94 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 43 | 2025 Opportunities and challenges for Taiwan’s offshore wind energy infrastructure Muzammil Jawed Taiwan’s ambitious energy transition relies heavily on a build-out of offshore wind to reduce dependencies on imported fuels and mitigate geopolitical risks. This article examines development and financing aspects of the offshore wind sector, analyzing opportunities, challenges, and international benchmarks. It argues that regulatory initiatives, investing in transmission and storage, and building international partnerships are instrumental in achieving the ambitious targets. Offshore wind represents a critical opportunity for achieving long-term sustainability and energy security. Introduction Taiwan is one of the most energy-dependent places in the world, importing 98% of its energy (U.S. Department of Commerce, 2024). Taiwan’s complex and uncertain geopolitical situation and a global shift toward greener energy make energy security and consequently energy independence top priorities for the island. However, the critical challenge facing Taiwan is how to build this sustainable, self-sufficient energy infrastructure in the face of various hurdles. Taiwan’s energy mix is heavily reliant on commoditized fossil fuels (Stalmans, 2024). In 2023, oil and petroleum products comprised 43.7% of Taiwan’s energy sources, followed by coal at 28.8% and natural gas at 20.2%. Nuclear energy contributed 3.9%, while solar, wind, and hydro accounted for a mere 1% each. This composition underscores Taiwan’s vulnerability to global energy market fluctuations and the urgent need for diversification and sustainability in its energy portfolio. The electricity generation sector, a crucial component of Taiwan’s energy landscape, has a particularly high dependence on coal and natural gas. Coal-fired power plants generate 42% of the electricity, with natural gas following closely at 40%. Renewables and nuclear energy play smaller roles, contributing 10% and 6%, respectively (Lin, 2024). Yet significant changes are underway for Taiwan’s energy. The 2024 election of President Lai Ching-te marked a pivotal moment in Taiwan’s energy journey— including expanding offshore wind and solar, reforming energy markets, and attracting more foreign investment through competitive, market-based mechanisms. The push for renewable energy is at the forefront of Taiwan’s energy strategy. The government has set aggressive targets, including 5.7 GW of offshore wind capacity for 2025 (Norton Rose Fulbright, 2024). These goals are ambitious, especially considering that by the end of 2023, only 10% of the offshore wind target was achieved. Repeated delays and limited government transparency around planning and regulation slow progress. There have been consistent changes to the government targets, unclear timelines for environmental assessments, and opaque decision making in the project auctions that have created uncertainty and redundant costs. Nevertheless, the targets highlight Taiwan’s commitment to reducing its carbon footprint and enhancing energy security. Taiwan has used the European energy transition as a reference for formulating its own energy policies. One example is Taiwan’s bilateral relationship with Germany, which started in 2015 through a jointly held Green Energy Policy Forum (Ministry of Economic Affairs, R.O.C., 2023). During the Martindale cohort’s in-person discussions, the Taiwan Sustainability Hub highlighted Taiwan’s focus on developing renewable energy with European counterparts, like Germany, and then working with them to export any additional energy to foreign markets, e.g., in Africa. The current geopolitical situation is uniquely complex. Ongoing tensions with mainland China pose persistent risks to maritime trade routes, which are essential for the steady and reliable import of liquefied natural gas, coal, and oil. With nearly all imports passing through contested waters, any crossstrait conflict could threaten China’s access to energy supplies. Moreover, Taiwan is excluded from most international organizations and regional energy cooperation frameworks. This exclusion hinders its doi:10.18275/pbe-v043-013
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