Taiwan Today

Government incentives and technical support programs are expediting the development of offshore wind farms.

In October last year, Taiwan’s first offshore wind turbines were erected in the waters off the northern county of Miaoli. Built by Taipei City-based Swancor Holding Co., the two demonstration devices have a combined capacity of 8 megawatts, enough to power some 8,000 households.

“The installation of the offshore turbines was a pioneering undertaking for Taiwan’s wind power sector and marks a major milestone in our efforts to boost the nation’s renewable energy resources,” Economics Minister Lee Chih-kung (李世光) said while inspecting the facilities Nov. 5. “By promoting greater use of renewables, the government is striving to develop a nuclear-free homeland.”

Scheduled to begin commercial operations in the first quarter of this year, the devices are the first of a substantial number that Swancor intends to build in the waters off Taiwan. The company, a leading global supplier of resins for turbines, plans to invest about NT$20 billion (US$628.9 million) on installing a further 30 offshore devices by 2019.

Swancor’s aggressive expansion into wind farm construction has been made possible by various government incentives, including subsidies for development costs and feed-in tariffs (FIT) guaranteeing a fixed premium price for electricity for a period of 20 years. These enticements are designed to expedite offshore wind farm development, and in so doing facilitate Taiwan’s transition to a low-carbon energy mix.

Thousand Turbines

The Thousand Wind Turbines Project, approved by the Executive Yuan in 2012, is spearheading efforts to bolster Taiwan’s wind power resources. Overseen by the Bureau of Energy (BOE) under the Ministry of Economic Affairs, the initiative’s promotion office is tasked with removing regulatory obstacles to investment and providing technical assistance to private sector partners.

In 2012, the BOE also launched a funding initiative to help kick-start commercial interest in offshore turbines. Based on the provisions of the 2009 Renewable Energy Development Act, the Offshore Wind Power Demonstration Incentive Program offers subsidies to help cover development and equipment costs. Besides Swancor, state-run utility Taiwan Power Co. (Taipower) and a consortium led by Taipei-headquartered Taiwan Generations Corp. have received funding through the program.

Su Jin-sheng (蘇金勝), director of the BOE’s Energy Technology Division, said the island’s ample wind resources, which include the summer southwest and winter northeast monsoons, make it ideally suited to the development of wind energy. Offshore turbines are an especially promising option given the nation’s abundant sea territory, he added.

The ultimate goal of the Thousand Wind Turbines Project, as the name indicates, is to increase the number of land and offshore devices to more than 1,000. As of August 2016, there were a total of 346 onshore turbines in Taiwan. Situated largely along the western coast and in outlying Penghu County, these devices have a total capacity of 682 MW. The government aims to increase the installed capacity of land turbines to 1.2 gigawatts by 2025.

Taiwan’s future wind power development projects will focus primarily on offshore turbines, however, given the difficulties of finding suitable locations for onshore devices along the island’s heavily populated western coast. “Considering land-based wind energy development is gradually approaching saturation point and the Taiwan Strait is rated by international engineering consultancy and research firm 4C Offshore as having the best wind resources in the world, we’re making greater efforts to promote offshore projects,” Su explained.

Taipower’s tariff rates for 2017 reflect this focus. This year’s 20-year FIT contract for offshore devices offers approximately NT$6 (US$0.19) per kilowatt-hour, a 5.3 percent increase from 2016. The FITs for onshore devices with a capacity of over 20 kilowatts stand at about NT$2.8 (US$0.09) per kWh, up some 2.3 percent year on year.

The government’s long-term goal is to raise the nation’s offshore wind power capacity to 3 GW by 2025. “To facilitate private sector investment, we’ll also offer assistance with environmental impact assessments, fisheries compensation negotiations and infrastructure construction,” the director said.

Target Locations

The BOE has already identified possible locations for offshore wind farms, releasing a list of 36 potential sites in July 2015. Several prominent foreign companies have expressed interest in constructing turbines in the areas.

