The Ministry of Economic Affairs yesterday announced the government’s finalized feed-in tariff (FIT) for renewable energy, with the outcome showing milder pricing cuts than previously proposed.
The cap on the FIT for offshore wind energy over the next 20 years is set at NT$5.516 per kilowatt-hour (kWh), representing a 5.71 percent cut from last year’s NT$5.8498, as opposed to the much steeper 12.71 percent cut to NT$5.106 first proposed in November last year.
The new FIT pricing takes into account concerns voiced by offshore wind developers, who have said that a steep reduction would threaten the viability of projects, while pundits have questioned the perceived generosity of the government’s renewable energy purchasing price, Bureau of Energy Director-General Lin Chuan-neng (林全能) said at a news conference in Taipei.
Photo: Lin Ching-hua, Taipei Times
Following negotiations with developers, the renewable energy review committee acknowledged that offshore wind projects are more costly to build in Taiwan and must be supported with higher rates, Lin said.
Taiwan’s rougher seas permit fewer construction days, while the nation’s coastal ocean floors require more costly underwater jacket structures, he said.
Offshore wind developers in Taiwan have absorbed additional expenses not found in projects in other markets, such as conducting the initial survey and project evaluation and upgrading power grids, as well as offering incentives to affected fishers, Lin said.
While the government has agreed not to cancel a tiered FIT scheme in which energy purchases are higher over the first 10 years before tapering off in the next decade, the rate has been changed from 7-3 to 6-4.
The revised rate would ensure that offshore wind developers are committed to project operations for a minimum of 10 years and address the requirements of project financiers, Lin said.
The updated terms also raised the cap on offshore energy procurement from 3,600kWh to 3,750kWh to encourage the adoption of newer and bigger 8 megawatt (MW) turbines, instead of 4MW variants.
The government turned down developers’ request to forgo an annual cap on offshore wind energy procurement, Lin said, adding that the FIT rate would fall by 25 percent to NT$4.137 when output exceeds 4,200kWh and a further 50 percent to NT$2.758 beyond 4,500kWh.
“We will not extend a bigger reward to developers simply because the winds were more favorable in a certain year,” Lin said.
The latest FIT scheme does not include the additional cost burden of local content requirements, as local supply chain partners would get up to speed and become cost efficient with time, he added.
Lin said he is optimistic that the central government and the Changhua County Government can resolve an impasse that has prevented some developers from receiving project permits.
“We should be getting a definitive answer in the next two days,” Lin said, adding that the county government stated in an official letter to the bureau that it does not have the authority to approve projects.
The government stands behind its new FIT pricing, Deputy Minister of Economic Affairs Tseng Wen-sheng (曾文生) said, adding that the public can check how the rate was derived.
“The government remains committed to offshore wind energy and we urge developers to not give up on projects easily,” Tseng said.
The FIT rate for solar power and other renewable energy sources also saw lower reductions. Solar energy has a new biannual rate with a maximum reduction of 6.15 percent for the first half of the year and a maximum of 7.78 percent for the second half, compared with a 12.15 percent cut proposed before.
SEA WARNING LIKELY: The storm, named Gaemi, could become a moderate typhoon on Wednesday or Thursday, with the Taipei City Government preparing for flooding A tropical depression east of the Philippines developed into a tropical storm named Gaemi at 2pm yesterday, and was moving toward eastern Taiwan, the Central Weather Administration (CWA) said. Gaemi could begin to affect Taiwan proper on Tuesday, lasting until Friday, and could develop into a moderate typhoon on Wednesday or Thursday, it said. A sea warning for Gaemi could be issued as early as Tuesday morning, it added. Gaemi, the third tropical storm in the Pacific Ocean this typhoon season, is projected to begin moving northwest today, and be closest to Taiwan on Wednesday or Thursday, the agency said. Today, there would likely
CHIPS AND DEFENSE: Trump said the US had lost its chip business and Taipei should pay it for defense, and added that ‘we’re no different than an insurance company’ Taiwan-US relations are solid, and both sides are in agreement that peace and stability in the Taiwan Strait and the Indo-Pacific region are everyone’s concern, Premier Cho Jung-tai (卓榮泰) said yesterday following comments by former US president Donald Trump that Taiwan “should pay” for US defense. Taiwan is thankful to the US for supporting Taiwan’s bid to participate in international organizations, Cho told a news conference in Taipei. “I know the people very well, respect them greatly. They did take about 100 percent of our chip business,” Trump told Bloomberg on June 25 in an interview that was published on Tuesday. “I think
SHOW OF SUPPORT: Taiwan has been one of the largest buyers of US defense equipment, supporting American businesses and jobs, US lawmakers said Taiwan has been paying for its own defense, a US Department of State official said on Wednesday, adding that purchases of military equipment are important to the US economy and for ensuring regional security. State Department spokesman Matthew Miller was asked at a news conference about comments by former US president Donald Trump, the Republican nominee in November’s US presidential election, who said during an interview with Bloomberg Businessweek that Taiwan should pay Washington for its defense needs. “The purchases that they [Taiwan] have made not only are important, we believe, to regional security, but are important to the United States economy,”
END OF SESSION: Other changes that passed involved the removal of restrictions on group tours to China and raising the sentence for people found guilty of child abuse Legislators yesterday passed the third reading of amendments to Article 49 of the Electricity Act (電業法), which stipulate that at least half of the electricity price evaluation committee should be made up of civilian representatives, and a resolution to invite President William Lai (賴清德) to present a state of the nation address at the Legislative Yuan. They also passed a motion proposed by the Taiwan People’s Party (TPP) and Chinese Nationalist Party (KMT) that the government remove restrictions on group tours to China. On the last day of this year’s first legislative session, the legislators attempted to deal with dozens of bills