[Event Report] ECCT-GWEC Global Offshore Wind Summit – Taiwan Hybrid 2021 全球離岸風電產業高峰會-台灣 線上論壇
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The ECCT, in partnership with the Global Wind Energy Council (GWEC), hosted the 2021 Global Offshore Wind Energy Summit -Taiwan (GOWST) 2021. Held for the third consecutive year in a hybrid format and arranged by the ECCT's Low Carbon Initiative (LCI), the summit was co-organised by the Taiwan International Ports Corporation (TIPC) and attended by over 100 people in person and an over 1,400 online. The event began with opening remarks by Sheng Jong-chin, Vice Premier of Executive Yuan (沈榮津 中華民國行政院副院長); Wang Mei-hua, Minister of the Ministry of Economic Affairs (王美花 中華民國經濟部部長); Chi Wen-jong, Deputy Minister of Ministry of Transportation and Communications (MOTC, 祁文中 中華民國交通部常務次長), ECCT Vice Chairman Giuseppe Izzo and GWEC CEO Ben Backwell.
Sheng Jong-chin, Vice Premier of Executive Yuan (沈榮津 中華民國行政院副院長)
Wang Mei-hua, Minister of the Ministry of Economic Affairs (王美花 中華民國經濟部部長)
ECCT Vice Chairman Giuseppe Izzo (尹容 歐洲在臺商務協會副理事長)
Chi Wen-jong, Deputy Minister of Ministry of Transportation and Communications (MOTC, 祁文中 中華民國交通部常務次長)
GWEC CEO Ben Backwell (班˙柏克威爾 全球風能理事會執行長)
This was followed by a high-level offshore wind development forum featuring nine industry leaders and government officials to discuss the future challenges and opportunities for offshore wind energy development in Taiwan. This was followed by sessions on regional supply chain developments in the Asia Pacific region, upscaling port infrastructure in Taiwan, and generating renewable hydrogen from offshore wind.
Session 1: High level offshore wind development forum
The panel discussion was moderated by Maya Malik, Senior Advisor of the Global Offshore Wind Task Force at GWEC. It began with updates from government officials.
High level offshore wind development forum
Yu Cheng-wei, Director-General of the Bureau of Energy (BOE) at the Ministry of Economic Affairs (MOEA) (游振偉 經濟部能源局局長) gave an update on conditions, development, and prospects for offshore wind in Taiwan. He noted that Taipower's project is now in the testing phase and will enter operation by end of 2021. He said that local content requirements in Round 3 had been revised from their original form to add more flexibility in terms of mandatory and optional items. Each wind farm will have an upper capacity limit of 600MW. He said that when deciding areas to set aside for wind farms, authorities took into account the habitats of wild dolphins. According to Yu, a single joint review process incorporates feedback from other government agencies, which is aimed at making the process more efficient. The BOE will monitor the performance of wind farms in all phases of development and from 2032-2035 authorities will take into account technological advances and give more flexibility to developers.
Yang Chih-ching, Deputy Director-General of the Industrial Development Bureau (IDB) (楊志清 經濟部工業局副局長) at the MOEA said that there had been several rounds of consultations ahead of making decisions on local content based on supplier capabilities and several foreign investors are producing components in Taiwan. Authorities are working on upgrading in infrastructure in ports and developing talent. The mechanism for Round 3 zonal development has not yet been finalised and it may be adjusted based on progress and feedback from stakeholders. He added that pandemic had been a setback to development, but that authorities will work hard to catch up.
TIPC Chairman Lee Hsien-yi (李賢義 臺灣港務公司董事長) gave short remarks and a video presentation of port development plans while Liu Chih-hung, Deputy Director General, Maritime Port Bureau, MOTC (劉志鴻 交通部航港局副局長) gave a presentation on his bureau's plan for offshore wind power. He stressed the importance of sailor management and vessel navigation safety. While it is difficult to find local sailors, authorities are addressing this through training programmes. Vessel development is also subject to local content requirements.
