TAIPEI (Taiwan News) — The Ministry of Economic Affairs (MOEA) proposed a new administrative agreement with wind farm developers on Friday (Nov. 4), creating a strong backlash from developers, who called it "unfair."
The proposed administrative agreement with wind farm developers is being touted as a solution to the perennial problem of delays for offshore wind turbine construction projects. A fine would be imposed on developers if they fail to meet the construction completion deadline.
Yu Cheng-wei (游振偉), Director General of the Bureau of Energy under the MOEA, told UDN the fine is intended to give developers an incentive to complete construction on time. "If there are no delays, they do not have to worry about the penalty."
Several representatives of the developers were quoted as saying the problem of delays should be solved collectively, between government agencies and the companies, rather than one-sidedly.
Sources familiar with the matter told Taiwan News that foreign developers have been under tremendous pressure from local interest groups and politicians. As part of the deal to get work done, developers need to allocate more budget in support of local employment opportunities and provide ever-increasing benefits for residents living near the construction sites. This all adds to the operating costs.
In the same UDN report, a developer complained the new agreement would make it harder to raise sustainable financing from banks due to the increased risks that face developers if they sign the proposed agreement.
Marina Hsu (許乃文), managing director of Copenhagen Infrastructure Partners (CIP), disagreed with the proposed administrative contract, saying developers do not want to see delays as banks also usually stipulate work has to be completed on time. The addition of a penalty against developers in the contract would raise operating risks, make loan applications less favorable, and increase uncertainty regarding offshore wind farm construction, she added.
