Building an Industry: offshore wind in Taiwan

Building an Industry:

offshore wind in Taiwan

2021 Global Offshore Wind Summit - Taiwan

Chih-Ching Yang

Deputy Director General

Industrial of Development Bureau, MOEA

Oct 26, 2021

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Contents

一

I

II

IRP Planning for Zonal

Development III

IV

Policy and Strategies for Offshore

Wind Industry

Driving Offshore Wind: Outcomes

Conclusion

2

Offshore wind is widely seen as a main driver for economic recovery for countries worldwide

Target：30GW by 2030

Job：77,000

Investment：$12B/year


Job：60,000

Local parts：60%

Export Value：2.6B GBP


40GW by 2040

Job：20,000


30-40GW by 2040

Economic Value：JPY 1T

Local parts：60%(2040)

Target：8.75GW by 2028

Job：15,000

Focus on floating wind


Job：10,000

Investment：€20B


Jobs：57,000

Investment：NTD 2.6T


Job：>10,000

Investment：€28.6B

I. Policy and Strategies for Offshore Wind Industry(1/5)

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◼ Taiwan has become a regional leader in offshore wind, poised to become the green

energy hub in Asia

◼ Collaboration with industry pioneers worldwide for global market

◼ A flourishing domestic OFW market for steady demand, driving supply chain

sustainability

Let’s expand our footprint in Asia, and join the global

green energy supply chain. —President Tsai

President Tsai received a delegation of business executives in OFW and representatives from foreign

embassies (Oct 15, 2020)


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Offshore Wind: Driver for Energy Security & Industry Growth

Phase 1

Demo Incentive Program

Phase 2

Zone Application for Planning

Phase 3

Zonal Development

◼Formosa 1: 2 demo turbines (2017)

◼Formosa Demo project: 20 turbines, 120MW (2019)

◼Taipower Demo project: 21 turbines, 109.2MW (2021)

◼2021-2024: 3.8GW via Selection

◼2025: 1.7GW via Auction

◼1.5GW/year deployed during 2026-2035

◼2-stage process: eligibility & pricing

◼Level of Industrial Relevance considered

Subsidy for initial results

Zones of Potential announced

Gov-led industry development

✓2 major foundation clusters

(SDMS, Century Wind)

✓Turbine manufacturing hub at

Taichung port (SGRE, Vestas)

✓Enhance existing capacities

✓Optimize business environment

✓Aim to be regional hub

✓Turbine components: Swancor,

Fortune, Powercom, HTE,

Walsin

✓Foundation: MRY

Industrial clusters

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(1) Build infrastructure for the industry to develop upon: plan offshore wind power zones

to facilitate investment and form clusters.

(2) Facilitate the dev. of supply chain: Attract international manufacturers to Taiwan via

market incentives; encourage international and local suppliers to form

partnerships in turbine manufacturing, foundation and vessel manufacturing, etc.;

create a supply chain for the industry.

Strategies

Goal

Jan. 18, 2018: Announcement of Taiwan’s Offshore Wind Power PolicyPromote the dev. of Taiwan’s offshore wind power industry, build the

supply chain, and compete in Asia-Pacific markets

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4 Drivers for Building an OFW Supply Chain in Taiwan

•OFW Industrial Relevance Program building supply chain✓ Setting up factory via sole proprietorship/ JV

✓ Tech transfer, OEM

✓ Supply chain partners

•OFW engineering and key component inspection & certification program•O&M inspection and servicing technologies program

•Taichung Harbor: OFW

Industrial Park

✓Turbine component

production, nacelle assembly

✓Pre-assembly port

✓O&M base

•Foundation clusters at

Taipei Harbor & Sinda

Harbor (Kaohsiung)

•Offshore Wind Program and

Master Program Course

•Welder Training✓Gov: technology upgrading for OFW

foundation industry

✓Education: Fortune Institute of

Technology, NKUST

✓Industry: CSBC Academy, Century-

Bladt welding school

•Maritime talent development✓MIRDC Maritime Talent Devt. &

Accreditation Center (Kaohsiung)

✓TIWTC (Taichung)

✓NKUST (Wind Industry Training

Base)

•National Financing

Guarantee Scheme✓10Bn-NTD in size, with 100Bn

financing guarantee resources

✓Application to open by end of

2020

✓Wind farm developer: max loan

for local goods & service

procurement: 30Bn TWD, max

guarantee period: 20y (per

company).

