Rocky road to net zero

The 2050 targets in the graph are the average of the ranges given in the government’s net zero 2050 ambitions. Actual installed capacity is based on data from the website of the MOEA’s Energy Administration. Looking at the latest figures for renewables, solar had an installed capacity of 12GW by the end of 2023. Offshore wind has an installed capacity of 2.4GW. By the end of 2025, both solar and offshore capacity would need to nearly double and by 2030 these numbers must double again to meet targets.

It is frequently stated that Taiwan's limited land area and high population density (地狹人稠) pose significant challenges for the development of new renewable energy installations. However, this perception must be addressed, as the extensive expansion planned under the net zero 2050 targets will have widespread impacts.

In this context, it is important to note the lack of government support for onshore wind, which was an early innovator in renewable energy and remains one of the most cost-effective renewable options. Currently, onshore wind is facing significant challenges in maintaining and repowering its existing installed base. With a moderately aggressive buildout plan, onshore wind has the potential to generate 5GW of energy. However, the total installed capacity has stagnated at approximately 900MW, with new installations not progressing and approvals for repowering not being granted, mainly due to a perceived lack of public acceptance and lack of local government support.

If the issue of public acceptance and lack of local government support for renewable energy projects is not addressed, achieving Taiwan’s ambitious plans will be challenging. The target of 47.5GW of offshore wind requires the installation of several thousand large wind turbines in marine environments. Similarly, achieving 60GW of solar power necessitates the deployment of over 100 million solar panels or covering an area of 100km2 with current technology. While technically feasible, the likelihood of reaching these targets is questionable given the current status of solar and wind energy projects.

Currently, during the initial phase of the buildout, we are behind schedule. Renewable energy production at the end of 2024 constituted 11% of total electricity. The government has already revised the original target of 20% by end of 2025 to 15%, but even this target may not be met.

Figure 2: Taiwan's electricity renewable energy capacity

Taiwan is facing several challenges in its rollout of renewable energy.

1. Policy and regulatory inconsistencies: Taiwan's renewable energy policies have been slow to adapt to technological and market changes, creating an unpredictable policy environment that deters foreign investment and complicates compliance with international sustainability standards.

2. Financing challenges: Offshore wind developers are facing difficulties in securing construction financing due to banks' concerns about the credit risks of corporate off-takers. The government has implemented measures to mitigate these risks, but their effectiveness has yet to be tested.

3. Permitting: There is a noted lack of support and proactiveness in particular at the local level to initiate renewable energy projects. Environmental Impact Assessment processes are lengthy and, due to the expert panel system, can be unpredictable in their scope.

Status of hydrogen
A key target in relation to hydrogen is increasing the share of power generated by hydrogen to 9-12% by 2050. Currently Taipower is running demo projects cofiring 5% hydrogen in gas fired power turbines. The main challenge will be the realization of infrastructure to import green energy. This does not currently exist and plans for such a facility in Taichung harbour have been delayed. For further information on hydrogen, check the following article: https://euroview.ecct.com.tw/category-inside.php?id=2188

Status of power systems and storage buildout
To maintain grid stability with a high renewable energy content, energy storage facilities are a necessity. Battery Energy Storage Systems (BESS) are in use both at Taiwan’s monopoly utility Taipower, as well as by private entities. To enable the investment in BESS from the private sector, Taipower has set up an energy trading platform (etp.taipower.com.tw). This has attracted a lot of attention from investors; the number of applications exceeded the needed capacity by eight times in 2023, resulting in Taipower having to temporarily stop the filing of new applications. However current participants in the programme report low energy prices which may lead to a reduction in interest going forward. For an extensive look at battery storage in grid check https://euroview.ecct.com.tw/category-inside.php?id=2073

Status of CCUS
Carbon Capture Utilisation and Storage (CCUS) is presently conducted only in demonstration projects within Taiwan. Nevertheless, there is considerable potential for carbon storage in saline aquifers along the west coast of the country. The storage capacity is sufficient to meet the targets outlined in Taiwan’s net zero 2050 plans. A significant challenge will be the cost of storage, which is estimated at NT$1,900 to NT$4,000 per ton. With the current carbon tax set at NT$300 per ton, the incentives for carbon storage may be insufficient. However, as the fee is expected to increase over time, CCUS presents a viable solution for addressing hard-to-abate emissions, particularly in sectors such as cement and steel production, waste incineration, and potentially the production of synthetic aviation fuels.

