World’s Largest Renewable Energy Corporate Power Purchase Agreement Signed in Taiwan
Taiwan-based TSMC signed a corporate power purchase agreement (CPPA) with Ørsted for the Greater Changhua 2b & 4 offshore wind farm on 8 July. TSMC will offtake the full production from the 920 MW wind farm, making this the largest-ever contract of its kind within renewable energy, according to Ørsted.
The contract has been signed with a fixed-price and will be in effect for 20 years, from the moment the project enters commercial operation in 2025/2026.
The start of commercial operation is subject to grid availability and Ørsted’s final investment decision, the developer added. The final investment decision for the project is expected to be reached in 2023.
Ørsted won the rights to build the Greater Changhua 2b & 4 offshore wind project at Taiwan’s auction in June 2018 with a winning bid price of TWD 2,548 per MWh (approximately EUR 72.3 per MWh).
Under the 20-year power purchase agreement with Taiwan’s semiconductor company TSMC, the Greater Changhua 2b & 4 offshore wind farm will receive a price for power including T-RECs (Taiwan renewable energy certificate) that is higher than the feed-in-tariff originally secured at the offshore wind auction in June 2018.
“This improves the project’s financial viability and helps Ørsted mature Greater Changhua 2b & 4 towards a final investment decision”, the developer said.
The Greater Changhua 2b & 4 project site is located in the Taiwan Strait, some 50 kilometres off the coast of Changhua County.
The offshore wind farm will be adjacent to the 900 MW Greater Changhua 1 & 2a, which Ørsted is currently constructing and for which it won the development rights at Taiwan’s offshore wind auction in April 2018.
Greater Changhua 2b & 4 is the developer’s third offshore wind farm in Taiwan, as Ørsted is also the co-owner of Taiwan’s first commercial-scale offshore wind farm, the 128 MW Formosa 1. Formosa 1 has been fully operational since January 2020.