Japanese wind. Hey, here’s the scoop: Japanese companies are tapping out of offshore wind projects in Taiwan, and it’s causing some ripples in the industry. Rising costs and pesky delays are making things tricky, not just in Taiwan, but worldwide for the wind power biz.
Backing Out of the Game
Looks like some big players like Eneos Holdings Inc and Shikoku Electric Power Co are thinking of leaving the Yunlin Offshore Wind Project. Why? Those annoying delays might mess up their profits. JERA Co already sold its stake in another project called Formosa 3 back in June.
What’s the Buzz?
This exodus from Taiwanese wind projects hints that the sweet deal they once were might not be so sweet anymore. The industry expert, Diao Chenyuan from Wood Mackenzie Ltd, thinks it might shake up investor confidence in the wind power scene.
Some Still in the Ring
But hey, not everyone’s jumping ship! Mitsui & Co from Japan is still on board, teaming up with Canada’s Northland Power Inc to build a wind farm in Taiwan. The Ministry of Economic Affairs spilled the beans on that one.
The Big Picture in Taiwan
Taiwan’s got big plans for wind energy—they’re aiming for a 20 percent slice of their electricity pie to come from renewables by 2025, up from 8 percent last year. That’s part of why they want 5.7 gigawatts of offshore wind capacity by then, compared to the 2.1GW they have now.
Struggles on the Horizon
But hey, things aren’t all smooth sailing. Taiwan’s falling a bit behind on its energy targets—looks like their plans to cut coal, increase natural gas use, and nix nuclear power aren’t moving as fast as they’d like.
Troubles Around the Globe
It’s not just Taiwan facing a wind power hiccup. Around the world, the aftermath of the COVID-19 pandemic is making things tough for wind projects. Costs for labor and borrowing are shooting up, but these projects are often locked into selling power at rates set ages ago.
Who Else is Feeling the Heat?
Denmark’s Orsted A/S waved goodbye to a partnership for offshore wind in Norway due to these rising costs. Even BP PLC and Norway’s Equinor ASA are taking hits on their wind projects. And US-based Eversource Energy had a hefty impairment charge due to its offshore wind operations.
Taiwan’s Unique Challenges
In Taiwan, there’s an extra twist—rules that say developers must buy 60 percent of their gear from local suppliers. Sounds good, right? Well, not really. It’s making the projects super pricey, sometimes even doubling the costs. And that could mean higher bills for the folks using that power.
The Flip Side
Plus, here’s the kicker: these newer markets might not have the best suppliers yet. They might offer pricier and lower-quality gear compared to the global big shots. So, it’s a bit of a double whammy.
In a Nutshell
Japanese wind companies aren’t loving the current scene in Taiwanese wind projects, and it’s stirring things up in the global wind power world. The push and pull between costs, regulations, and market challenges are making it a bumpy ride for everyone involved.