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MOEA to finalize wind power FIT rate before Lunar New Year holiday

2019/01/22 22:47:45

CNA file photo

Taipei, Jan. 22 (CNA) The Ministry of Economic Affairs (MOEA) said Tuesday it aims to finalize the 2019 feed-in tariff (FIT) rate for the offshore wind power industry in Taiwan ahead of the Lunar New Year holiday.

Although local media reported the 2019 FIT rate will be NT$5.35-NT$5.45 per kilowatt hour (kWh), the Bureau of Energy (BOE) under the MOEA told the press no determination has yet been made and the bureau plans to finalize the figure before the start of the nine-day holiday on Feb. 2.

On Nov. 29, the MOEA announced a proposal to set the FIT rate for 2019 at NT$5.1 per kWh, down 12.71 percent from NT$5.8 per kWh in 2018, though it emphasized the figure was not final.

The BOE has solicited opinions from the industry about the FIT rate proposal with a deadline for submissions set for Jan. 29.

The steep cut in the proposal sparked an outcry among wind power developers, in particular foreign firms which had recently won bids to join Taiwan's offshore wind power development.

A FIT rate is a mechanism which makes use of long-term agreements and pricing tied to production costs for renewable energy producers.

Lee Chun-li (李君禮), deputy head of the BOE, said the FIT review committee is scheduled to hold a meeting on the 2019 FIT rate soon so the figure can be finalized before the holiday. He added that the bureau will publicize the new rate as soon as the figure is finalized.

Commenting on the reported range of NT$5.35-NT$5.45 per kWh, Lee said he had no idea where the figure came from.

Soon after the Nov. 29 announcement, companies including Yushan Energy, Northland Power, Copenhagen Infrastructure Partners (CIP) and WPD Taiwan Energy Co. issued a joint statement criticizing what they called a sharp policy U-turn by Taiwan's government.

The companies said the MOEA attracted offshore wind power investment by promising a FIT rate of NT$6 per kWh, and such a cut in the proposal would have a negative impact on Taiwan's reputation in the global market, making it harder for the island to develop related technologies.

It was confirmed on Saturday, Orsted A/S, a Danish investor in offshore wind-power sites in Taiwan, has suspended its involvement in the country's offshore wind-power development program, saying it is reevaluating its investment.

Meanwhile, Achim Berge Olsen, executive director of German wind project developer Wpd AG, said at a forum held in Taiwan Tuesday that as investments in offshore wind power are massive, developers tend to take out bank loans to finance their projects.

He said the investment risks will be shouldered by developers, while banks will be the winners since they collect a fixed return based on the lending rate if developers suffer losses.

Renewable energy is part of the Tsai Ing-wen (蔡英文) administration's "5 plus 2" economic development program, the stated goal being to transform Taiwan's economic and industrial structure.

(By Liao Yu-yang and Frances Huang)