Sat.
May 8
2021
Image: Tracy Hopkins via Unsplash

Total will buy into a wind farm under construction off the coast of Taiwan as it pushes ahead with a transition to renewable energy.

The Paris, France-based oil company will acquire a 23% interest in Yulin Holding GmbH, 200 kilometers southwest of Taipei, from offshore wind power developer wpd. The project will have production capacity of 640 megawatts (MW) and is linked to a 20-year guaranteed price power purchase agreement with state utility company Taipower.

Total did not name the price of the deal, only saying that it will pay a consideration to wpd based on past costs. The wind array, which installed its first wind turbine on April 23, will have 80 wind turbines at 8 MW each when completed in 2022.

Total has committed to reducing carbon emissions from both its own business and from the fuel it sells to fight global warming. It has announced that this will involve an asset portfolio shift to natural gas and renewable energy.

The company is following through on the transition in a tricky balance to maintain profitability for shareholders. It spends the second largest percentage of its CAPEX, between 15-20%, on renewables and clean tech investments among major oil companies, according to a report from Raymond James Equity Research that appeared in Platts.

The Taiwan acquisition, which is subject to government approval, will produce enough renewable electricity to power the needs of 605,000 households annually. Total’s portfolio of offshore wind projects under development and construction currently represents a cumulative capacity of about 5.5 gigawatts (GW), including this deal. 

At the end of 2020, Total’s gross power generation capacity worldwide was around 12 GW, including 7 GW of renewable energy. Total seeks 100 GW of gross production capacity from renewables by 2030.

Taiwan’s position as a key area in the development of renewable energy and offshore wind power will be a significant contributor to the goal of generating 20% of its electricity from renewables by 2025 while fostering the emergence of a local wind power industry.

Governments worldwide are also backing wind projects as a way to create domestic industrial jobs. The addition of 470 GW of wind capacity globally forecast through 2025 could create more than 3.3 million jobs, according to a study by the Global Wind Energy Council.

By Stephen Bierman

Stephen Bierman is an energy markets journalist and the editor of New Economy Observer.

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