2018 capacity allocations for offshore wind
In early 2018, the MOEA released the “Directions for Allocating
Installed Capacity of Offshore Wind Potential Zones” (the
“Allocation Directions”) which provided for a selection and
bidding process for the allocation of 5.5GW of grid capacity
to offshore wind projects which obtained approval of an
Environmental Impact Assessment by the end of 2017.
The Allocation Directions provided for:
- a selection procedure for the award of fixed FiTs for:
- > a total capacity of 0.5GW for grid connection in 2020 (Tier 1
or ‘fast track’ projects); and
- > a total capacity of 3GW for grid connection between 2021
and 2024 (Tier 2 projects); and
- a selection and bidding procedure for the award of a
competitively determined tariff, for a total capacity of up to
2GW (Tier 3 projects).
The MOEA awarded a total of 3,836MW of grid capacity through
the selection process (Tier 1 and Tier 2 above) in April 2018,
and subsequently awarded 1,664MW of grid capacity through
the bidding process (Tier 3 above) in June 2018. A full list of the
projects that were allocated capacity in the selection process and
the bidding process can be found on the MOEA website.
The tariff applicable to the Tier 1 and Tier 2 projects will be the
FiT applicable to offshore wind at the time the relevant project
enters into the PPA with Taipower, whereas the tariff applicable
to the Tier 3 projects were determined by competitive auction
and are significantly lower than the current fixed FiT for offshore
wind. There are also differences in the terms of the Grid Contract
applicable to each of Tiers 1, 2 and 3 (see below).
All projects awarded capacity pursuant to the Allocation
Directions are required to comply with the requirements set out
in a grid contract (“Grid Contract”) to be entered into with the
MOEA. The form of Grid Contract will be different for each of
Tiers 1, 2 and 3 and will address (among other things):
Offshore wind PPA
The model form of PPA that is used by Taipower for offshore
wind projects regulates:
- the purchase of electricity by Taipower; and
- the connection of offshore wind projects to Taipower’s
It is a short document which does not seek to provide a
comprehensive allocation of risks as between the generator
and Taipower / government (as would be the case under a
typical long form emerging markets "PPA"). Instead, it is more
analogous to a prescribed statutory PPA used in the context of
a feed-in-tariff model in developed and/or liberalised markets,
and should be read in conjunction with the applicable regulatory
regime in Taiwan.
The model PPA for offshore wind was updated by Taipower in
December 2017 and is in a very similar form to the template
form of PPA used in numerous existing onshore wind and solar
projects in Taiwan.
Development Assistance Fund
The MOEA announced in February 2018 draft Rules on the
Usage, Supervision and Management of Power Development
Assistance Funds, which require projects to make contributions
(based on electricity generated) to the ‘Power Development
Assistance Fund’. The Fund will be used mainly to promote local
community development and welfare.
The government intends to achieve 20GW of solar PV installed
capacity by 2025 through the development of both rooftop and
ground-mounted systems, which are expected to respectively
account for 3GW and 17GW.13 There have also been examples of
floating solar technology uses.
In September 2016, the government approved a “Solar PV
Two-Year Promotion Project” targeting to achieve 1.52GW of
additional solar power generation within a two-year period. Under
this plan, the government was to:
- create a “single-window” system to speed up administrative
- designate further locations for solar power generation
- plan for grid expansion
- encourage domestic banks to provide financing
- amend laws and regulations to reduce regulatory restrictions
on the development of solar power production.
The government is also encouraging the development of small
scale capacity through the “Million Rooftop PVs Program”.