Wind Energy – Taiwan
Taiwan Power is seeking to expand access to green energy by shifting its development strategy.
According to industry sources, Taipower no longer plans to develop offshore wind farms through sole ownership and turnkey contracting, whereby a single contractor delivers a fully operational project.
Instead, the company is evaluating a model based on equity participation alongside private-sector partners.
Taipower has been expanding its renewable energy footprint, including offshore wind. However, such projects are highly complex, particularly because they rely on project financing structures.
As a state-owned enterprise, Taipower must comply with the Government Procurement Act, which limits its ability to respond flexibly to changing market conditions. These constraints have been highlighted by a dispute relating to its Phase 2 offshore wind project.
The five-year contract was awarded to Foxwell Power Co. under a turnkey arrangement covering engineering, procurement, construction, and a five-year operations and maintenance agreement. Since construction began, however, project costs have increased significantly, leaving the contractor facing substantial losses.
Although the project is now 96% complete, disputes have emerged over discrepancies between actual costs and contract terms. The disagreement, involving more than NT$10 billion (US$314.5 million), is currently being mediated.
In response, Taipower is moving towards a co-investment model with private developers to share risks. This approach is also intended to enhance its ability to respond to market volatility and unforeseen challenges, while enabling it to continue expanding its renewable energy capacity.
The company has already taken steps in this direction. It holds a 25% stake in the Formosa 4 offshore wind project, which is led by Synera Renewable Energy Group. CPC Corp. holds the remaining 15%, giving the two state-owned firms a combined 40% stake.
