A number of developers have successively announced their withdrawal from the market, and the uncertainty about whether the wind farms selected in the later period can supply green power as scheduled to meet the needs of enterprises has also increased. The picture shows an offshore wind power model.
In the first two phases of the third phase of offshore wind power block development, the progress of many allocated wind farms has been hindered, and contracts have been terminated or development has been abandoned, highlighting that financing capabilities have become a watershed in whether wind farms can be implemented. It is true that sea space can be re-released and tendered, but the timetable for wind power to come online will inevitably be affected. In addition, a number of developers have successively announced their withdrawal from the market, and the uncertainty about whether the wind farms selected in the later period can supply green power as scheduled to meet the needs of enterprises has also increased.
The five wind farms originally contracted for Phase 3-1 of the block development, except for CIP's Jiaomiao Phase I and SRE's Haisheng (F4), are continuing to advance, the remaining wind farms are facing financing difficulties, stagnant progress, proposals to terminate the contract, or the developer's withdrawal. Issues such as the Taiwan market; similar situations have also occurred in the five wind farms allocated in Phase 3-2. Currently, except for the progress of CIP's Jianmiao Phase II and SRE's Haiguang (F6), which are relatively visible, the remaining wind farms either failed to complete the contract requirements or were terminated.
In the context of the blockage of multiple projects in the first two phases of block development, it is highlighted that financing capabilities have become a watershed for whether the wind farm can advance. Even if the wind farm is allocated capacity, the key to subsequent construction is whether it can obtain a corporate power purchase and sale agreement (CPPA) that is sufficient to support project financing and successfully obtain financing. After the progress of many wind farms in the first two phases was blocked, the bankability of wind farms has become the focus of market attention. The business selection rules for Phase 3-3 have clearly shifted to focus on developers’ performance, financial capabilities and project execution capabilities as the main evaluation items.
For wind farms, obtaining corporate CPPA is an important basis for banks to evaluate project financing. People in the wind power industry bluntly said that as wind farms are built further offshore or in deep water areas in the future, cost pressures including submarine cables, construction and operation and maintenance will increase, and it may be difficult for subsequent green power prices to compare with pre-epidemic levels. However, as the company's RE100 commitment deadline approaches and the demand for green power procurement becomes more urgent, companies' tolerance for green power prices may also increase. For some large-scale technology manufacturing industries with huge capital expenditures, in fact, the increased cost of purchasing green power still accounts for a very limited proportion of overall operations and equipment investment.
Industry insiders say that the construction and supply of offshore wind farms require long-term planning in advance. You cannot wait until there is an urgent need for green power to start purchasing. When companies have an urgent need for green power, the energy supply of completed and operating wind farms will be fixed. By then, even if companies are willing to invest more money, it will not be possible for the wind farm to be completed and powered in the short term.