✓Domestic equipment & service

provider: max loan: 2Bn TWD;

for export purpose: 500Mn TWD,

max guarantee period: 5y

Supply

Chain


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Type Items Global Firm Local Firm

Sole Investment

Nacelle Assembly、PCS、PCM

⚫Nacelle Assembly：Vesats、Siemens Gamesa⚫PCM/UPS：KK Wind Solutions

Joint Venture

Foundation Bladt Century Iron →Century Bladt Foundations

Spinner Cover、Nacelle Cover Fassmer Atech→Fassmer Atech

Cable Installation Boskalis HwaChi→Boskalis HwaChi Offshore

geotechnical survey Fugro IOVTEC→Fugro IOVTEC

OEM

Tower CSWind Chin-Fong

Blade Vestas Tien-Li

Transformer for Wind Turbine

Hitachi ABB、Mitsubishi Shihlin

Procurement

Onshore Substation(Transformer、Switchgear、Switchboard)

⚫Orsted signed the EPC contract with Star Energy

⚫Wpd signed the EPC contract with GE

⚫CIPsigned the EPC contract with Teco

Chung-Hsin Electric and Machinery(CHEM) FortuneTecoShihlin

Casting Vestas YGG

Cable for Wind Turbine Vestas Walsin Lihwa

Fastener Vestas Bolton

Generator Stator/Rotor The Switch Teco

International Cooperation to Build Supply Chain

II. Driving Offshore Wind: Outcomes (1/3)

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Foundation cluster:Pinpile & jacket factory by Century

Wind(Century Steel) at Taipei Port,

supported by 6 local suppliers

OFW Industrial Zone:Nacelle assembly facilities at Taichung Port set up by top

turbine makers, with >15 local suppliers to join their global

supply chains

South Foundation cluster:Jacket foundation plant by SDMS(CSC subsidiary) at SingDa Harbour,

Kaohsiung, supported by 21 local suppliers.

CTCI’s 2 plants in Kaohsiung, dedicated to pinpile and TP production.

Tien-Li (Blade) YGG (Casting) SGRE (nacelle assembly)

Central

North

MVOW (nacelle assembly)

An OFW Supply Chain Built from Scratch

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North

Central

South

➢New Taipei✓Century Wind Power

✓Walsin

➢Taoyuan✓Fortune

✓Teco

✓Allis➢Taichung✓SGRE

✓Tien Li

✓Chinfong/CSWind

✓Yeong Guan

➢Changhua✓ Tai-Shing

✓ APEX

➢Yunlin✓ FHI

➢Nantou✓ Swancor

➢Kaohsiung✓SDMS

✓China Steel

✓CSSC

✓CSMC

✓Lianglian

✓Chung Mao

✓Hengchang

✓Jinching

✓Steelguard

✓Shianghong

✓Yinzhang

✓Shengcun

✓Bore Yuan

✓CTCI

✓CSAC

✓Fermo

✓Wanchi

✓Century Huaxin

➢Tainan✓Rong Sheng

✓Boltun

✓Taya

Turbine components

Foundation

Onshore substation

facilitiesMaritime engineering vessels

✓Chung-Hsin

✓Shihlin

✓Century Steel

✓Delta

➢Yilan✓ Lungteh

East

➢Pingtung✓Bing Tsen

✓Ming Rong

Yuan

➢Chiayi✓Femco

Source:MIRDC

Taiwan’s offshore wind industry clusters


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1.Review progress of Phase II: delivery status & challenges.

2.Continuity of IRP requirements: items and core

technology retained or revised.

3. Assess other items of potential: economic impact, core

technology considered.

