NKT backs Taiwan’s first subsea cable factory for offshore wind

It has signed a joint venture agreement for the factory with Walsin Lihwa, through which it will provide its Taiwanese counterpart with technical support, and supply its technology under licence.

The factory in Kaohsiung in the country’s south-west is due to be fully operational from 2027, and will produce high- (HV) and medium-voltage (MV) alternating current (AC) power cables – mainly for the Taiwanese offshore wind market.

NKT explained that it expects this market to “grow rapidly” in the next decade, following a series of gigawatt-scale offshore wind auctions.

The Danish firm will licence its offshore HV AC static export cables and MV AC dynamic inter-array cables to Walsin Lihwa.

It will own 10% of the joint venture, but will not provide capital investment for the factory. It will receive returns based on royalties and dividends. 

Meanwhile, Walsin Lihwa will invest NTD 2.7 billion ($88.8 million) in the factory, it stated. It is as-yet unclear how much the entire factory will cost.

NKT president and CEO, Alexander Kara explained: “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. 

“It is an important first step for NKT to establish presence in the Asian high- and medium-voltage market and a platform for future growth in the region.”

Taiwan was an early mover in offshore wind in Asia Pacific, awarding grid connection rights for 8.5GW of capacity across three rounds. It is due to hold further 3GW rounds this year and next.

Localisation is a key requirement for offshore wind developers seeking to build projects in Taiwan, prompting several western companies to partner with local groups.

The country already has 128MW of operational capacity across two demonstration projects, according to Windpower Intelligence, the research and data division of Windpower Monthly.