Taiwan Offshore Wind Series: Introduction to the Taiwanese Offshore Wind Market

Due to perfect geographical and weather conditions for offshore windfarms and the local political commitment to renewable energy, Taiwan has developed into one of the most attractive offshore wind markets. These extraordinary conditions also carry some challenges.

We are pleased to launch Clyde & Co’s “Taiwan Offshore Wind Series”, a series of four articles shedding light on different aspects of the Taiwanese offshore wind sector that will be relevant to developers and contractors planning to enter the market.

The Taiwanese offshore market

After originally being dependent on imported energy to sustain an astonishing 98 percent of its power needs, Taiwan has been exploring its renewable energy potential for several years now. The trend started in 2009 when the government announced a T$45 billion (US$1.4 billion) investment in renewable energy which was supported by several other government actions. Taiwan plans to increase its renewables target to 27 GW by 2025.

At present, three demonstration offshore wind platforms have been built and connected to the grid in different locations. Several more are to follow to exploit the exceptional conditions the Taiwan Strait has to offer. Compared to other locations harvesting power through wind farms, the winds off the Taiwanese coast offer an average speed of greater than 10-12 m/s, ranking them in the top ten worldwide.

Of the 39 proposed Offshore Energy Development Zones around Taiwan’s northern and western shoreline, 23 have already moved to early planning stages or are under construction. The Taiwanese government has also announced the creation of 16 unplanned zones and the granting of permission for as yet undedicated zones in deeper water (water that is deeper than 50m) – this clearly shows the high potential of the Taiwanese market for developers.

More:  Construction Products and Materials

The market is not only exceptionally attractive for investors and developers but particularly for contractors providing engineering, delivery, and construction and installation services. However, they face a variety of different challenges:

Geography and weather

The Taiwan Strait stretches from 130km to 220km in width and up to 100m in depth between Taiwan and China. The Taiwan Shoal is located in the southern part of the Strait. This is an area of approx. 13,000km2 with sediments and sand dunes shallowing the water depth to a maximum of 40m.

The current development zones are all located in coastal areas mainly in the north and middle of the Taiwan Strait with a water depth of maximum 50m. Investors and developers are, however, welcome to also develop zones in even more challenging environments and are eligible for further permits if they develop zones in deep water surroundings. This expands the market significantly and offers bright prospects for developers as well as contractors.

These great opportunities also bring challenges. The circumstances providing for an enormous future market also pose great obstacles in the planning process.

The great wind speeds present in the area not only constitute obstacles for the installation of offshore wind farms – they regularly bring monsoon periods with exceptional waves and weather conditions.

The region is considered to be incredibly vulnerable to natural catastrophes, including typhoons, earthquakes, landslides, floods, and debris flow. According to the National Science and Technology Program for Hazard Mitigation, the island is hit on average by three to four typhoons a year.

Consequently, wind farms must be engineered accordingly. The turbines have to be robust enough to handle the power blowing through them, as does the grid they will be connected to. The piles and groundwork must sustain typhoons, monsoons and adverse weather conditions for decades in order to be feasible. This requires high-level engineering and tailor-made solutions for these specific circumstances. At the same time, this also represents the greatest advantage of Taiwanese windfarms: unlimited potential.

More:  NAIC Adopts Amendments to the Unfair Trade Practices Model Law to Allow Certain Rebating

Offshore Energy Development Zones

source: Eiger’s Map and Guide to Taiwan’s Offshore Wind Farm Projects – Eiger

Current COVID-19 situation and its influence on offshore projects in Taiwan

Entry to Taiwan is currently only permitted for family visits, business trips and short tourist visits. Testing and quarantine regulations are in place. Visitors must bear the cost of all testing and other measures that might be necessary. 

For contractors and their personnel, this means extensive planning is necessary and puts them on a very tight schedule. Personnel will have to be paid even though the contractor is not making progress on the site. Replacements must also be planned in advance.

We have also noticed a growing shortage of available vessels as their crew have had to undergo quarantine for at least two weeks if a positive case has been detected on board. This can be detrimental given that only a small number of vessels can carry out heavy lifting procedures for the groundwork.

However, with current developments around COVID-19 regarding medical treatment and especially vaccinations, the market outlook for summer 2021 is positive.

Our Taiwan Offshore Wind Series continues with the following articles:

  • Taiwan Offshore Wind Series: Offshore Construction Works – Ships and Vessels
  • Taiwan Offshore Wind Series: Dispute Resolution and Other Security Matters
  • Taiwan Offshore Wind Series: Insights on the Regulatory Framework for Contractors in the Taiwanese Offshore Market

For more information please contact Dr. Eckehard Volz or Dilara Kamphuis in the Clyde & Co Hamburg office.

More from: | Category: Legal Company News