The market for wind energy in Taiwan is expected to grow at a CAGR of more than 10% in the forecast period of 2020-2025. Factors such as encouraging government policies and pressure to meet power demand using renewables to decrease dependency on fossil fuels are expected to be significant contributors to the growth of the market. With the aim of the government to install more than 5 GW of offshore wind energy by 2025, rapid growth in the wind market is expected during the forecast period. The declining costs of renewable technologies are becoming competitive with fossil fuel sources, and additional subsidies on renewables are driving the wind energy market further. On the other hand, due to land constraints, slow growth in onshore wind energy is expected. Additionally, limited power capacity by variable renewable energy sources and huge initial investment, are still a few challenges for the growth of wind energy.
Key Highlights
- Although wind energy growth in Taiwan has been prolonged until 2018, with around 700 MW of installed capacity, due to land constraints onshore wind energy was not able to show rapid growth. With an alternative, Taiwan is exploring its offshore potential with the aim of 5000 MW wind energy by 2025 from offshore.
- Taiwan offshore wind power remains tapped due to supply chain issues in the country. However, increasing investments and efforts to deploy offshore wind turbines by the government and international companies is expected to provide a significant opportunity for the market.
- Taiwan, with its ambitious upcoming renewable projects, is all set to achieve its renewable energy target of 20% by 2025. Several amendments in renewable concerned laws and policies have been made that will be assisting in the growth of the wind energy market
Key Market Trends
Offshore Wind Energy to Drive the Market
- The installation of wind farms offshore is becoming lucrative because of the higher wind speed in comparison to onshore and no restrictions of the area in comparison to onshore. Due to this, large scale offshore wind energy deployment is under operation.
- The wind power market companies have been able to install taller wind turbines due to improvements in the wind turbine materials used, which allows the turbines to exploit higher altitude winds. The growing size of the wind turbines has helped lower the cost of wind energy, indicating that it is economically competitive with fossil fuel alternatives.
- Continued development of several offshore projects has created new market opportunities for the undersea cable industry also. For example, Formosa 1 is an offshore wind power plant being developed near Miaoli, Taiwan, by Formosa Wind Power Co in partnership with other companies, is Taiwan’s first commercial-scale offshore wind project with a capacity of 130 MW.
- With more than 3000 MW of offshore wind plants auctioned by 2020, the development of 5000 MW of wind energy in offshore by 2025 is going to change the global stand of Taiwan in renewable energy market.
Upcoming Projects And Government’s Policies
- Taiwan government amended the Electricity Business Act in 2017 permitting renewable power generators to sell power directly to end-users and phasing out of Taiwan Nuclear power plants by 2026 to increase the share of renewables.
- Taiwan government also amended The Renewable Energy Development Act on 12th April 2019, whose main incentive is the fixed tariff for a period of 20 years of power purchase from offshore wind.
- With ongoing wind installed capacity, Taiwan generated 1.7 TWh of electricity in 2018, contributing one-third of the electricity generated by renewable sources.
- With projects like Chan Fang and Xidao offshore wind farms, adding a capacity of more than 500 MW, a significant leap in the growth of wind energy can be witnessed in the forecast period.
- The upcoming projects and visionary policies of the Taiwan government are expected to drive Taiwan towards one of the leading countries in wind energy, especially in the offshore wind energy market.
Competitive Landscape
The Taiwan wind energy market is partially fragmented. Some of the major companies include Vestas Wind Systems A/S, Siemens Gamesa Renewable Energy SA, Taiwan Power Company, Oersted A/S, WPD Onshore GmbH & Co KG, and others
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