Among these is Dong Energy, which has filed applications to build wind farms in four of the BOE-designated sites off central Taiwan’s Changhua County. While inaugurating its Taipei office in November last year, Denmark’s largest energy firm asserted its commitment to working with the public, private and academic sectors to support the nation’s transition toward renewables.

“I believe we can help Taiwan make the most of its tremendous offshore wind resources,” Dong Energy Asia-Pacific General Manager Matthias Bausenwein said. “Offshore wind can become a key component in Taiwan’s future energy mix.”

Taipower, which operates the national grid, will also play a crucial role in this transition. “The global trend toward renewable energy underlines the importance of this sector in tackling climate change and advancing the wider sustainable development agenda,” said Lee Wen-bing (李文彬), deputy director of Taipower’s Department of Renewable Energy. “Our company too has listed the development of renewable energy as its priority goal.”

In 2002, the utility launched a 10-year onshore wind power development program in cooperation with several European turbine manufacturers including Germany’s Enercon and Denmark’s Vestas Wind Systems. By the end of 2011, Taipower had installed about 170 land turbines with a total capacity of 296 MW.

Lee noted, however, that progress on building onshore wind facilities has slowed significantly in recent years due to community opposition and increasing difficulties in acquiring land. Consequently, his company is now focusing on offshore wind farms, setting its sights on the waters off Changhua and Penghu as well as southern Taiwan’s Yunlin County.

Last October, Taipower established its Offshore Wind Power Construction Office at Taichung Power Plant in central Taiwan. The office is currently implementing the first stage of the company’s offshore turbine project. Expected to cost NT$19.5 billion (US$613.2 million), this initial phase will be built in the waters west of Changhua and have a total capacity of 110 MW. It is scheduled to commence operations in June 2020.

Renewable Energy Hub

The central county of Changhua is set to be a major beneficiary of Taiwan’s renewable energy push. Home to 83 onshore turbines, it is already a hub of the sector, possessing the largest installed wind power capacity, at 188.5 MW, of any city or county in the nation.

“Changhua has excellent wind and solar energy resources, and we must make the best use of them by producing the maximum amount of clean energy possible,” said Changhua County Magistrate Wei Ming-ku (魏明谷‬). “The county government will seek to build Changhua into a major center for renewable energy development in Taiwan and Asia.”

A 2015 survey by 4C Offshore found that 16 of the world’s 18 best offshore wind farm locations are in the Taiwan Strait, and several of these are situated in the waters off Changhua. In addition, 21 of the 36 offshore wind farm sites identified by the BOE are off the county.

Wei said his administration plans to formulate a green energy ordinance that would require firms in Changhua to source 15 percent of their electricity from renewable sources. To address challenges related to capital investment, talent and technology, the county government also hopes to collaborate with experienced foreign companies including Dong Energy, Northland Power of Canada and Germany’s Wpd, in addition to local firms China Steel Corp., Swancor and Taipower, he added.

“While establishing partnerships with enterprises, we’ll ask them to set up operations in our county to facilitate technology transfer and job creation,” the magistrate said.

The central government similarly hopes to expand Taiwan’s expertise in wind energy technology by encouraging companies to form strategic alliances. There was a significant development in this regard Nov. 9 last year when several prominent local institutions agreed to cooperate on marine engineering for offshore wind power generation.

Led by shipbuilder CSBC Corporation, Taiwan, the alliance, known as Marine Team, comprises enterprises and research organizations including China Steel Corp., the state-supported Industrial Technology Research Institute and Taipower. The government hopes that such cooperative initiatives will help transform Taiwan into a renewable energy development hub for both local and overseas companies.

“Taiwan can become a gateway for foreign firms to tap into Asia’s offshore wind power market,” the BOE’s Su said. “Fostering international technological cooperation can help our nation strengthen its competitiveness in renewables and move toward greater energy independence and security.” 

Write to Kelly Her at kher@mofa.gov.tw