Sustainability & CSR
Taiwan's energy transition outlook for 2025
2025 marks the first major ‘milestone’ for Taiwan’s energy transition, with the original goal of 20% renewable generation by the end of the year. With 11.1% renewable generation achieved as of November 2024, this goal has clearly been missed. Delayed progress combined with a dwindling renewable pipeline in 2025 further jeopardises Taiwan’s 2030 energy goals and its 2050 net zero commitment. Despite progress made since 2016, Taiwan’s energy transition risks further derailment as rollout for the crucial solar photovoltaic (PV) and offshore wind sectors continue to miss targets. Simultaneously, the lack of mobilising social capital for the energy transition adds to existing challenges. If Taiwan wants to get back on track, 2025 will be a pivotal year for Taiwan’s energy transition.
By James McCatherin, Jason Wang, and Wen Huang
Taiwan added approximately 2.7GW of renewable energy installed capacity in 2024 (as of November), which was 1GW short of the 3.824GW of capacity added in 2023. As of November 2024, this brings Taiwan’s renewable energy capacity to 20.687GW contributing 11.1% to the total energy production; meaning it is now likely that even the recently lowered Ministry of Economic Affairs' (MOEA) 2025 target of 15% renewable energy by the end of 2025 will be out of reach.
Looking ahead to 2025, we are left with the following reflections on the state of the energy transition:
1) Taiwan is progressing along its energy transition, albeit slower than expected.
2) The current outlook suggests an increasing gap between renewable energy goals and the renewable energy pipeline.
3) Unaddressed stakeholder concerns are becoming a significant barrier to the growth of renewable energy.
Energy mix - 2016 to present
In 2016, Taiwan announced its nuclear-free homeland policy with the aim of: 1) Phasing out nuclear power, 2) Increasing renewable energy to offset decommissioning, 3) Increasing the share of gas in the electricity mix, and 4) Promoting green energy technology. For renewable energy, this included setting targets of 5.7GW for offshore wind (OSW), 1.2GW for onshore wind, and 20GW for solar energy (PV) by 2025. This commitment was further solidified in 2019 with the Renewable Energy Development Act (REDA) amendment, which legally established Taiwan's green energy goal of achieving 27GW by 2025.
These policies have since seen a mixed level of success. Despite increasing renewable energy generation by a substantial 16GW since 2016, Taiwan remains 6.4GW short of its 2025 goal as we begin the year. In addition, with the simultaneous nuclear phase-out during the same period, the increase of renewable capacity in recent years has done little to quell Taiwan’s overall carbon emissions for the energy sector. The share of carbon-free electricity capacity in 2016 was 16.81%, dropping to 15.48% in 2024. During this same period, production in GWh dropped by a significant 7.36%, marking a regress in Taiwan’s fight on climate change.
Source: Energy Administration
A comparison of the 2016 and 2024 energy mix (up to November 2024) for power generation visualises both the decommissioning of nuclear power and the addition of renewables, specifically PV and OSW. In addition, a slow phase-out of coal and oil-fired power with simultaneous additions to natural gas installations has resulted in an increase in the percentage of overall thermal power generation in Taiwan, despite what is now a ‘cleaner’ grid. When looking at overall renewable power generation over the same period, power generation from renewables increased from 4.8% in 2016 to 11.1% as of November 2024. The graph below demonstrates recent overall renewables growth and growth by type. As expected, the most dramatic capacity increases have been seen in solar PV and, more recently from OSW.
Source Energy Administration’s E-Stat Platform
A closer look at the graph above, also reveals a reversal this past year in what had been an ‘exponential’ increase in renewable energy since 2016 levels, after new installations in 2024 trailed those of 2023. Furthermore, when analysing the current pipeline, it seems increasingly likely that Taiwan will continue to see a growing gap between set energy goals and actual renewable energy rollout, largely due to a slowdown in solar PV and offshore wind sectors.
Mind the gap
As the trend of missed energy goals continues, an accumulating gap between energy goals and energy rollout for OSW and PV becomes apparent. In an effort to predict the future of this gap, we have analysed the likely pipeline based on market conditions for OSW and PV to estimate the potential accumulated gap before 2030. Our best guess as we look into the second half of the 2020s based on current and anticipated market conditions, is an estimated total gap of 11GW between actual energy rollout and energy goals for the OSW and solar sectors by 2030.
Solar PV
Taiwan's PV market, which had demonstrated steady growth from 2016 to 2023, encountered significant challenges in 2024. By November, only 1.509GW of solar capacity had been installed throughout the year, falling well short of the 3.791GW target for the year and leaving a gap of 2.282GW. To meet the original goal of 20GW by 2025, nearly 6GW would need to be installed by end of 2025, a target that is almost impossible to reach. Data from Taipower indicates that new contracts signed with the government owned utility have stagnated since the fourth quarter of 2024. With projections indicating a shortfall of almost 7GW by 2029—based on the National Energy Policy targets and average annual installation rates of 2GW from 2024 to 2029—the gap threatens Taiwan’s power supply and its carbon reduction goals.
