Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 269
Offshore Wind Worldwide 2023
In practice, the project company will have
to reach an agreement with the fishermen
association on fishery right compensation
before applying for the EP.
7.4 The Development Assistance Fund
Pursuant to Article 65 of the EB Act, in
February 2018, the MOEA announced
draft Rules on the Usage, Supervision and
Management of Power Development Assistance Funds and its initial proposal on the
contributions to the Power Development
Assistance Fund. On April 16, 2019, the Draft
Usage Rules were finalised and announced
by the MOEA ("DAF Rules"). OWF projects
were initially carved out from the DAF Rules
announced in April 2019, which have been
further amended and confirmed to include
OWF projects pursuant to the amendment
to the "Contribution Rate for the Power
Development Assistance Fund" effective on
May 26, 2022, as well as the amendment to
the DAF Rules announced on June 7, 2022.
According to the DAF Rules, each offshore
wind developer is required to set aside an
amount annually according to a formula based on the volume of electricity generated
by its project in a separate and dedicated
bank account after it commences commercial operation. The fund amounts will
mainly be used to promote local community
development and welfare ("DAF").
Under the DAF Rules, the Development
Assistance Fund for offshore wind projects
should be applied as follows: (i) 70% of the
Development Assistance Fund to be used
as a grant-based fund, of which 15% to
be allocated to local government, 50% to
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the fishermen association, and 35% to the
township (town, city, district) office where
the onshore substation is located, and (ii)
30% of the Development Assistance Fund
to be used as a project-based fund, which
can be drawn upon application by the local
government, township office, farmers’
association, or fishermen’s association of
the city/county/township where the relevant
facilities (e.g., generation facilities, power
lines/cables, substations) are located. Based
on the May 26, 2022 announcement, the
fund contribution rate applicable for OWF
projects is NT$0.018 per kWh.
7.5 The Minimum Purchase Requirement
One of the key drivers for corporates to
enter into CPPAs in Taiwan is the new legal
requirement for certain major electricity
end-users to use a minimum amount of
renewable energy. After the amendments
to the RED Act on May 2019, the MOEA promulgated its subsidiary rule, the Regulations
on the Management of Electricity Consumers with a Certain Contracted Capacity,
and the Obligations to Set up Renewable
Energy Generation Facilities (一定契約容量
以上之電力用戶應設置再生能源發電設備管
理辦法, the "Regulations") on December 31,
2020, which took effect from January 1, 2021.
Pursuant to the Regulations, the end users
subject to the minimum purchase requirement will be those with a contracted capacity of 5,000kW or above ("User(s)"), totaling
about 500 companies in Taiwan. The eligible
Users are required to install 10% of the
regular contracted capacity agreed between
Taipower and the User ("Obligated Installed
Capacity") through installation of renewable
