Copenhagen Infrastructure Partners (CIP) has just hit a significant milestone in Taiwan’s offshore wind sector, securing financial close for the 495MW Fengmiao I project. This isn’t just another project; it’s a testament to the rapid maturation of Taiwan’s offshore wind market and a bold step towards the nation’s energy transition goals. Let’s dive into what this means for the sector.
Fengmiao I, located offshore Taichung, is CIP’s third offshore wind venture in Taiwan, following Changfang & Xidao, and Zhongneng. But it’s not just another project in the pipeline. It’s the first from Taiwan’s Round 3 to reach financial close and commence construction, setting a new benchmark for the region. The project secured site exclusivity and a 500MW grid capacity in Taiwan’s Round 3.1 auction last December, showcasing the government’s commitment to expanding renewable energy infrastructure. The project is expected to complete construction by the end of 2027, adding a significant chunk of clean energy to Taiwan’s grid.
The project’s financing is a complex web of international and local support. A consortium of 27 international and Taiwanese banks has committed T$103bn ($3.1bn) to the project. This isn’t just about the money; it’s about the trust and confidence these institutions have in Taiwan’s offshore wind sector. A portion of the debt will be guaranteed by four export credit agencies (ECAs) and Taiwan’s National Credit Guarantee Administration, further underscoring the project’s viability and the government’s backing.
But what’s truly groundbreaking is the corporate power purchase agreements (PPAs). Fengmiao I has secured long-term PPAs with six large local and international corporates for its entire capacity. This isn’t just about securing revenue; it’s about setting a new precedent for corporate renewable energy procurement in Taiwan. It’s about large energy users taking responsibility for their carbon footprint and driving demand for clean energy. This is a significant shift in the market dynamics and could spur more corporates to follow suit.
CIP partner and head of Asia-Pacific, Thomas Wibe Poulsen, puts it succinctly: “Financial close on Fengmiao I marks a major milestone… This sets a new benchmark for Taiwan’s rapidly maturing offshore wind market under the government’s Energy Transition 2.0 policy.” This isn’t just about one project; it’s about the trajectory of the entire sector.
Moreover, the project’s construction by a consortium of international and local suppliers experienced in Taiwan’s offshore wind sector ensures knowledge transfer and capacity building. Vestas, the turbine supplier for CIP’s existing projects, will provide 33 units of its latest 15MW turbine. This isn’t just about technology; it’s about innovation and efficiency.
The Fengmiao I project could spark a wave of similar ventures, accelerating Taiwan’s energy transition. It could also attract more international investors, further boosting the sector. But it’s not just about Taiwan. This project could serve as a model for other countries looking to expand their offshore wind capacity. It’s about learning from Taiwan’s experience and adapting it to different contexts.
However, challenges remain. The sector needs to address issues like grid integration, environmental impact, and community engagement. But with projects like Fengmiao I, Taiwan is well on its way to overcoming these hurdles. The future of offshore wind in Taiwan looks bright, and Fengmiao I is a significant step in that direction.
