Taiwan has been one of Asia’s leaders in the adoption of clean energy thanks to its aim to switch from coal to renewable energy, which has fueled the rapid growth of offshore wind generation. The government has set ambitious goals, including 10.9 GW by 2030 and 60% renewable energy by 2050, given that wind capacity has increased from less than 1 GW before the COVID-19 pandemic to over 4 GW today. Industry analysts caution that when Taiwan’s offshore wind moves to deeper waters, the wind boom will encounter new difficulties that will necessitate more technological innovation, higher costs, and more robust state support to survive.

Rising Costs and the Push into Deeper Waters

Relatively inexpensive projects in shallow seas drove aggressive bidding and quick capacity expansion, due to which Taiwan’s offshore wind industry moves to deeper waters. However, developers now have to deal with deeper and more technically complex sites, and such chances become less available.

Key challenges include:

• Deeper fixed-bottom foundations: In an effort to push the boundaries of engineering, developers are expanding seabed turbine installations from 60 meters to almost 90 meters.
• Floating wind uncertainty: Although floating platforms may open up new possibilities, the technology remains unproven and financially hazardous, particularly in light of recent international setbacks and abandoned projects.
• Increased strike prices: Due to increased uncertainty and capital demands, analysts predict future bids of T$5–6/kWh, which is about twice as much as coal’s T$3/kWh.

The demand for offshore wind power is heightened by corporate demand, especially from Taiwan’s semiconductor industry. To please international customers like Apple, companies like TSMC must meet renewable energy standards. However, stable policy frameworks and significant government subsidies will be necessary to maintain supplies in deeper seas.

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Policy Shifts and Industry Concerns

Government intervention is still essential for closing the gap between aspiration and reality. Industry players are uneasy about Taipei’s recent policy changes, even if the country is still negotiating the auction terms for 3 GW of additional offshore capacity.

Key developments include:

• Auction reforms: In November of last year, officials eliminated the need for developers to buy equipment from regional producers. Although the change was meant to lower costs and speed deployment, it created uncertainty for both foreign investors and domestic suppliers.
• Subsidy reliance: As strike prices rise, subsidies will continue to be crucial for preserving investor confidence and the ability to compete with fossil fuels.
• Capacity targets at risk: Unless more robust support measures are implemented, analysts predict that Taiwan will fall short of its 18.4 GW target by 2035, reaching just over 10 GW.

Voices within the industry emphasize that sudden policy changes could slow Taiwan’s progress. SEMI’s David Chiang cautioned that the semiconductor industry, which relies heavily on reliable renewable energy sources, is experiencing instability due to changing procurement regulations. Regional specialists advise avoiding making significant investments in floating wind until it has been validated on a large scale.

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Final Thoughts

Taiwan’s offshore wind journey serves as an example of the potential benefits and drawbacks of a swift transition to sustainable energy. Success as the island ventures into deeper waters will rely on steady government support, creative engineering, and unambiguous long-term policy commitments. As its energy-hungry industries require more sustainable power, Taiwan risks halting its renewable momentum without it.

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