2030.
“Taiwan is a lively market with diversity of players, both local and global ones,” Bausenwein said. “We are well-positioned for any future auction with our commitment and what we have delivered.”
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