Taipei, Nov. 10 (CNA) The Ministry of Economic Affairs said on Friday that the final rules for round 3-2 of the offshore wind zonal development auction tendering process will be released shortly following the second public hearing held that day to solicit opinions and questions.
The round 3-2 (second phase of the third stage) zonal development auction is a new round that places 3GW of capacity up for tender in 2024, after five developers won tenders in the 3-1 round auction and started the administrative contract signing process for a total of 2,335MW at the end of August.
Since the third stage (zonal development) in Taiwan’s offshore wind policy started, the most debated element of the tendering process has been the local content requirements, aiming to stimulate the utilization of domestic inputs, also called the industrial relevance program (IRP) policy.
The first stage of pilot projects and second stage of potential site development projects had no or less stringent local content requirements.
In round 3-1 (first phase of third stage) developers were required to locally source 60 percent of designated 25 key items in five categories – electricity facilities, underwater foundation, turbine components, maritime engineering services, and engineering design services.
The first hearing, that called for opinions for round 3-2 tender rules, took place in September and introduced a more flexible policy for fulfilling IRP, involving a minimum score of 70 out of 100 over 21 items.
These items encompasses various aspects such as underwater foundation assembly, nacelle manufacturing, turbine components and assembly, cables, engineering design service etc, each carrying assigned points.
The increased flexibility was said to lie in the fact that developers were given room to choose from a range of items and determine the optimal points allocation, “like a buffet,” according to Industrial Development Administration head Lien Ching-chang (連錦漳).
However, after the draft proposal was made public in September, many developers complained that it was still too rigid. In addition, local suppliers, especially marine engineering service providers, also protested as they were excluded from the IRP of round 3-1.
In response, the revised proposal at the second hearing on Friday included an increase in available IRP items to 24, with marine engineering services included and the total points available to fulfill the IRP raised to 115, but the minimum requirement of 70 remains in place.
Deputy Minister of Economic Affairs Tseng Wen-sheng (曾文生) said in an online interview on Wednesday that the localization policy is aimed at upgrading Taiwan’s energy independence and autonomy, but stressed it is an interim policy that will be gradually phased out.
“The government’s energy industrial policy has stages. In the end [the local suppliers] will have to face international competition,” Tseng said, calling on the suppliers to enhance their competitiveness.
For example, Siemens Gamesa and Vestas, the world’s leading turbine manufacturers, have indicated a willingness to invest in Taiwan for part of their work, such as turbine assembly, which means there is comparative advantage for them to do so locally.
“There is always the issue of ‘give and take’ when we court foreign businesses and ask them to make a certain level of local investment; this is always a process of trying to strike a balance,” the deputy minister said.
