By Tim Ferry

Progress on renewable energy development is slow, but green energy advocates are more optimistic than ever before that Taiwan can live up to its potential as a green-energy hub. “There is now a strong determination to make this work,” wrote Bart Linssen, managing director for German wind power turbine maker Enercon Taiwan, in an email. “We are very confident about the Taiwan market.”

The government has ambitious goals for renewable energy. It seeks to have 20GW of installed solar capacity and 3GW of installed offshore wind capacity by 2025, together meeting 20 percent of Taiwan’s power needs. Yet nearly a year into the Tsai Ing-wen (蔡英文) presidency, Taiwan has yet to see even 1GW of installed solar capacity. In addition, none of the Tier 1 (over 500kW) ground-mounted systems planned for select regions of rural southern Taiwan have been approved by the government, leaving Taiwan a long way from the additional 1.4GW of installed capacity targeted for mid-2018, much less the eventual 20GW.

Regulatory holdups, complicated applications requiring approvals from both central and local governments, and complex land deals are all delaying solar-power development, as is pushback from agricultural groups in direct competition for the limited available land. Environmentalists are also opposing the use for solar power development of land contaminated by salt water, saying this “wasteland” is actually salt marshes that provide vital habitats for rare migratory birds, including the black-faced spoonbill.

Offshore wind projects have finally started with the successful recent installation of two Formosa 1 pilot wind turbines in the waters off Changhua County, yet further projects are developing slowly. Onshore wind has not seen significant expansion since a series of violent protests over wind farms located near homes in rural Miaoli tarnished its image. The perception was created that Taiwan’s current 700MW of onshore wind power is as much as the island can tolerate.

Yet K.H. Chen (陳坤宏), CEO of Taiwan’s largest domestic solar power developer, Sinogreenergy, is taking the delays in stride. “This is all just the learning curve,” he says confidently, though admitting that his investors, Swiss-based Partners Group, which is putting US$200 million into Sinogreenergy to develop 150MW of solar power in central and southern Taiwan, are surprised at the slow pace. “I don’t think land is actually the issue,” he says. “We need to find the general SOP to get these projects approved.” Chen forecasts that Taiwan’s total solar power installed capacity will reach 3-4GW in the next three years.

Linssen is likewise sanguine about the present delays. Despite the attention that offshore wind has received in recent years in Taiwan, “onshore wind is now very much back on the agenda,” noted Linssen. “That is the reason we chose to have our regional center for Asia here for sales and service. We will now also add a procurement center in Taiwan. Enercon will be buying local products for its global supply chain.”

Enercon’s plans for the local market dovetail exactly with the Tsai administration’s goals of expanding the green energy industry by developing home-grown projects. Huge local demand would make Taiwan a desirable market for large international renewable energy builders and investment firms, prompting the development of local supply chain partners, technology transfers for local manufacturers, and employment for local technicians, installers, and engineers.

To spur the industry along, the administration has set aside NT$1 trillion (US$33.6 billion) for green energy development over the next 10 years, and under the auspices of the 5+2 Innovative Industries plan is establishing an R&D center in Tainan to focus on green energy development.

Recently passed amendments to the Electricity Act now allow green energy providers to sell their power directly to consumers (although most green energy suppliers had reservations about the efficacy of that amendment), and National Development Council Deputy Minister Kung Ming-hsin (龔明鑫) says that the government will propose revisions to several more laws and regulations to ease the development of renewable energy in Taiwan.

The key factor explaining the optimism surrounding green energy in Taiwan is not the rate of current progress, but rather belief that finally, the government is solidly behind the industry.

“If the government is firm and clear in its goals, industry will be very willing to join us in the development,” says Kung, noting that international investment firms are increasingly looking for opportunities in the Taiwan market for renewable energy. “We need to create opportunities for those companies that are willing to transform. The time for Taiwan’s transformation is already overdue.”

The News Lens has been authorized to repost this article. The piece was first published by Taiwan Business TOPICS.

(Taiwan Business TOPICS is published monthly by the American Chamber of Commerce in Taipei.)

TNL Editor: Edward White