Specialist
Former Head at Vena Energy Power Resources Pvt Ltd
Agenda
- Project pipeline update relative to government capacity targets
- CAPEX trends given landed PV (photovoltaic) panel prices
- Project development timelines and emerging solar project types
Questions
1.
In our previous Interview [see Taiwan Solar Energy – Project CAPEX & Development Process Mapping – 22 October 2020], you had doubts or a bearish outlook for Taiwan’s ability to meet the government’s 2025 capacity target. Has your outlook changed?
2.
How much higher would the capacity run rate growth have to be to meet the 2025 target, given capacity installations’ average historic run rates?
3.
Do you believe the level of capacity installation you outlined could materialise? Are you noticing developers getting aggressive with project development or is development still at the same pace?
4.
What’s the likely rationale for the hybrid solar programme being pushed? Would this be attractive to local developers, if not international ones?
5.
What would need to change about the regulatory environment or the industry to push the required 3-4GW installations to meet the 2025 10GW target?
6.
Would the FIT [feed-in tariff] potentially staying the same in 2022 be purely due to input costs going up or would it be a sign from the government that it might consider being looser on the industry and try and push more project installations?
7.
Has there been an update on the industry average capital cost per megawatt for a ground-mounted utility scale project, given the changes in panel prices from China?
8.
How has CAPEX trended for rooftop and floating solar projects?
9.
You referenced raw materials and raw input costs inflating recently. To what degree have they inflated and do you expect the issue to get worse, given supply chains are still dislocated and the general global inflation?
10.
Do you expect the trend of panel prices going down to continue post-coronavirus?
11.
Do developers or panel manufacturers have bargaining power in negotiations, considering the competitiveness of China’s panel manufacturing market?
12.
How would you compare the landed cost of domestically produced panels vs imported modules from China, which I assume is the bulk of the market?
13.
You said a main module from China can’t be used in Taiwan. Is that a major cost pressure for project owners, considering the cost benefit if they could import from China?
14.
How would you compare the pricing between domestic modules and modules from Southeast Asian countries, such as Vietnam or Malaysia?
15.
How would you compare the operating efficiency of domestically produced modules against that of imported modules from Southeast Asia?
16.
Why is the efficiency of Taiwan’s modules lagging? Is the domestic manufacturing capacity still too small scale or is it a technology issue?
17.
Have you noticed any other cost pressures related to components or key project cost contributors, besides pressures from raw materials and modules?
18.
What is the steel intensity per megawatt for a ground-mounted utility-scale project?
19.
How might the CAPEX per megawatt fluctuate across different project types – ground-mounted, utility scale, rooftop and floating – over the next 12 months?
20.
Do you expect project capital costs to continue declining at the same historical rate or is the medium-to long-term capital cost decline more likely to be steady, with lower declines per year?
21.
What’s your outlook for domestic panel production growth, given certain companies are starting to build out additional production capacity in Taiwan?
22.
Is there any incentive for project developers to integrate downstream and build their own in-house panel manufacturing capacity or do you not think that?
23.
I understand the FIT rate decreased by about 8% for ground-mounted utility-scale PV [photovoltaic] projects in the FIT’s most recent iteration. Has there been a major impact on project returns since we last spoke or is the FIT’s drop commensurate and equal to the drop in project costs?
24.
Is there anything around financing costs that might support a higher-equity IRR? Do you expect local financiers to be more open to funding projects relative to when we last spoke, thereby bringing costs down?
25.
Is getting a project banked by a local financier a difficult process? Even if the financing costs come down locally, I’m curious about project owners’ process for securing project financing from local banks and institutions.
26.
Which local institutions that have been lending to solar project owners have been the most forthcoming with financing projects? Do they only fund local developers or are they also open to funding international developers?
27.
Have you noticed a preference for developers to borrow from local institutions more than international ones? You said you consider the process of securing financing from local banks and institutions more streamlined than dealing with international banks.
28.
Which projects – ground-mounted vs rooftop vs floating – might have the most attractive returns profile in the future, considering how the FIT programme might change?
29.
Would you say the project delivery timeline is still averaging around 1-2 years or have there been changes in the development process since we last spoke?
30.
What is the biggest sticking point for project developers in the development cycle?
31.
The government has a newer initiative to introduce hybrid projects. In a tender for a project that combines solar and another activity such as farming, would you say the regulatory or development process is more
favourable due to the government pushing this project type?
32.
Does it matter for project returns what the other activity is with a hybrid project? Does solar plus farming or another industrial activity make a difference?
33.
Have certain developers targeted the hybrid project type more aggressively or is everyone bidding for these projects? How attractive has this new project type been for different developers?
34.
Would you say the competitive dynamics of Taiwan’s solar industry are fragmented? Is it consolidated or otherwise concentrated? How do you assess the level of competition?
35.
Taiwan’s total solar capacity is unlikely to hit the government’s 2025 target. How might the government’s behaviour change? How might it change regulations or anything else to adjust the target or incentivise that last gap?
