deme │ lessons learned in taiwan2019/02/02 · lessons learned in taiwan tokyo 24/01/2019 2 deme...
TRANSCRIPT
Creating land for the future
DEME │ Building local supply chains:
Lessons learned in Taiwan
Tokyo
24/01/2019
DEME │ CREATING LAND FOR THE FUTURE2
Agenda
Towards efficient,
employment-rich
use of resources
KEY TAKEAWAYS
Challenges and
opportunities
BUILDING LOCAL
SUPPLY CHAINS DEME and its
presence in Taiwan
BACKGROUND
Background
DEME │ CREATING LAND FOR THE FUTURE4
DEME | About us
► Global dredging and marine solutions provider,
headquartered in Antwerp, Belgium
► 150 years of experience in our core business
► 4,500 employees and approx.
EUR 2.4bn annual revenue
► Active in 92 countries
► More than 4,000 successfully completed
projects over the years
► Globally present, thinking locally:
partnership focus
► Pioneer in offshore wind installation
and EPCI projects (since 2001)
DEME │ CREATING LAND FOR THE FUTURE5
DEME | Our activities
Fluvial and
marine
aggregates
Marine
and offshore
solutions
Environmental
solutions
Dredging
and land
reclamation
Marine
infrastructure
solutions
Concessions
and project
finance
Solutions
offered by
the DEME
Group in
Europe
Solutions
offered by
the DEME
Group in Asia
DEME │ CREATING LAND FOR THE FUTURE6
DEME | Our presence in Taiwan
Marine
and offshore
solutions
Dredging
and land
reclamation
► Dredging International Taiwan | 比利時商國際衛浚有限公司executing dredging and reclamation projects in Taiwan since 1995
► Strong partnerships with local contractors and consultants
► Strongest track record among Western marine contractors
Currently executing the Third LNG Terminal Construction Project
for the account of CPC Corporation Taiwan in JV
► CSBC-DEME Wind Engineering Co Ltd | 台船環海風電工程有限公司JV with CSBC Corporation, Taiwan’s largest shipyard with facilities in
Kaohsiung and Keelung
► Local company leveraging DEME’s expertise to offer local-content
compliant OWF EPCI solutions, including DEME and CSBC equipment
► Bridging local content with international standards
Building local supply chains
DEME │ CREATING LAND FOR THE FUTURE8
Competition
Widening supply chains, supporting
new entrants
Identifying and removing entry barriers
Sharing best practices and
lessons learned
Facilitating safety and
sustainability management
Improving local
outreach
Competitive procurement
to increase participation
Local supply chains | General principles
► “You can have it cheap or have it local?”
Competitive and
effective local
procurement
Widening local
supply chains
Spreading
best practice
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Local supply chains | Situation in Taiwan
► Taiwan has no offshore industry and limited marine engineering plant and capability (weather windows,…)
► The Taiwan Government counts on maximum local content in exchange for more generous ‘allocation’ FITs
and relaxes this requirement for FITs arrived at in a competitive auction process.
► Private sector initiative as driver of the process,
supported by Industrial Development Bureau, Bureau of Energy and ITRI (~METI / NEDO)
Key challenges
► Limited private investment capability in key equipment (fabrication lines, floating equipment,…)
► Relative scarcity of skilled local key staff and crew
► Investment framework uncertainty + investment lifecycle uncertainty
► Classical state-driven development strategy (cf. development of Taiwanese key industries),
but without state playing a leading/pioneering role in investment programmes
► Pricing disadvantage when quoting to offshore wind farm developers
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Local supply chains | Short- and long-term bottlenecks
Short-term
bottlenecks
Scarce skilled personnel Scarcity of skilled personnel.
Taiwanese context Unique regulations, language barrier, local customs,..
Investment uncertaintyInvestment decisions in local capacity led by developer
investment appetites, with unclear government way ahead.
Infrastructural shortages Port facilities, fabrication yards, rock supply,...
Local equipment shortages Main and auxiliary vessels.
Long-term
bottlenecks
Future OWF development No clarity yet for developments post-2025.