(NIRAS projection using EA source data）
Based on the National Energy Policy targets announced by the EA and the average annual installation capacity from 2026 to 2029 (2GW/year), projections indicate a gap of nearly 7GW by 2029. This shortfall is likely to jeopardize both Taiwan's power supply and carbon reduction goals in the coming years.
The challenges behind this shortfall are multi-faceted. One significant issue is the negative public perception of the solar sector, largely due to scandals involving solar PV projects in recent years. These scandals have led local governments to adopt a more conservative approach to new projects, wary of legal ramifications and political fallout. Compounding this is the lack of a comprehensive spatial plan for solar PV development, which has resulted in fragmented land use. Many developers focus on large-scale projects, which can disrupt local landscapes and provoke opposition from environmental groups and residents. The government’s insufficient efforts to facilitate dialogue among stakeholders have made it increasingly difficult for developers to acquire suitable land.
In addition, declining feed-in tariffs, intended to promote direct sales of green energy to private enterprises, have led to an unstable market. Developers are now incentivized to sell electricity directly to companies, but the volatility in market prices, coupled with unclear transaction information, has resulted in many firms opting for minimal green power procurement to meet supply chain requirements, rather than committing to more ambitious renewable energy targets. Finally, while some renewable energy projects offer community funds or electricity-sharing schemes, many local residents feel excluded from these benefits, which only strengthens opposition to new solar developments.
As we begin 2025, Taiwan’s solar market is grappling with a combination of regulatory challenges, public distrust, market instability, and limited community involvement. To address these issues and meet the 2025 target, a coordinated strategy is essential, one that includes clearer planning, stronger stakeholder engagement, and more stable market conditions for solar PV development.
Offshore wind
OSW is a cornerstone of Taiwan’s energy transition, particularly given the country's limited land availability and increasing electricity demand. However, as 2025 begins, the sector finds itself at a critical juncture. After no OSW projects reached financial close (FC) in 2024, the challenges surrounding the industry have become more pronounced. Since the announcement of the Round 3.1 auction results at the end of 2022, the industry has yet to see significant milestones met, with Round 2 projects still catching up and little progress from the 300MW Haixia project. This delay threatens to disrupt the government’s offshore wind commissioning roadmap.
The regulatory and market landscape remains uncertain, leaving developers grappling with risks. Among the Round 3 projects, CIP’s Fengmiao project appears to have made the most progress in 2024, securing 1.1GW across Round 3.1 and 3.2 allocations, along with some supply chain contracts and corporate power purchase agreements (CPPAs) for the first phase of the project. Similarly, SRE’s Formosa 4 project obtained its establishment permit in November. While these steps signal some advancement, both projects face tight deadlines and significant hurdles to achieve their 2027 commercial operation dates (CODs). Other projects have seen virtually no progress in public announcements.
Taiwan’s ambitious target of 1.5GW of OSW capacity per year looks increasingly unattainable under current conditions. Although the government recently decided to remove mandatory local content requirements (Industry Relevance Plans, IRPs), the transition is fraught with complexity. The entangled issues stemming from the local content policy—dubbed a “hairball” by industry insiders—are proving more challenging to unravel than they were to implement. Developers must engage with a wide array of stakeholders, including government agencies, supply chain entities, and CPPA offtakers, to devise strategies that mitigate costs and risks. Meanwhile, the government must provide integrated policies and solutions to support development, as ad hoc revisions will only exacerbate stakeholder uncertainty. The graph below shows what can be expected in new installations under current market conditions, if no actions are taken to revive all Round 3.1 and Round 3.2 projects.
“Plan” in grey representing government targets, “Is” in blue represents installed capacity up to 2024 and from 2025 assumptions based on publicly available market information (NIRAS projection)
The CPPA market remains a critical bottleneck. As all awarded projects feature zero-bid contracts, CPPAs are essential for financial close and project continuity. However, misaligned pricing in the CPPA market, exacerbated by lingering local content requirements, poses significant challenges. Although the Ministry of Economic Affairs (MOEA) has signalled policy adjustments, the lack of clarity around implementation has left developers and the supply chain in limbo.
Time is an unrelenting pressure point. With no financial close achieved by the end of 2024, fully commissioning Round 3.1 projects by 2026 or 2027 appears increasingly difficult. Developers face a trifecta of challenges: revising local content plans, securing CPPAs, and completing construction, all under tight timelines. These interconnected issues risk derailing Taiwan’s energy transition if left unaddressed.
