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2019 Green Financing Taiwan 台灣綠色融資大會

 

The ECCT's Low Carbon Initiative and the Global Wind Energy Council (GWEC) hosted the Green Financing Taiwan Forum. A forum in which experts discussed some of the financing challenges and opportunities related to the development of wind energy in Taiwan. Among other subjects, they covered Corporate Renewable Power Purchase Agreements, renewable sourcing and financing aspects of power project contract structures.

 

Bart Linssen, Managing Director ENERCON Taiwan and LCI Steering Committee member

Opening remarks were given by Bart Linssen in which he explained that Corporate Renewable Energy Sourcing has the potential to become a major source of financing for wind and other renewable energy sources globally. Meanwhile the success of the community-owned wind farm concept in Europe offers a great example for Taiwan to follow. This allows ordinary citizens to invest in actual wind energy projects and makes them real stakeholders with a vested interest in supporting development while providing sustainable energy and income.

His remarks were followed by GWEC China Director, Li-ming Qiao who made the point that corporate renewable energy sourcing is a global trend that has not yet taken off in Taiwan. For this to happen, and to attract corporate and community investment in renewables, the right regulatory framework, business models and incentives is required.

 

Mark Hutchinson, Vice President, Head of APAC and Renewables, Wood Mackenzie

Mark Hutchinson, Vice President, Head of APAC and Renewables, Wood Mackenzie gave us Global market insights on corporate renewable power purchase agreements (PPAs). He says that deal sizes, will get smaller after the large corporations that are part of the RE100 group, that have pledged to derive all of their energy requirements from renewable sources, have achieved their renewable energy objectives. Until now, technology companies have been the PPA leaders, enabled by their large cashflows and being fortunate to be able to afford to pay for quality rather than prioritising getting the lowest price.

 

(L-R: Dr. Wu Chung-Shu, Chairman of Taiwan Acadamy of Banking and Financing (TABF); Remi Lee, Chief Sustainability Officer of TCI Company Ltd; Sean McDermott, General Manager of Northland Power Taiwan)

The first session of the forum was a panel moderated by Dr. Wu Chung-Shu, Chairman of Taiwan Acadamy of Banking and Financing (TABF). On a question as to whether RECs will be replaced by PPAs, speakers said market prices will fluctuate based on supply and demand and that local governments could set penalties for failure to meet renewable energy requirements, which would help to support the market. In addition, stability can be maintained by setting price floors or other market stability mechanisms.

Sean McDermott, General Manager of Northland Power Taiwan, explained the importance of The Taiwan Renewable Energy Certificate (TREC) market that is being created to allow large users to purchase energy from suppliers. Remi Lee, Chief Sustainability Officer of TCI Company Limited shared the challenges of pursuing and purchasing PPAs through self-supply.

 

(L-R: Dr Lin Tze-luen, Deputy Executive Director and Chief of Energy and Carbon Reduction at Executive Yuan; Michael Wen, Executive VP of Corporate Banking Group, Cathay United Bank; Olivier Rousselet, Country Manager of BNP Paribas Taiwan; Quinton Kong, VP of Macquarie Capital Taiwan; Vincent Wu, Senior VP of Corporate Banking Diviosion, KGI Bank)

The second second session of the forum was a panel discussion moderated by Dr Lin Tze-luen, Deputy Executive Director and Chief of Energy and Carbon Reduction at Executive Yuan. He received panelists from the banking sector to discuss the financing of offshore wind projects in Taiwan.

The panellists noted that in Europe last year €10.3 billion of financing was raised for offshore wind energy capacity. The bulk of this was through limited recourse project financing from a diversified group of lenders including commercial banks, multilateral banks and insurance agencies. Financial institutions can support the process but they need to learn how to evaluate the risks of renewables, including solar, onshore and offshore wind and hydro projects.