Sustainability & CSR

Offshore policy reform is overdue

31 May, 2023

Taiwan's offshore wind development is currently experiencing literal and metaphorical rough sea conditions. Without adapting to the situation and adjusting policies accordingly, there is a risk of a further loss of market confidence and the relinquishing of Taiwan’s position as a trailblazer in the Asia-Pacific region.


By Jason Wang and Raoul Kubitschek

The announcement by a large European utility with a significant global footprint in offshore wind in the late afternoon hours of 12 May 2023 of its reported departure plans from the Taiwanese market to focus on other markets has caused a stir in the offshore wind industry in Taiwan. This decision comes not long after last year’s announcements by two other large developers that they did not participate in the offshore wind Round 3.1 auctions. While one of the leading Asian developers divested from its Round 3 projects, the other, a global leader in offshore wind, is likely awaiting changes to the auction regime before considering further investments in new projects in the market. Most developers and other industry players started as early as the beginning of last year to express their doubts about Taiwan's current offshore wind energy policies. Meanwhile, Taiwan's Bureau of Energy (BOE) has also extended the deadline for the signing of the administrative contract for Zonal Development Round 3.1 from 17 May 2023 to 30 June 2023. This reflects global and local market developments as well as market reports suggesting that at least two developers awarded three projects are reluctant to sign with the current conditions. While the market has seen some positive developments, there are now stronger and stronger signals that there is a need to adjust the auction regime going forward to keep offshore wind developments in line with Taiwan’s 2050 net zero goals.


Has Taiwan reached a turning point in its offshore wind development?

Taiwan is no longer the sole offshore wind energy market in the Asia-Pacific region outside of China, as Japan, South Korea, Australia, Vietnam, and the Philippines are rapidly catching up. Currently, apart from Taiya Renewable Energy, Shinfox and Taipower, the state-owned utility, offshore wind developers in Taiwan are all international players that compare their global portfolios and outlooks constantly. This implies that wind developers will strategically evaluate all potential targets in the global market. As Taiwan enters a zero-bid market, without acceptable returns and higher risk profiles compared to other markets, developers consider factors such as Taiwan's challenging localisation policies, restricted domestic financing conditions, and the geopolitical situation. It is understandable for developers to redirect their limited resources to other markets in the Asia-Pacific region and their home markets. The lack of local developers entering the offshore wind market is also signalling that there are structural issues in the market. After all, compared to Taiwan, South Korea's localisation policy is more encouraging, and Japan incorporates local-friendly and feedback-related factors into its evaluation criteria, without strict localisation requirements, in contrast to Taiwan. Therefore, it is not surprising that developers are reallocating their assets in the Asia-Pacific region. Authorities in Taiwan have shown flexibility in the past and Taiwan is still an active market, which is its strongest argument to turn the tide.


The Taiwan government should seize this opportunity to re-evaluate

Nevertheless, as we discussed in our previous article, Taiwan still has the potential to become a significant hub for offshore wind in the Asia-Pacific region and we are still positive on this prediction. However, the advantage of being the frontrunner is rapidly diminishing. With Taiwan facing a presidential election next year, it should take advantage of the time when developers are announcing their withdrawals and doubts to reassess policy planning and quickly adapt. The overall macro-economic but also local conditions of the original Round 3 zonal development policy have changed dramatically since last year. Not only have various Asian countries accelerated their offshore wind plans, but Taiwan also faces challenges such as insufficient international vessel capacity, high interest rates, and inflation. This means that the cap rates or financial models taken into consideration by the government during the initial planning from the end of 2021 to mid-2022 may no longer align with the current reality. This is also clearly demonstrated in Taipower’s own balance sheet of 2022 and outlook for this year. Since the cost of producing energy has skyrocketed, zero bids or caps of NT$2.49 per kWh are clearly no longer sustainable.

There is a necessity to craft a new offshore wind strategy through the lens of game theory

Global offshore wind energy capacity



2022 installed capacity (GW)

2030 installed capacity targets (GW)










  South Korea











  North- America









If the Taiwan government still wishes to prioritise supporting domestic industries as a key strategy, in addition to considering the strategies of other Asia-Pacific countries, it should also consider the dynamics of other leading economic power houses. For example, US President Biden announced in 2022 that the United States aims to build 30GW of offshore wind capacity by 2030, while Northern European countries declared their targets of reaching 120GW and 300GW of offshore wind power capacity in the North Sea by 2030 and 2050, respectively. Vietnam also recently announced its goal to reach 6GW by 2030.


Does Taiwan still have a strong enough market appeal to surpass these countries or at least to be at the same level? If Taiwan only aims to purchase inexpensive green energy below fossil fuel prices, it may face stagnation in offshore wind due to relatively low returns in the face of high risks brought upon by policy and general regional developments. There is a true danger that this will result in the loss of Taiwan's accumulated offshore wind power talent pool, destroy value created in the market and set back the first green shoots of supply chain competitiveness on the international stage, not to mention that the existing shortage of installed green energy supply will only get worse because of less available capacity for Taiwan’s manufacturing industry to procure.


Therefore, although we face an election early next year in Taiwan, and the uncertainties of politics and policies may make international developers more conservative, it can also serve as an opportunity to redesign new offshore wind policy for Round 3.2 in the coming month(s), support current projects under construction to reduce delays and introduce supportive policies to regain stability in the renewable energy market, and allow Taiwan to continue leading the Asia-Pacific region in offshore wind but also significantly increase the supply of renewables and reduce the reliance on fossil fuels. Propping up the current projects under construction, including backing the financial market to given them confidence to lend to all projects awarded grid in Round 2 will make a strong case in corporate headquarters and create evidence that Taiwan is a safe and stable place to invest. Hopefully, it will also encourage more local developers to start exploring market opportunities in offshore wind power in Taiwan.


Jason Wang is a Senior Economist for NIRAS, a Danish multi-disciplinary engineering company, focused on energy policy and market forecast consultancy for clients and supporting NIRAS’ efforts in Environmental Social and Governance (ESG) offerings in the APAC region.


Raoul Kubitschek has worked in Taiwan’s renewable energy sector since 2008 and is currently the Taiwan Country Manager for NIRAS. He is concurrently Co-Chair of the ECCT’s Energy and Environment committee.

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