Are Offshore Wind Farms the Answer to Taiwan’s Energy Woes?

Are Offshore Wind Farms the Answer to Taiwan’s Energy Woes?
http://www.wlga.gov.uk/ports-and-offshore-energy-opportunities
What you need to know

Offshore wind has the potential to drive Taiwan’s shift from nuclear and fossil fuels. However, it is unlikely to be a panacea for a carbon-intensive, resource-poor energy system.

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Dependent on a mix of unpopular nuclear and unsustainable fossil fuels, Taiwan’s energy problems are a constant headache for politicians.

President Tsai Ing-wen (蔡英文) acknowledged the issue in her May 20 inauguration speech, saying the country would “monitor and control all sources of pollution” and “gradually adjust our energy options based on the concepts of sustainability.”

Taiwan has committed to phasing out nuclear power by 2025; reducing greenhouse gas emissions to 20% of 2005 levels by 2030; and, in the next decade, to more than doubling renewable-based electricity generation to 10% of supply.

State-run Taiwan Power Co (Taipower) has announced NT$400 billion (US$12 billion) for renewable energy projects over the next 15 years, with most of that earmarked for installing wind turbines off the nation's western coastline. Advisers have recently been selected for the first large-scale project, which is to be located off the coast of Changhua.

Taiwan 'definitely suitable'

Energy expert Huub den Rooijen is the director of energy, minerals and infrastructure at The Crown Estate, which manages state-owned property in the U.K., including the country's entire seabed and half of its foreshore. He was recently in Taiwan discussing the U.K.'s experience in offshore wind with representatives from government and industry, including Taipower.

The U.K. calls itself “the world leader in offshore wind.” In the past 15 years, the U.K. has gone from no offshore wind turbines to having 5% of its electricity supplied by offshore wind, and this figure is expected to double to 10% by 2020. Comparatively, the 5 gigawatts the U.K. already has operating is more than the combined capacity of Taiwan’s Jinshan, Kuosheng and Maanshan nuclear plants.

In an interview with The News Lens International from London, den Rooijen says Taiwan is “definitely suitable” for offshore wind farms. That view is based on the shallow water depths in the Taiwan Strait – of below 50 meters – needed for turbine construction, and an adequate wind resource, as well as key existing infrastructures such as ports, electricity transmission systems and a skilled technical labor force.

Happily for new developers, the costs of offshore wind are heading south. While generation from the U.K.’s early offshore wind farms has cost around £140 a megawatt-hour (US$205), costs for the most recent projects are heading below £120 a megawatt-hour and expected to fall below £100 in the next four years.

A major factor in achieving lower costs, den Rooijen says, is building larger scale projects. He notes the technology is “rapidly evolving” – the latest generation of turbines being installed in the U.K. are 8-megawatt machines, a fourfold increase in capacity from the first, 2-megawatt machines. While Taiwan will not be able to build at the same scale as the U.K. – it lacks the same wind resource and massive shallow seabed area – it should be able to leverage the improvements that have been made over the past decade across technology, construction, finance and maintenance. To that end, a memorandum of understanding has been signed between UK services company RES Offshore, Lloyd’s Register and Taiwan’s Industrial Technology Research Institute (ITRI) for offshore wind collaboration.

Moreover, den Rooijen says there may be new opportunities for Taiwan if it can combine the skills of its high-tech engineering workforce with offshore wind technology. According to the U.K. government, its wider renewable energy industry has created more than one million jobs and is now valued at £117 billion.

Lingering challenges

Questions remain as to how Taiwan’s offshore wind projects will fit into the wider energy system. When the wind doesn’t blow the turbines don’t spin, so wind typically has to work in conjunction with other energy sources rather than simply replace them; doing this effectively will be particularly important if Taiwan is to meet its carbon reduction goals.

den Rooijen says there are three ways to integrate intermittent renewables like wind: in conjunction with "stored" energy, like hydro dams; stand-by generation, like gas or coal plants that can be turned on quickly; or better demand management, where consumers can respond en masse to changes in the generation mix.

Like any major resource development, wind farms have a tendency to create controversy, particularly between developers and local people whose lives are most affected. Taiwan’s recent track record in community engagement is notably poor. Despite being located at sea, offshore wind projects have not been immune from controversy. The key lesson from the U.K., den Rooijen says, has been for developers to engage with all the potential stakeholders as soon as possible. He says while this approach can lead to some delays in the early stages of a project, it saves further cost and trouble in the long run.

Whilst the cost of offshore wind appears to be decreasing significantly, it remains, on a purely economic basis, substantially higher than non-renewable options, like gas, coal and nuclear. In order to incentivize projects, the U.K. government has guaranteed the price for a set period for electricity generated by each offshore wind project. Taiwan is expected to use a similar fixed tariff. Structuring these expensive projects in a way that the financial burden is not sharply felt by consumers will be a challenge. Likewise, of course, will be the alternative – convincing the electorate that higher power prices are needed if Taiwan is to achieve the low carbon future politicians have promised.

Higher prices aside, Taiwan’s carbon reductions goals – reducing greenhouse-gas emissions by 20% by 2030 and 50% by 2050 - remain a difficult proposition. Taiwan is hoping to have three offshore wind farms with a total capacity of 300-megawatts in operation by 2020; that is still much less than the nation's three active nuclear power plants.

As the American Chamber of Commerce in Taipei (AmCham) notes in its 2016 Taiwan White Paper, 78% of Taiwan’s power demand is met by fossil-fuel plants, 17% by nuclear, and 5% by renewable sources. To reach its targets, “Taiwan would have to greatly reduce its reliance on fossil fuels power and greatly increase its capacity for power generation from other energy sources.”

“It is uncertain how that goal can be met while closing nuclear plants, as it appears that a significant portion of the replacement power will have to come from facilities burning fossil fuels,” the report says.

If the U.K. experience is anything to go by, the relatively fast pace construction of large-scale offshore wind farms certainly has the potential to help Taiwan shift towards renewables. However, given the unique challenges Taiwan faces, it is unlikely to be a panacea for the energy-intensive economy highly dependent on fossil fuels and nuclear.