Offshore wind developers reject Taiwan's planned feed-in tariff cut

It proposed to cut the rate by 12.71% for 2019.

Taiwan’s Ministry of Economic Affairs (MOEA) mulls cutting the feed-in tariff rate for offshore wind power projects by 12.71% for 2019, however, it was met with rejection from investors, Focus Taiwan reports.

MOEA proposed to slash the FIT rate from 18.9 cents (NT$5.8) per kWh to 17 cents (NT$5.1). In response, a joint statement by wind developers including Yushan Energy, Northland Power, Copenhagen Infrastructure Partners (CIP), and WPD Taiwan Energy Co. called this “unacceptable.”

The companies argued that MOEA had promised a rate of 19 cents (NT$6) per kWh, and changing this would negatively affect Taiwan’s investment reputation. Moreover, the new FIT rate would only apply to 3,600 hours of power sold (with the rest priced at 6 cents) and consequently undermine the platform for developers.

However, Taiwan’s Central News Agency reported that when MOEA asked businesses to offer information on their power generation operations when the new rate was being assessed, only two companies did so.

Economic affairs minister Shen Jong-chin said he again asked the companies to provide detailed evidence to back up their argument to keep the existing rate next year. Moreover, the rate is not final and will still be reviewed by the FIT rate review committee.

Governments in the Asia Pacific are gradually withdrawing incentives for developers such as subsidies, favourable feed-in-tariffs, and generous tax and accounting treatment, Fitch Ratings said in a report. It cited improving economics in the sector as the region shifts towards renewables.