Bank sees opportunity in Taiwan's green energy market

Taipei, Oct. 30 (CNA) Macquarie Capital of Australia sees Taiwan's green energy project as Asia's biggest business opportunity and has decided to invest NT$25 billion (US$790 million) over three years in Taiwan's renewable energy market.

Touting his company's record in Korea, where Macquarie earns a 6-7 percent return on investment in infrastructure projects, Macquarie Chairman John Walker said he expects a similar return in Taiwan, but argued that Taiwan needed to raise the wholesale price for renewable energy.

In an interview with CNA, Walker said his company has signed a letter of intent with the Ministry of Economic Affairs to build offshore wind farms to help realize the government's goal of replacing nuclear power with green energy by 2025.

Taiwan has relied on its three existing nuclear power plants for nearly 20 percent of its electricity output in the past and hopes to supply that much renewable energy by 2025, after the three nuclear power plants are phased out.

Walker said his group was seeking "local partners" to acquire land, overcome cultural and policy problems and share in the investment while Macquarie will offer professional skills, management knowhow and capital to help align Taiwan with world standards.

He noted that his team has scouted land in Changhua and other central Taiwan locations but said it was not yet time to disclose the names of Macquarie's local partners.

Walker promised to introduce sophisticated equipment for generating wind power and transfer relevant technologies and management skills to its local partners.

But he urged the government here not to follow Europe in gradually cutting the wholesale price of renewable energy because Europe has devoted a lot of resources to developing alternative energies for many years.

Taiwan is still in its initial stage of developing renewable energy, he said, and instead of cutting its wholesale price it needed to raise it as a means of creating greater incentives to encourage investment in this area.

In making that suggestion, Walker stressed that he was not being greedy but was drawing on his company's 20 years of experience in the business.

Based on that experience, when a government offers "generous" incentives to promote renewable energy investments, just a few successful examples will attract more investors to form a virtuous cycle of competition that ends up benefiting the whole market.

On the other hand, Walker said that what foreign investors fear most are inconsistent policies, as was the case with Taiwan's fourth nuclear power plant.

The project had construction suspended, was then resumed and now has been mothballed shortly before it was expected to operate, which Walker said was not a good thing for either its foreign contractors or local builders.

Walker said he has seen the Tsai Ing-wen administration's determination to push ahead with its green energy program, which he said Macquarie sees the "biggest business opportunity in Asia."

The Sydney-based Macquarie Capital has invested in a 288MW offshore wind farm in the German Baltic Sea and a 336MW offshore wind farm off the coast of Suffolk in southeastern England.