Cathay Life doubles its stake in solar

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JOINT-COMPANY:
The insurance company expects a rate of return of around 5%, as it has formed partnerships to increase the electrical capacity of the solar parks in which it invests.

  • By Kao Shih-ching / Journalist

Cathay Life Insurance Co (國泰 人壽) aims to double its cumulative investment in domestic solar power projects to at least NT $ 20 billion (US $ 716.8 million) by 2025, as the green energy generates high rates of return and the sector’s growth is good for the environment, Cathay Life chairman Liu Shan-chi (劉 上 ounce) said on Saturday.

The life insurer has invested NT $ 10 billion in 250 local photovoltaic farms, including rooftop, ground-based and floating solar systems, with a combined capacity of 200 megawatts (MW).

The company plans to seek other projects in the coming years, increasing the overall capacity of the PV farms it invests in to 400 MW or more by the end of 2025, Liu said.

Photo courtesy of Cathay Financial Holding Co via CNA

Given that the average construction cost of solar power projects is NT $ 50 million per megawatt of capacity, Cathay Life’s cumulative solar investment is expected to total at least NT $ 20 billion by 2025, did he declare.

On Saturday, the life insurer launched a NT $ 5 billion ground-based solar power plant in Mailiao Township (麥 寮) of Yunlin County.

Cathay Life is partnering with Solar Master Energy Co Ltd (開 陽 能源) and San Ching Engineering Co (三井 工程) to invest in the station, which has a targeted capacity of 100 MW.

The three companies have formed a joint venture, CM Energy Co Ltd (開泰 能源), with paid-in capital of NT $ 1 billion. Cathay Life owns a 45% stake, and Solar Master and San Ching hold 30% and 25% respectively, Liu said.

The life insurer said the plant has a capacity of 26 MW and has been connected to the Taiwan Power Co (台電) grid since March.

The station plans to increase the remaining capacity from next year, he added.

As the station is located in an area affected by land subsidence – gradual subsidence or settlement – it took the companies five years to complete preliminary works, such as negotiations with landowners and completion of grading and grading. the stacking of the ground. Solar Master said that 9m piles and an anti-corrosion coating were used in the project due to its peculiar topography.

Although it costs around NT $ 60,000 per kilowatt to build PV systems in areas affected by land subsidence, higher than for ordinary projects, the station is expected to generate an internal rate of return of between 4.5 and 5. percent, greater than a yield less than 3 percent. for the life insurer’s investment in real estate, he said.

When asked if solar power could be sold to private sector companies, Solar Master Chairman Tsai Tsung-jung (蔡宗 融) said the chances would be slim as the partners signed a contract. with Taipower in 2018 to sell electricity for around NT $ 5 per unit.

As the government has reduced feed-in tariffs for solar power since 2018, electricity is more likely to be purchased from other PV projects at lower tariffs, Tsai said.

Cathay Life established Cathay Power Inc (國泰 電 業) to focus on green energy investments, making it the first life insurer in the country to create a utility-related subsidiary.

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