Alex Robertson, Vice President & General Manager of Vestas Taiwan said that some suppliers are doing well on localisation, achieving in a few years what took decades in Europe. However, there are still challenges to overcome. For example, the enormous size of new turbine blades will require a new approach to localisation that leverages the competitive strengths of Taiwan. He noted that while Taiwan is currently leading in offshore wind in the region, Japan and South Korea are also now offering subsidies and financial support in an effort to catch up. To keep its leadership position, Taiwan will need to have a competitive local supply chain and to upgrade its ports.
Tseng Wei-wei, Board Member and Director of wpd Taiwan spoke about what her company has done in recent years. She said that experience in localisation had been gained in working with local companies and this can be built upon in Round 3. She noted that thousands of experts, technicians, and other personnel have to be brought into Taiwan for the offshore build out and this has been hampered by border controls imposed during the pandemic. Supply chain disruptions caused by the pandemic also affected the supply of components.
Christy Wang, General Manager of Ørsted Taiwan (汪欣潔 沃旭能源臺灣區總經理) noted that green energy will play a key role in Taiwan's path to net zero and the company has accumulated experience. Other countries are paying attention to Taiwan. Local supply chain development has been a steep learning curve. Local companies invested time and effort to reach global quality standards. Those that succeed will be able to compete in the regional market. However, it remains a challenge to meet localisation requirements while adjusting to changing technologies will bring additional challenges and a new learning curve. In addition, wharfs, bridges, and other infrastructure will need to be upgraded in Taiwan's ports and more training will be needed to develop talent, such as professional technicians.
Niels Steenberg, Chairman and Managing Director of Siemens Gamesa said that his company had expanded significantly from when the office was set up office in 2017. From just five people, initially, it now has 250 employees, and the scope has changed from a sales office to a nacelle assembly facility and other services. The next logical step is to create a localised supply chain that can complete globally. The company's nacelle factory was the only one completed on time, despite the pandemic. Steenberg is therefore confident that Taiwan has the potential to become an export hub. However, the main challenges are meeting local content requirements in Round 3, especially when the scale of projects is still small, and the need for upgrades to Taichung Port.
Marina Hsu, Managing Director of CiP Taiwan (許乃文 哥本哈根風能開發公司董事總經理) said that her firm's wind farms are leaders in localisation performance. Thanks to its success, it is working with its local partners to explore regional business opportunities. However, meeting Round 3 requirements will present additional challenges. To overcome them will require public private partnerships to achieve workable solutions. Nevertheless, she is very optimistic about the Taiwan market, saying that Round 2 suppliers have made progress and have the potential to become competitive in Round 3.
L-R: GWEC Senior Adviser Maya Malik, Vestas Taiwan VP & GM Alex Robertson, Ørsted Taiwan GM Christy Wang, wpd Board Member and Director Weiwei Tseng, BOE Director-General Yu Cheng-Wei, IDB Deputy DG Yang Chih Ching, TIPC Chairman Lee Hsien-Yi, SGRE Chairman & MD Niels Steenberg, CiP MD Marina Hsu, MPB Deputy DG Liu Chih-hung
After the opening remarks, the moderator proceeded with a Q&A discussion.
Panellists acknowledged that border controls, particularly since the imposition of level 3 restrictions in mid-May had disrupted the peak summer season offshore wind farm construction process. While panellists expressed gratitude to the government for working to find work-around solutions to bring in personnel, the process took several months and very few of the thousands of experts and technicians needed for the offshore wind farm build-out were able to enter Taiwan in the period from June to September. Now that we are about to enter the late Autumn and Winter season, the window for construction is about to close. In addition, those who were already in Taiwan were put under tremendous pressure given strict quarantine requirements. It is hoped that pandemic conditions will improve to allow construction efforts to resume in 2022.
Another problem facing future development is that there is likely to be a limited number of working vessels. Even with an optimised schedule for use, this is likely to delay work.
On a question about localisation, panellists said that while it makes sense to localise, making it economically viable takes time and investment, especially given the large size of towers and foundations. Since foundations, for example, weigh more than 1,200 tonnes, it took about three years to get the production and engineering right. Meanwhile, installing underwater foundations is difficult because of a shortage of qualified welders. Gaining the necessary technical and project management experience takes time.
