Announcement of Mechanism for Offshore Wind Zonal Development Stage 2 Auction

　　Since September 27, 112 (2023), the Ministry of Economic Affairs (MOEA) has conducted several sessions to elucidate the offshore wind zonal development contract (draft) and sought opinions from various sectors. The MOEA announced the "Offshore Wind Power Zonal Development Site Capacity Allocation Guidelines" today (23) for the zonal development stage 2 auction, presenting flexible approaches to ensure the timely and high-quality completion and commercialization of all future wind farm development projects.

　　The adjustments made in the zonal development stage 2 auction mechanism include providing different capacity limits in sequential order. The maximum allocated capacity reaches 900MW. Applicants with identical shareholders merge applications from diverse wind farms into a singular proposal, but this must adhere to 3 principles ensuring the optimal utilization of maritime space:

1. The Industrial Relevance Plan and quantities are now at the discretion of the developer through a self-selected model, totaling 24 items. Though the passing score remains at 70 points, the overall score has been elevated to 120 points. Additionally, adjustments have been made to the allocation of items such as the use of domestic (Taiwan) primary construction vessels, operation and maintenance technology, environmental monitoring services during the operational period, and engineering design services. If the choice is made to utilize domestic primary construction vessels, the submission should include the "Preferred Supply Agreement" If unable to meet the committed allocation, a specific point supplementation plan must be provided, along with a commitment to provide a formal commercial contract within 6 months after the signing of the administrative contract.

2. The administrative contract incorporates a mechanism allowing for "conditional flexibility in granting one year for grid connection" and associated extension conditions. Subject to two requirements:
　　(a) Completion of the first wind turbine nacelle and blade production, as outlined in the proposed Industrial Relevance Plan, within the first quarter of the grid connection completion year.
　　(b) Completion of the foundation installation for all wind turbine units before the selected grid connection completion date.
To address the issue of inadequate capacity of construction vessels both domestically and abroad, it is proposed to categorize this as an uncontrollable/unattributable circumstance. A new flexible mechanism involves the staggered payment of the performance bond. Prior to applying to execute the administrative contract, a minimum of 50% of the performance bond is required, while the remainder can be paid within 12 months after signing the administrative contract or within 1 month after project financing is secured.

3. Furthermore, developers are mandated in the action phase to provide evidence of signing Letters of Intent (LOI) for power purchases with two or more enterprise groups. This documentation qualifies them for an extra 100MW capacity. The formal CPPA should submit the relevant documents within 18 months after signing the administrative contract or within 1 month after securing financing.

　　Supplementary information from the MOEA outlines that Zonal Development Stage 2 incorporates a flexible approach for developers in completing grid connections. This adaptation considers developers' suggestions for an extended pre-bidding period, enabling thorough utilization of the upcoming Weather Window for offshore surveying activities. Regarding the subsequent actions' scheduling, the auction submission deadline is revised to April 2024, with the announcement of the phase 2 auction results anticipated in May 2024.

Source: The government website of the Ministry of Economic Affairs