The offshore wind market in Asia Pacific is expected to experience massive expansion over the next five to seven years, particularly in the more advanced economies of Taiwan, Japan, South Korea, and Australia, as governments face increasing pressure to hit their net-zero emissions targets.

However, Taiwan's offshore wind sector has several challenges to overcome to make the industry viable and hit future installation targets. Taiwan is targeting 20.5GW by 2035.

Significantly, the key to Taiwan and Asia Pacific’s success will be collaboration. 

As witnessed in Europe – where the offshore wind business was born - the shared challenges of supply chain, infrastructure and regulation were all solved by working together, across the region, not through compulsory localisation. 

Research from the Global Wind Energy Council (GWEC) shows that regional collaboration on infrastructure and supply chains, as well as developing harmonious regulations with policymakers, will be the key to accelerating Asia Pacific’s energy transition.

Outlook for Taiwan offshore wind market

Initially, Taiwan’s offshore wind sector was very successful in attracting big international developers and suppliers from established markets due to strong government mandates and record high feed-in tariffs.

However, recent decisions made by the government could put Taiwan's progress back by several years. Significant local content requirements, as well as a cap on project sizes and extreme low auction price ceilings, will have a strong impact on the commercial viability of future offshore wind projects. Indeed, they already appear to have driven international developers towards other more favourable regional markets, such as Australia and South Korea.

Taiwan's ambition to create a local manufacturing and supply chain for renewable energy is admirable, however the heavy industry required to support this has not developed at the required speed. Moreover, local fabricators face steep learning curves in their efforts to achieve necessary quality standards and deadlines. It is no wonder developers are looking overseas to mitigate risks rather than invest locally.

Crucially, Taiwan may not achieve its long-term offshore wind targets unless rigorous local content rules are relaxed, especially as other emerging markets in Japan, South Korea, and Australia, are attracting investment and developers. Relaxing local content requirements and participating in regional dialogue and cooperation to create a regional supply chain will improve competitiveness and help lower capital investment costs.

Worryingly, the new Round 3 auction is setting the price ceiling too low, making it even harder for offshore wind projects to be viable with Taipower as the offtaker. Therefore, future offshore wind tariffs will continue to be closely tied to demand from Taiwan’s private sector, where some companies are seeking to boost their ESG credentials. Under the current policies this puts the buildout of Taiwan’s offshore wind sector at risk and makes its future uncertain.

Collaboration and dialogue needed to develop offshore wind in Asia

Importantly, continued collaboration and dialogue are needed to accelerate the development of offshore wind in Asia Pacific. Above all, it is imperative for emerging and developed markets to come together to discuss how they can kickstart regional collaboration at the very first edition of the Global Wind Energy Council’s (GWEC’s) APAC Offshore Wind & Green Hydrogen Summit, that will take place in Australia in late-August. 

The summit will spotlight the crucial topic of Asia Pacific collaboration and is set to be the key meeting point for top government officials, private sector leaders, and civil society representatives, focused on advancing the uptake of offshore wind and green hydrogen in the region.

GWEC will address the challenges with industry players and governments across the region, to find solutions, rather than wait another four to five years, by which time it will be too late to solve them. Major companies taking part in the event include Copenhagen Infrastructure Partners (CIP), Shell, Iberdrola, and Corio Generation. 

GWEC, which was established in 2005 to provide a credible and representative forum for the entire wind energy sector at an international level, will also release its latest Offshore Wind 2023 report at the summit, packed full of valuable insights. Moreover, the groundbreaking event is expected to shape the future of renewable energy in the Asia Pacific region, in Australia, and beyond.

Discussions at the summit will be centered on cross-cutting themes such as: project development, finance, supply chain, marine spatial planning, legislation, and regulatory best practice, permitting and market design. Australia and other markets are moving fast to attract international and local developers with strong political support for renewable energy and ambitious targets. Taiwan also needs to act, with its policymakers and businesspeople participating in regional dialogue and collaboration, to ensure the success of its offshore wind sector and net zero ambitions.

Crucially, Asia’s offshore wind industry can rival the size of Europe’s within the space of ten years. Although the path to get there remains unclear, the opportunities are enormous as the region’s installed offshore wind capacity will surge, if supported by strong government policies and regional collaboration. 

(This piece reflects the author's opinion, and does not represent the opinion of CommonWealth Magazine.)

About the author:

Liming Qiao is the Head of GWEC Asia at Global Wind Energy Council (GWEC). Since joining GWEC in 2008, she has been in various roles at the association focusing on policy and China related issues. She has been working in the field of climate and energy since 2003, with a focus on renewable energy policy and international climate policy. 

Have you read?

• Taiwan offshore wind development faces headwinds 
• Why are wind farm developers leaving Taiwan?

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