Panellists noted that significant investment is needed in harbours. Decisions will need to be made soon in three main areas: pre-assembly operations in harbours, bridges in onshore areas of harbours and getting harbours ready for building platforms for floating wind turbines.
TIPC Chairman Lee noted that TIPC is working on addressing these issues, including expanding the area of wharfs, reviewing the safety of bridges, and bearing capacity and bottlenecks. For example, TIPC is considering adding a third bridge.
Panellists noted that pandemic related delays had not been anticipated. For example, waiting times of up to a week to unload components in Taichung were caused by congestion and a lack of facilities. Because of delays this year, future projects will have to be compressed. Instead of two projects, four projects will have to be completed in the same length of time.
Panellists noted that a lot of investments will be needed by local suppliers if they are to expand their capacity sufficiently to become economically viable and competitive. While a number of local suppliers are willing to expand and take risks, some suppliers have not received enough orders to get up and running. Authorities should take into consideration that the pressure on small suppliers may become unbearable it they don't have enough orders to reduce costs fast enough.
On the subject of floating wind, Yu Cheng-wei said that the BOE would monitor developments in Europe closely, particularly demonstration farms in Europe to see the new technologies and requirements that will be needed for infrastructure.
Session 2: Regional update session - Developments in offshore wind energy in Asia
Moderator: Qiao Liming, Head of GWEC Asia
Regional update session panel discussion: Sanjeet Sanghera, Global Head of BloombergNEF; Jin Kato, President of Japan Wind Power Association (JWPA); Qiao Liming, Head of GWEC Asia; Choi Woojin, Vice Chairman of Korea Wind Energy Association (KWEIA)
In his presentation Jin Kato, President of Japan Wind Power Association (JWPA) gave an update on Japan's wind energy development. He noted that Japan has significantly raised its targets for offshore wind. 12 sea areas have been designated and a centralised bidding system has been set up as well as plans to construct transmission lines. Port construction to meet wind energy needs is underway at four ports.
In his presentation, Choi Woojin, Vice Chairman of Korea Wind Energy Association (KWEIA) introduced the Korean offshore wind market. Korea has upped its carbon reduction targets to 40% below 2018 levels by 2030 and increased renewables from 20% to 30.2% of capacity by 2030. 40GW of offshore wind capacity is being developed or planned. The strong shipbuilding industry puts Korea in a good position to develop floating offshore wind farms.
In his Sanjeet Sanghera Global Head of BloombergNEF gave an outlook for Asia's offshore wind market. He said that Asia is expected to surpass Europe by 2025 in offshore wind energy. The largest capacity is expected to be in China, followed by Taiwan. He noted that although Vietnam has a long coastline, development may be hampered by grid capacity.
Session 2 panel discussion
On a question about the potential for regional collaboration, Jin Kato said that in the initial stage of development, countries are likely to develop on their own, but cooperation may be possible later. Woojin Choi said it is not realistic to reach targets if every country builds the entire supply chain. Local content requirements are being driven by political pressure, but regional collaboration is the only way to reach carbon reduction targets. Sanjeet Sanghera concurred that it will be hard to reach targets and cost reductions without regional cooperation. This will be exacerbated by the global commodity super cycle. Cooperation could even be expanded to grid. In the end, if all countries go it alone, some will be successful, but others will not.
Session 3: Upscaling Taiwan's port infrastructure for offshore wind
In his presentation, Chung Ying-feng, Vice President of TIPC (鍾英鳳 臺灣港務公司業務副總經理), spoke about port infrastructure plans. The Maritime Ports Bureau (MPB) is responsible for planning navigation routes. Ports will be included as part of government's net zero plans. By 2025, the capacity of ports will need to be expanded in line with wind farm construction. TIPC is preparing for capacity of 1.5GW per year after 2025 and expanding land area to provide space for turbine preassembly, foundation storage and turbine manufacturing. Additional quays will be needed to handle heavy loads. The pandemic has disrupted work and caused backlogs. It takes about three years to develop the kinds of quays needed. He went on to give details of development plans for different areas of Taichung Port. He also introduced local talent training centre in Taichung which will be used to train talent for Taiwan and the region.
