JERA Co., Inc. ("JERA") has entered into an agreement with Macquarie Capital and Swancor to acquire a combined 32.5% equity interest in the Formosa 1 offshore wind power project, located off the north-western coast of Taiwan. The transaction remains subject to regulatory approvals.
The 128MW Formosa 1 project represents Taiwan’s first utility-scale offshore wind farm. The first phase of 8MW has been successfully operated for over 18 months, with the additional 120MW under construction expected to start operations in late 2019. The project has secured the support of Taiwan Power Company under a 20-year Power Purchase Agreement based on the FIT (Feed in Tariff) scheme.
To date, Macquarie Capital, Swancor and Ørsted have used their knowhow and experience in Europe and Taiwan to develop the project. Macquarie Capital and Swancor will continue as shareholders, and the four shareholders together will focus on achieving to start operations of the first offshore wind farm in Taiwan by the end of 2019.
The offshore wind power business is a mature industry in Europe. However, JERA recognizes that this business is still at an early stage in Asia, including Japan, having much room to develop. JERA also believes that it is able to capitalize on its strength considering its business scale and expertise in conventional power project development.
Through its participation in the Formosa 1 project, JERA will gain knowledge and experience in construction and operation of the offshore wind power generation and leverage this to move forward with projects in Japan and abroad. Associated with this participation, within FY2018, JERA will newly establish an operation base in Taiwan to expand business activity.
The Formosa 1 project, together with the Gunfleet Sands project in the U.K., in which JERA has today also announced its participation, is the first project for JERA to take part in the offshore wind power business.
Renewable energy is expected to be a growth business globally. JERA will seek to enhance its enterprise value and contribute to reducing the environmental load of power generation, through optimizing its portfolio of conventional and renewable power generation assets.