NKT Backs Taiwan's First Subsea Power Cable Factory
With Taiwan massively investing in offshore wind energy, the country is set to get its first subsea power cable factory. Danish cable manufacturer NKT has announced that it has agreed to sign a joint venture partnership with the Taiwanese cable company Walsin Lihwa.
Under the joint venture, the two companies will build a factory to produce high and medium-voltage AC power cables, mainly for the growing Taiwanese offshore wind market. The factory is expected to be complete by 2027 and NKT will provide technical support during the construction.
In addition, the deal includes licensing NKT technology to the joint venture. NKT has also said that although it will own a share of the JV, the construction of the factory will not include capital investments from the Danish company. NKT will generate revenue based on a royalty scheme and dividends from the joint venture.
“We expect high growth in the Asian market in the coming decades. Taiwan is targeting to install [an] additional 15 GW of offshore wind by 2035.The joint venture is an attractive opportunity for NKT from a financial perspective and an opportunity for us to participate in a new growing market, which is otherwise challenging to serve,” said NKT President and CEO, Alexander Kara.
The joint venture is also pivotal for Walsin Lihwa, a leading industrial conglomerate publicly listed in Taiwan. Wire and cable is one of its core business segments.
“Taiwan is blessed with abundance of wind resources, presenting vast commercial opportunities in offshore wind power and submarine cable. Walsin is honored to enter into a win-win partnership with NKT, a world class cable solutions provider with leading technology,” commented Yu- Lon Chiao, Chairman of Walsin Lihwa.
In December last year, Taiwan’s Ministry of Economic Affairs finalized the first auction of the Round 3 Zonal Development Phase. Seven offshore wind projects were chosen and will add three gigawatts of new offshore wind capacity expected to come online in 2026 and 2027. The wind farms will be built offshore of Miaoli, Taichung and Changhua in western Taiwan.
The auctions follow a 2021 offshore wind allocation plan released by MOEA for the ten-year period between 2026 and 2035. Construction of a total of 15 GW of new capacity is expected.