∣Angle of Attack∣ The Eminence of Self-Awareness

-∣Angle of Attack∣ The Eminence of Self-Awareness

∣Angle of Attack∣ The Eminence of Self-Awareness

Publish time: 2024-05-17
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I still remember my visit to Citi Field in 2018 for a Mets–Yankees game. Other than the exciting game itself, the most fascinating thing about the stadium is that besides the necessary facilities for baseball games, every last detail is designed to suit the audience’s needs. The bright and spacious restaurants with excellent food, the souvenir stores for the teams, the very spacious aisles, and the bright and clean toilets—a baseball game there is treated like a concert for a superstar, with a strong awareness of consumer needs. It is evident that a huge initial investment was made for such an accomplishment of a professional team, but there is a very clear profit model designed for the entire setup.

In contrast, the recent atrocious Hsinchu Stadium showed that government budgeting agencies often completely neglected that in addition to spending away all the current year's budget, when the public construction is designed to house paying users in the future, the users' needs should be the most important design objective beyond the provision of professional functions. The initial profit plan can only be realized through such decent work, not the empty assumption about how the project will automatically be miraculously successful, and how the users are ready to rain money on it.

Murray Cook, a Major League Baseball consultant who inspected the stadium, stated that the appearance of a stadium is important, but it is more crucial for the facility to never threaten the baseball player’s personnel safety. Unfortunately, now Taiwanese baseball fans are again disappointed by the hideous disgrace, not to mention the Taipei Dome, which has been under construction for decades. Such cases are already sports infrastructures that garner a high level of public interest, yet they resulted in so.

Let us now shift our focus onto the construction of offshore wind power, which much fewer people are paying attention to. The government has been actively promoting the goal of industry localization, and it is only reasonable for one to expect that the Industrial Development Bureau, which has been in charge of Taiwan's industrial development and promoting the localization of the wind power industry for nearly 20 years, to had already gained insight on the capacity of the domestic industry, evaluated Taiwan's capability in the global metal and electromechanical industries, and set up sustainable and feasible goals as well as implementation guidelines. However, by overestimating the professional competitiveness of the state-owned business on the international scene and ignoring the strong advantages of neighboring countries, the government has ironically boosted the competitors quickly obtain supply opportunities to push. The goal of localization has become a dilemma: It must be done, but there is not much chance that things will end well.


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Of course, Taiwan is not the only place where the localization of offshore wind power was attempted. Germany, which highly admires Taiwan, also had similar goals for localization in the early 2000s, and they utilized the power of public utilities to promote Germany's first offshore wind farm project, Alpha Ventus. The project has a total installed capacity of 60MW, with two German wind turbine companies (Repower & Multibrid) each providing six 5MW turbines to promote the first offshore wind project in German waters. The overall project began in 1997 and was approved for construction in 2001, with the Federal Maritime and Hydrographic Agency of Germany (Bundesamt für Seeschifffahrt und Hydrographie, BSH) established as the interdepartmental administrative agency responsible for approving offshore wind power project applications.

The Alpha Ventus project is the first-ever offshore wind power project in Germany, and in 2006, three German power companies jointly invested in a project company, the DOTI (Deutsche Offshore-Testfeld und Infrastruktur GmbH & Co. KG), which can be roughly translated into "German Offshore Wind Power Test Site and Infrastructure Co.", to progress the German offshore wind power pilot project.

Let us take a look at the companies that went through localization. For the two companies that provided the turbines, Repower was acquired by Suzlon and renamed Senvion, and is now under bankruptcy protection, while its existing wind turbine O&M division has been acquired by Siemens Gamesa. The other wind turbine company, Multibrid, was later acquired by Areva and renamed Adwen, which is now also acquired by Siemens Gamesa, but it is no longer developing or offering any wind turbine technology on the market. All 12 wind turbine towers of the project were manufactured by Ambau, which had also filed for bankruptcy protection after struggling with more competitive Asian companies.

For facilities other than the WTGs, OWT, the underwater foundation design company which made the Tripod model used in the Multibrid turbines, has ceased operations. At that time, underwater foundation parts were already being produced in Norway and assembled in the Netherlands, with Eemshaven of Netherlands set as the main working port. The four-legged jacket of the other type of WTGs from Repower was designed by OWEC in Norway and manufactured in Scotland, while the piles were manufactured by EEW in Germany and shipped to a working dock in the Netherlands for construction work.

At that time, one of the vital players was Tennet, which is the company that provided grid integration services with the construction of offshore substations and installations, allowing direct offshore grid integration of the wind farms. This also set the future policy where all German offshore wind farms have offshore substations built by grid companies to provide direct offshore grid integration for each project.

Now, after two decades of development, Germany and other major European offshore wind power countries around the North Sea are leaving the industry up to private companies to decide whether or not they’ll make heavy investments while facing the risks. What the government needs to do, in addition to promoting energy transformation, is to apply a strategy that will consistently reduce the actual costs of offshore wind power generation. Zero-bidding only means that the government does not have to bear the feed-in tariff, but the actual costs of power generation have not been reduced. Rather, the original goal of promoting businesses to purchase green power is now endangered by the significantly rising electricity costs resulting from localization.

Now, entering the zonal development phase, in addition to the Industrial Development Bureau's continued promotion of localization, the public sector banks under the Ministry of Finance are refusing to actively involve in offshore wind power-related lending, not to mention the countless issues requiring communication and coordination with the Ministries of Transportation and Defense. Consequently, the financing and financial viability for wind farms are becoming even more treacherous, and the immense challenge of completing the project on schedule poses another torturous journey under the mechanisms of administrative contracts that stipulate fines.

However, if the various ministries of the government are willing to accept the fact that the current plan has a high chance of failing to meet its target, start tackling the real problems and coordinating across ministries, urge public banks and guarantee institutions to adopt international standards, enabling the government and its public banks to take a more realistic view at the promotion and protection of localization, while allowing the international financial institutions and international governmental import and export guarantee institutions to share the risks, the combination of all such efforts is the only path to make "Taiwan Can Help" a reality, demonstrating Taiwan’s determination in realizing 2050 net zero carbon emissions goals to the rest of the world.

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Scott Hsu

An environment advocate, a pro-international-collaboration industrialist, Scott joined the energy business from the late 90s and shifted to wind energy sector at the early 2000s that he experienced several ups and downs of the international renewable energy market in a various roles in the past. By sharing with words of personal experience as part of the efforts that could transform Taiwan as an indispensable role of international energy transition.



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