For a comprehensive analysis of the status and potential of CCUS in Taiwan, please refer to the following article: https://euroview.ecct.com.tw/category-inside.php?id=2284

Status of innovative energies
After years of overlooking the potential of geothermal energy, the Taiwanese government is now actively promoting it with long-term targets of several gigawatts. This initiative faces similar challenges to other projects, particularly in stakeholder engagement, which poses a significant risk to the technology's success. It is premature to determine whether the stated potential of 6GW can be achieved, as social and political obstacles remain. However, developers assert that the technical potential for geothermal exceeds 6GW.

Although biofuels are an established technology, they receive minimal government attention due to lack of space and the wish to maintain agricultural land for food production purposes.

Wave energy is an emerging technology that currently has limited capacity to produce significant amounts of energy at competitive costs. However, it holds promise for a more prominent role in the future.

Status of zero emission vehicles
Electric passenger vehicles: As of the end of June 2023, Taiwan had 46,919 registered electric sedans, comprising approximately 0.5% of the total registered vehicles in the country. Currently, about 3% of all vehicles sold annually are electric. This percentage is projected to increase to 30% by 2030 and to 100% by 2040.

Electric commercial vehicles, including trucks, are not assigned specific targets under Taiwan's net zero plans. However, their adoption is promoted through the development of charging and hydrogen refuelling infrastructure, as well as the implementation of carbon fees.

Electric scooters: Electric scooters boast a higher penetration rate compared to electric cars. In 2021, approximately 94,000 out of 809,000 new scooter registrations were electric, representing roughly 11.6% of the total. The government of Taiwan has been actively promoting the adoption of electric scooters through various initiatives, such as subsidies and the development of a battery-swapping infrastructure. The prevalence of scooter battery exchange stations is significant, equating to the number of petrol stations.

The nuclear option
Although not included in Taiwan’s net zero 2050 plans, there is a growing advocacy from the nuclear sector to explore nuclear energy as a zero-carbon alternative or complement to renewable energy sources. Small Modular Reactors (SMRs) are proposed as a feasible option. However, SMRs are also comprehensive nuclear facilities that require 10-15 years for construction and present similar advantages and disadvantages as traditional nuclear plants, including waste storage, radiation exposure, and proliferation risks. Locating and obtaining permits for suitable sites may pose significant challenges. Given the magnitude of the net zero 2050 challenges, we should consider all available zero-carbon technologies. For a more detailed analysis of SMRs, please refer to the following article: https://euroview.ecct.com.tw/category-inside.php?id=2160

Recommendations
Enable technological advancements: Achieving net zero emissions necessitates continuous innovation in clean energy and carbon reduction technologies. Taiwan must invest in cutting-edge research and development. For instance, offshore wind targets cannot be met without the advancement of floating wind technology, which is still relatively new.

Leave no technology behind: Given the enormous challenges posed by the net zero 2050 targets, all technologies should be actively promoted. Onshore wind and biofuels, which have long been ignored or even discouraged, can both play a significant role.

Regulatory and policy support: Strong and consistent government policies are essential to drive the transition. The government at all levels should proactively work towards achieving the targets and take an active role in enabling the rollout of renewables and other zero-emission technologies.

Electric passenger cars market share: Particular attention is needed for the market share of electric passenger cars, as the 30% target by 2030 is at risk of not being met. Range anxiety is cited as one of the main reasons for the lack of interest, the further expansion of the fast charger network and home charging facilities is necessary.

Energy-saving and carbon reduction initiatives for industry are currently encouraged through information provision and the carbon fee. It is suggested to also consider implementing punitive measures; for example, making energy-saving investments with a return on investment of less than five years mandatory.

Conclusion
In conclusion, Taiwan's commitment to achieving net zero emissions by 2050 faces significant hurdles despite having established strategic pillars, key strategies, and formalised goals through the Climate Change Response Act. The challenges span across inconsistent policies and regulations, financing difficulties, and permitting complexities, all of which impede the development and deployment of renewable energy projects. Furthermore, social and political obstacles, such as gaining public acceptance and stakeholder engagement, alongside economic considerations like the high costs of carbon storage, present substantial impediments. It is uncertain whether the current efforts and buildout will allow Taiwan to meet the targeted 10% decrease in emissions compared to 2005 levels by 2025.

To successfully navigate these challenges and realize its net zero 2050 ambitions, Taiwan must prioritise consistent and supportive government policies, foster technological innovation, and ensure proactive engagement from all levels of government and society. Particular attention should be given to enabling the rollout of renewables and other zero-emission technologies, as well as promoting often overlooked technologies, like onshore wind and biofuels. Overcoming these obstacles is crucial for Taiwan to transition towards a sustainable, low-carbon economy and meet its ambitious environmental targets.

Bart Linssen is the Director of Renewable Energy at RCI Engineering