4. Others: feedback on local content requirements. Stakeholders consulted

Consultation Issues (Feb 25 2020-Jan 11 2021)

Turbine Maker(2)Developer(17)Domestic Supplier(56(exc. Repeated ones))

Ø rsted, Taipower,

CIP, Formosa III

(EnBW, JERA,

Macquarie), Chu

Feng Power, TGP,

NPI, innogy, WPD,

EOLFI, ZhongNeng,

Marubeni, Shinfox

Energy, Swancor,

RWE

Industry Association(11)

Siemens Gamesa

Vestas

◆Foundation(21): Century Wind, RongSheng, CTCI, WanChi, SDMS,

CSC group, Century Huaxin, APEX, Fermo, CSBC, CSBC Coating

Solution, ChangMao, BingTsen, YingZhang, BoreYuan, MRY,

Ruentex, LiangLian

◆Onshore Power Facility(7): Star Energy, Fortune, TECO, Shilin

Electric, ChungHsin Electric, GE Taiwan, Allis Electric

◆Turbine Components(23): ChinFong, Century Huaxin, Atech

Composites, Fortune, TECO, Shilin Electric, TienLi, Walsin Lihwa,

TAYA, QST, YGG, Delta, Swancor, ChungHsin Electric, WahLee,

WahHong, Taiwan Glass, YungChi Paint, Jufan, Teng & Associates,

Sinbon Electronics, Wurth, World Known Precision

◆Vessel building(3): CSBC, Lungteh, TCCY

◆Cables(1): TAYA

◆Marine Engineering(8): CWIND, CTCU, DWTek, PDE, TIPC,

IOVTEC, Seagreen Marine Service

Electrical and Electronic

Steel and Iron

Machinery

Composites

Shipbuilding

Electric Wire & Cable

Marine Engineering (3)

TWTIA

ECCT

81 Industry Consultation Sessions

◆ Stakeholders consulted: manufacturers of foundation, onshore power facility, turbine components,

developers, turbine manufacturers and industry associations; a total of 81 consultation sessions

since Feb 25 2020; feedback gathered from 86 suppliers.

◆ 4 public hearings by MOEA to introduce draft Zonal Development plan, draft developer selection

mechanism, and solicit key stakeholder input.

Stakeholder Engagement & Consultation

III. IRP Planning for Zonal Development (1/3)

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Policy Framework of Zonal Development IRP


Goals

Energy Inde-

pendence

Establish an independent

industrial chain

Ensure a stable supply of

renewable energy

Industrial Impact

3GW in 2

years Add

output value of

NTD 264.5bn

Bring

31,836 new

jobs

Asian Hub

Strengthen

c. technologies

01 Developers voluntarily commit to the

realization of IRP.

Approach

02 Continue to develop advanced technologies,

build industrial clusters, promote investment

and create job opportunities.

03 Execution methods: procurement, collaboration

(technology transfer, technology authorization,

commissioned manufacturing, investment (sole

proprietorship, joint venture)

Approach

Approach

Supply

the Asian offshore

wind power

market

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Industrial Relevance Program (IRP) for Zonal Development

IRP

Ite

ms

Retain items of key impact

Optional Collaboration

The policy for Phase II has led to new investments and facilities,

with suppliers developing capacities and technologies. The

categories that saw such impact should be kept as key

development items, which is expected to generate an annual output

valued at 132.2 Bn NT.

Collaboration across turbine-related industries of high potential

(e.g. blade material), and investment in marine engineering

services, engineering design, vessel building are encouraged.

ItemFlexibility

• Items flexibility: e.g. generator → optional items

• Quantity flexibility: key development items implemented to 60%

of the applied capacity (instead of 100%), with the rest 40% for

optional items. (not applicable to marine engineering & design

engineering)


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IV. Conclusion

◼ In planning the IRP, MOEA has convened 81 one-on-one

consultations and gathered feedback from 86 suppliers, in

addition to 4 public hearings held during June 2020 to

July 2021.

◼ For the Zonal Development Round, the Bureau will

continue to facilitate collaboration among developers,

turbine manufacturers, EPCI vendors and domestic

suppliers, to help improve industry capabilities and

enable entry into the APAC market.

◼ With growing global attention to achieving net zero by

2050 and EU’s carbon border tax, President Tsai has

also announced Taiwan’s commitment to reaching net

zero by 2050, which makes it a priority for the OFW

sector to reduce carbon emissions or footprint during

production. Promoting sustainable sourcing and

manufacturing practices, such as use of circular materials

and enhancing energy efficiency, will be future focus.

Thank you for your attention！

Building an Industry: offshore wind in Taiwan

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