Taipower is reviewing a new approach to offshore wind development as it looks to expand access to green energy.
According to the report, the state-owned utility no longer plans to develop offshore wind farms through sole ownership and turnkey contracting. Instead, it is evaluating a model based on equity participation with private-sector partners.
The report said offshore wind projects are highly complex, particularly because they depend on project financing structures.
As a state-owned enterprise, Taipower must comply with Taiwan’s Government Procurement Act, which limits flexibility in responding to changing market conditions. Those constraints have been highlighted by a dispute involving the company’s Phase 2 offshore wind project.
The five-year contract was awarded to Foxwell Power Co. under a turnkey arrangement that covers engineering, procurement, construction and a five-year operations and maintenance agreement. Since construction began, project costs have risen significantly, leaving the contractor facing substantial losses.
Although the project is now 96% complete, a dispute has emerged over differences between actual costs and the contract terms. The disagreement involves more than NT$10 billion, or about $314.5 million, and is currently under mediation.
In response, Taipower is moving toward a co-investment model with private developers to share risks. The approach is also intended to improve its ability to respond to market volatility and unforeseen challenges while continuing to expand renewable energy capacity.
The company has already taken steps in that direction. Taipower holds a 25% stake in the Formosa 4 offshore wind project, which is led by Synera Renewable Energy Group. CPC Corp. holds 15%, giving the two state-owned companies a combined 40% stake.
Market sources also said Taipower is assessing a potential investment in Formosa 6, another development led by Synera Renewable Energy Group. The utility is reportedly considering a stake of at least 25%, though it said the final investment size will depend on its financial position and overall operational outlook.
sources.notes: This article is based on a media report citing industry and market sources. It is not a company press release.