The accumulated challenges facing OSW development demand immediate and decisive action. The government must reassess its targets and roadmap, confronting the feasibility gaps rather than relying on last-minute rule changes that disrupt the entire industry. While these decisions will undoubtedly be complex and contentious, inaction is no longer an option. Prolonging the status quo will only magnify risks and costs for all stakeholders. A pragmatic and collaborative approach is essential to ensure OSW can fulfil its critical role in Taiwan’s path to net zero emissions.
Political atmosphere
The development of renewable energy needs consistent political support and effective policy. The energy transition's success relies on strong government attention and engagement, including provision of new policy and revision to existing regulatory frameworks. Although the president recently established a new committee to discuss issues related to climate change, as we begin 2025, a clear consensus for the energy transition is still missing within government. The domestic political environment in Taiwan is in a period of unrest, leaving little hope that the energy transition will receive the attention and resources it needs in the short term. Partisan conflicts in the Legislative Yuan are becoming more intense, leading to further social divergence between different parties and their supporters. Looking at the situation in the Legislative Yuan, it seems apparent that we may expect further polarization between parties, making meaningful dialogue and action for energy transition and climate action unlikely.
At the local level, there has recently been a trend of local governments slowing down permitting procedures to avoid legal or political risk, particularly for PV projects. This is following a number of stakeholder ‘scandals’ which have led to more hesitancy towards renewables on behalf of local governments. Ineffective communication channels between central and local governments and a lack of clear consensus for the energy transition within the central government means this trend is likely to continue into 2025.
Improving stakeholder engagement, incorporating the Just Transition
Robust standards for stakeholder engagement are largely absent in Taiwan. Relatedly, in recent years, social resistance to renewable energy projects have hindered Taiwan’s progress in renewable energy. An increase in stakeholder disagreements and associated negative media coverage of renewables have tarnished the perception and overall reputation of renewables in Taiwan, impacting the energy rollout.
As showcased in the 2024 ECCT’s Best Practice Report for Stakeholder Engagement and Permitting supported by NIRAS (pictured), A well-defined stakeholder process and mechanism are the key to successfully delivering renewable energy projects. Effective stakeholder engagement can bring positive outcomes and mitigate risks for all project stakeholders, including project developers, authorities, local community, and suppliers. It is also a key component for ensuring that the energy transition is just and equitable for all.
A lack of effective stakeholder mechanisms can lead to a range of market consequences including cancelled or delayed projects, social resistance, and perceived risk on behalf of investors. Heading into 2025, Taiwan’s renewable energy market is unfortunately faced with all of these challenges.
In addition to poorer outcomes for renewable energy rollout, a lack of effective guidelines for stakeholder engagement jeopardizes an equitable or ‘Just’ energy transition. The Just Transition has been enshrined into law as part of the 12 primary objects for Taiwan’s 2050 net zero goal. As such, the 2022 Climate Change Response Act (氣候變遷因應法) incorporates the Just Transition based on the principles of “respecting human rights and dignified labour”. The law calls on transition actors such as the renewable energy industry to “consult all communities affected by the net zero emissions transition to assist industries, regions, workers, consumers, and indigenous peoples in stable and just transition.”
Implementation of Just Transition governance brings an opportunity to improve guidelines and mechanisms for stakeholder engagement across Taiwan’s energy transition. If well executed, establishing comprehensive mechanisms and resources for social engagement has the potential to both decrease industry risk and increase equity to bring Taiwan’s energy transition back on track.
Regaining momentum
As Taiwan approaches the 10-year mark of its energy transition, 2025 stands as a critical juncture for the country’s renewable energy sector. While this article has highlighted several challenges, it is important to acknowledge the significant progress Taiwan has made since 2016.
To regain momentum, the government needs to "mind the gap" by addressing industry challenges and prioritising the energy transition. The government should take the time to design policies that create a better market environment, facilitating fair pricing and accelerating the energy transition. It is vitally important that this includes considerations for social concerns implementation of guidelines and practices for effective stakeholder engagement.
Looking back on the past decade, Taiwan's renewable energy development has evolved from slow beginnings to a period of rapid growth, followed by recent stagnation. Each setback presents an opportunity to refine strategies and approaches. Open and effective communication among the government, developers, and the supply chain will be essential to overcome challenges and ensure the industry stays on course towards a successful energy transition.
James McCatherin is a Consultant for Renewables and Sustainability Advisory at NIRAS. He brings abundant experience in stakeholder engagement, permitting, policy analysis and market analysis within Taiwan’s renewable energy sector.
Jason Wang is a Senior Economist for NIRAS, a Danish multi-disciplinary engineering company. He is focused on energy policy, the Just Transition and energy market consultancy in Taiwan.
Wen Huang is Director for Renewables and Sustainability Advisory (APAC) at NIRAS. He has abundant experience in engaging Taiwan's renewable energy industry and sustainability sector to support several renewable developers and corporations to accelerate their sustainable transitions.
