95 MARTINDALE CENTER FOR THE STUDY OF PRIVATE ENTERPRISE ability to participate in global energy security dialogue and formulate crisis response mechanisms— one of the main reasons Taiwan’s current energy policy prioritizes energy diversification and the pursuit of a greater renewable energy mix. Offshore wind is the cornerstone of this strategy, providing a domestic alternative to imported fuels, thereby reducing exposure to external geopolitical risks. This article argues that offshore wind development is integral to mitigating Taiwan’s energy and geopolitical risks but will require streamlined regulation, deeper market liberalization, and sustained domestic and foreign investment in grid modernization. Taiwan’s energy landscape In 2024, Taiwan generated 288.6 TWh of power, with renewables comprising just over 21 GW of installed capacity (Table 1), of which 18.5% came from wind. Offshore wind’s higher targeted capacity factor, the share of maximum potential output actually realized, compared to onshore highlights its critical role in providing reliable power alongside supporting grid stability. Table 1 Overview of Taiwan’s electricity sector Sources: Asia Wind Energy Association, n.d; Chih-yi et al., 2025; Parel, 2025; PwC Taiwan, 2025; Taiwan Power Company, 2025c. Taiwan’s electricity system has historically operated like a vertically integrated monopoly. Though the market is liberalizing, Taipower still dominates the entire value chain (generation, transmission, distribution, and retail), producing 68.4% of total electricity in 2024 while independent power producers supplied 31.6% (Taiwan Power Company, 2025a). Wind and solar independent producers are a growing share, but all producers still rely on Taipower’s grid for delivery. At the retail level, Taipower remains the primary supplier. However, under new market rules, private retailers are allowed to operate and purchase electricity from producers and sell to consumers under negotiated contracts. This practice is central to building a competitive offshore wind power market, with corporate buyers seeking direct access to renewable energy through power purchase agreements (PPAs) and corporate PPAs (CPPAs). The current electricity pricing mechanism creates a challenge for an economic conversion to a sustainable system. Residential rates are subsidized and set at NT$2.77/kWh, with a progressive tariff system charging higher rates for higher usage brackets. Price increases are limited as well: Households that consume less than 330 kWh/month might have rates increase 11% and 33% during rate increases, whereas those that consume more than 330 kWh/month have increases capped at 10%. This dual-purpose mechanism shields lower-income households and discourTable 1 Overview of Taiwan’s electricity sector Metric Value Notes Total power generation (2024) 288.6 TWh Total installed renewable capacity (2024) 21.067 GW Total wind capacity (2024) 3.91 GW Onshore wind capacity factor (2013) 28%–29% Targeted offshore wind capacity factor (2013) 33%–38% Average electricity rate (2025) NT$3.76/kWh Liquefied natural gas import price (2024) $554/metric ton Oil price Varies Includes hydropower, geothermal, solar, wind, biomass, waste-to-energy Progressive rates for residential with six tiers; highest reaching NT$8.46/kWh during summer Calculation: paid $11.92B for 21.5 million metric tons in 2024 Fluctuating due to volatile oil prices Sources: Asia Wind Energy Association, n.d; Chih-yi et al., 2025; Parel, 2025; PwC Taiwan, 2025; Taiwan Power Company, 2025c.
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