TRADE FINANCE: STEF
By attracting international corporates and financing with a partnership approach to offshore wind farms, Taiwan is driving renewable energy growth. flow’s Clarissa Dann provides an overview of two large, syndicated export credit agency deals
W
hen Taiwan’s first female president, Tsai Ing-wen, swept to power in 2016, she made
the phasing out of nuclear power and the expansion of renewable energy a strategic priority. Green energy was one of the ‘five pillar industries’, with climate protection central to her government’s policy.
“This was very exciting,” says Ingrid Chang, Head of Corporate Coverage at Deutsche Bank AG’s Taipei Branch. She explains that the government set ambitious renewable energy targets to be met by 2025, when 20% of the country’s electricity supply must come from renewable resources.
According to the Brussels-based Global Wind Energy Council’s (GWEC’s) Global Wind Report 2019, which was published in March 2020, the global offshore wind industry installed a record 6.1 gigawatts (GW) of new capacity in 2019, bringing total offshore capacity to 29.1GW. “This growth was led by China, which remains in the number-one position for new offshore capacity with 2.3GW installed in 2019. In terms of cumulative offshore wind capacity, the UK remains in the top spot with 9.7GW, accounting for nearly one-third of the 29.1GW of total global capacity,” the GWEC announced in a press summary at the time.1
Asia is therefore very much regarded as a growth opportunity. Denmark’s Ørsted, the world’s largest owner of offshore wind power sites (previously known as DONG Energy), told Reuters in 2018 that Taiwan is seen “as a stepping stone into Asia Pacific”.2
Transition pieces for the Yunlin
wind farm project, manufactured by CTCI-M, at Kaohsiung port
Attractive feed-in tariffs, a stable regulatory framework, supportive government policies and the country’s strategic location have attracted a number of top offshore wind developers to invest in renewable energy infrastructure in the country. Among them is Germany’s Bremen-based wpd. Set up in 1996, it has installed 2,200 turbines around the world with a total of 4,450 megawatts (MW) of combined offshore and onshore capacity. The company’s offshore Yunlin
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project in Taiwan is set to deliver 640MW by 2022.3
Berge Olsen, notes that “the success of projects in Taiwan is key to its role as a preferred market for investors and a hub for the region”.
As a client of Deutsche Bank that has much of its onshore installed capacity in Germany, it was natural that wpd turned to the bank for support in developing capacity in the country. “It was a privilege to be part of the team helping the Taiwan government reach its renewable energy target” says Chang, who, as an on-the-ground Mandarin- speaking Taiwanese, is well placed to work with the government, its energy regulator and local banks.
Market opportunities and challenges Taiwan’s offshore wind resources have helped it establish itself as an attractive market for offshore wind in Asia, with speeds of up to 12 metres per second in the Taiwan Strait. However, frequent earthquakes and typhoons can, notes law firm Watson Farley & Williams, “reduce the window for construction, increase the risk of component fatigue and affect how risk is allocated between the parties”.4
In January 2018, Taiwan’s government announced its intention to achieve a target of 5.5GW of offshore wind energy capacity by 2025. According to the GWEC, it has since added a further 10GW to its offshore wind capacity target for 2026–2035.5
This,
says Chang, “provides the long-term visibility needed to generate a local offshore wind industry and supply chain”.
To support the development of renewable energy, in 2009 the government passed the Renewable Energy Development Act, which provides for a feed-in tariff system and offers a range of incentives to renewable power producers.
The country’s Electricity Business Act was also subject to substantial reform in 2017, including provision for the future liberalisation of the electricity market. It also addressed the development
39 Its Chief Operating Officer, Achim
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