Jasper Bank, CCO of Port Esbjerg explained how to upscale a small port from experience developed over 20 years. Esbjerg port runs other services including car exports and meets the needs of 1.2GW of wind farm capacity per year. The port relies on private investment to finance expansion. It began as a fishing port and still had this capacity until 2007. Then, since 1972, it catered to the offshore oil and gas industry and started offering offshore wind services in 2000. The loss of jobs from fishing and oil and gas is anticipated to be offset by wind energy. Since 2000, 55 projects have installed 4,200 turbines with 21GW of capacity. This is rising by 1.5GW per year and will increase to up to 3GW per year over the next few years. A distance of up to 500km is regarded as the port's near market but it also exports components to southern Europe and Asia.
Chung Ying-feng, Vice President of TIPC (鍾英鳳 臺灣港務公司業務副總經理); Jasper Bank, CCO of Port Esbjerg; Norbert Heidelmann, TÜV Rheinland's Hydrogen Technology Competence Centre; Andrew Ho, Head of Government and Regulatory Affairs, New Markets of Ørsted Asia-Pacific
In terms of challenges, having too few projects is a problem for ports because a steady pipeline is needed to justify and provide returns on investments. Changing technologies also make it difficult to provide the right infrastructure. In addition, rapid cost reductions leave little room for returns on investments. Bank stressed the importance of planning ahead in terms of infrastructure and financing. In particular, the constant scaling up in the size of turbines, needs to be met by larger cranes and vessels, storage capacity, and deeper ports. He recommended leaving large empty spaces on wharfs to allow for storage of large turbines and equipment and constructing buildings further away from the shore.
Session 4: Renewable hydrogen by wind
In his presentation, Andrew Ho, Head of Government and Regulatory Affairs, New Markets of Ørsted Asia-Pacific gave a presentation on green hydrogen developments with a reference to European markets. While green hydrogen is only a very small part of Ørsted's business, it will play an important role in the future energy system, particularly for parts of the economy which can't be electrified. There remain problems to overcome, including scaling up the production of electrolysers needed for producing green hydrogen. The UK is talking about business models for renewable hydrogen while the Danish energy agency has done something similar. Meanwhile the EU is providing support to spur the development of green hydrogen. One of the potential areas for the use of green hydrogen is the steel-making process.
Since there are different ways to produce, transport, store and use hydrogen, Taiwan will need to choose the most optimal permutations to suit Taiwan's conditions. Ho recommended public private dialogue and roadmap to drive investments in green hydrogen.
There will be a cost gap in producing green hydrogen and challenging to scale up to get costs down and serial production of hydrolysers and the way energy is used. Ho introduced his company's early demonstration and trial projects. Ørsted has about 10 projects in the works and now in trial phase of how to combine offshore wind to produce green hydrogen.
In his presentation, Norbert Heidelmann from TÜV Rheinland's Hydrogen Technology Competence Centre, spoke about green hydrogen certification in Europe. He noted that many countries are now actively developing green hydrogen. As part of its decarbonisation goals, the EU has set targets of reaching capacity of 6GW of renewable electrolysers and up to 40GW or 10 million tonnes of renewable hydrogen. To support development, the EU is offering financial support of between €180 and €470 billion by 2050. National legislation and support will follow EU directives. The German government, for example, is offering funding for various projects, including the production of electrolysers, production of green hydrogen through wind energy and for hydrogen in transport.
TÜV Rheinland provides certification for green hydrogen for every stage of the life cycle. Additional certification for green hydrogen or blue hydrogen (produced from fossil fuels but using capture and storage so that no carbon is emitted). Certification also extends to whole value chain of technologies to produce hydrogen.
ECCT CEO Freddie Höglund (歐洲商會何飛逸執行長)
The summit was concluded with closing remarks by ECCT CEO Freddie Höglund and GWEC CEO Ben Backwell.
VIP dinner with ECCT CEO Freddie Höglund, Minister of the Ministry of Economic Affairs Wang Mei-hua, ECCT Vice Chairman Giuseppe Izzo, Vice Premier of Executive Yuan Sheng Jong-chin
VIP dinner group photo
VIP dinner with Vice Premier of Executive Yuan Sheng Jong-chin, ECCT Vice Chairman Giuseppe Izzo and guests of honour