Policy change risk Evidenced by some developers’ failure to reach PPA.
Future sector developmentUnclear environment for recouping investments ->
Long depreciation schedules, high costs -> spiral
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Local supply chains | Translating industrial strategy
► A leadership role for CDWE?
Under the impulse of the IDB, the Marine Team and Wind Team have been set up by CSBC and China Steel
respectively.
• Bringing together local actors
Bringing together local contractors, suppliers and authorities helps streamline offerings and offers synergies, with
different parties focusing on different service offerings.
Marine (M) TeamMarine contracting Marine engineering plant and (sub-)contracts
Marine support Auxiliary vessels and project support
Wind (W) Team WTG supply chain WTG components, assembly,…
DEME │ CREATING LAND FOR THE FUTURE12
Local supply chains | Structuring local participation
► Structuring local construction participation
CableFDN OSS AUX
► Structuring local fabrication participation
WTG
• Specialist main equipment
(MIV, floating cranes,…)
supplied by DEME or from
overseas suppliers
• Turbine Installation Vessels
may become available locally
• Barges sourced in Taiwan
(CSBC, TIPM,…)
• CLV vessel
investment
announced
locally
• Barges, tugs,
CTV, SOV, survey
launches to be
sourced locally
• Cabotage law
FDN• Large investments in primary and
secondary steel fabrication in
Taiwan by number of players
• Less clarity (yet) on extent and
scope of Taiwanese involvement
• Taiwanese-international
partnerships exist that primarily
market international goods at this
stage
WTG
OSS
Cable
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Local supply chains | Structuring local participation
► Our construction phase ecosystem
CableFDN OSS AUXWTG ServicesSecondary
steel
Consultan
cy
Vessels
Key takeaways: towards
efficient, employment-rich use of resources
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Key takeaways | The Taiwanese experience
Good practice
Supply chain consultation
and involvement
Government-led widening of possible supply chain pool by
creation of local supplier alliances
Clear local content goalpostsClarity on where local content is required (allocation
projects) and where it is optional
Attraction of foreign
partnerships
Foreign OWF developers, contractors and service
providers encouraged to set up Taiwan base and/or
partnerships
Challenges
Low sectoral baselineVery large capacity building investments required from a
generally small-scale private sector
InfrastructureComplicated processes for infrastructure permitting and
development
Unclear policy developmentFIT and PPA, cabotage law evolution,…
may not be beneficial for project elaboration.
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Key takeaways | Taiwan vs. Japan
Market size 5.5GW firm with possible extensions 10GW? by 2030?
Permitting Firm framework
Permitting and consenting ‘participative’
Significant regulatory problems remain
Long EIA cycles, space utilization,…
Industry None at scale (WTG, FDN, cable) World-leading manufacturers, steel mills,…
Marine
equipment
Only small-scale equipment available and
firms present. Local investment plans exist
but hampered by small scale.
Large, skilled marine contractors exist.
Investments ongoing in new equipment
and in existing firms.
Technical
considerations
Taiwan Strait:
Rough working environment, deep waters
Japan has the clear opportunity to develop
floating foundations domestically
Local content
drivers
Government requirements to developers
Future cabotage developments?
Cabotage, presence of industrial players
Possibility for innovation?
Export potential As yet unclear Existing
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Key takeaways | Conclusions
► Creating local supply chains is a function of government policy.
► In Taiwan, through CDWE, DEME espouses a two-prong model:
› Specialist main equipment (huge investment) sourced from DEME fleet
› All other equipment preferentially sourced locally, from MTeam members
› Creating room for local players to test the waters and expand the complexity of their operations
► Japan clearly has the opportunity to mobilise its industrial capacity and innovation to develop highly
domestic-led OWF projects.
► Having local concerns in the supply chain forge partnerships with experienced foreign parties can help
speed up this process and bring down project cost.
► Local parties’ investment appetite is governed by clear and stable policy frameworks with a clear future
development path.
DEME │ Creating land for the future
DEME │ CREATING LAND FOR THE FUTURE
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