96 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 43 | 2025 ages overconsumption but does not reflect the true cost of renewable energy. Industrial users pay a standard rate of NT$4.27/ kWh (~$0.144/kWh). However, large electricity users, namely those in the semiconductor, petrochemical, and steel industries, are subject to time-of-use pricing, with peak rates several times higher than off-peak rates (up to NT$10.20/kWh in summer versus NT$2.39–NT$2.61/kWh off-peak) (Yang, 2025). Taiwan’s industrial energy demand is expected to grow significantly due to energy-intensive sectors like AI and data centers. The need for electricity pricing reforms is discussed later. Offshore wind energy Taiwan’s journey in offshore wind development started with its first offshore wind farm, the Formosa 1 project. It became fully operational in 2019 with a capacity of 128 MW, serving over 128,000 households (Green Investment Group, 2020). Supported by Formosa 1’s success, the government launched a large-scale offshore wind power development initiative in 2018, allocating 5.5 GW of capacity through a combination of selection and bidding. This initiative attracted major international developers drawn by Taiwan’s commitment to large-scale offshore wind (Open Access Government, 2023). Projects, such as Formosa 2, Changhua, and Zhong Neng, highlight the rapid growth as well as the challenges of securing grid capacity and financing (Copenhagen Offshore Partners, 2024; Northland Power, n.d.; Power Technology, n.d.). By the end of 2023, 283 offshore wind turbines had been installed, equating to a total capacity of 2.25 GW (Ministry of Economic Affairs, R.O.C., 2024), putting Taiwan on par with only a few countries surpassing 2 GW of offshore installations. Looking ahead, President Lai’s government in 2024 outlined ambitious plans to revamp Taiwan’s energy composition. The 2030 goal is 30% renewable energy, with offshore wind playing a crucial role. The near-term targets for offshore wind capacity are to reach 5.6 GW by 2025 and add 7.5 GW between 2026 and 2030 (~1.5 GW per year), bringing the total capacity to 13.1 GW by 2030 (Norton Rose Fulbright, 2024). The longer-term plans are even more ambitious, aiming for an additional 15 GW of capacity between 2026 and 2035 and a strategic goal of 45–50 GW by 2050. These targets are based on an assumed offshore wind capacity factor of ~35 GW (en:former, 2024). To support this growth, the government is investing in offshore infrastructure, including dedicated wind power ports, transportation facilities, and power grids (Open Access Government, 2023) alongside policies to attract investment, promote technological innovation, and drive renewable energy growth. However, challenges remain: environmental impact assessments, fisheries compensation schemes, and infrastructure and supply chain improvement (Norton Rose Fulbright, 2024). The government is working to address these issues through various initiatives and collaborations with industry partners. As Taiwan continues its energy transition, offshore wind is poised to play an increasingly significant role. With projects like Formosa 2 (376 MW) and Formosa 3 (up to 2 GW) in development (Green Investment Group, 2020), Taiwan is well on its way to becoming a major player in the global offshore wind market, driving its ambitions for a greener, more sustainable energy future. Legal framework Taiwan’s electricity market is guided by four acts: the Climate Change Response Act, Energy Administration Act, Electricity Act, and Renewable Energy Development Act. Table 2 summarizes their main characteristics and stakeholders. Together, these laws set the groundwork for promoting renewable energy development and support market liberalization. Importantly, the Electricity Act has enabled renewable power generators to sell directly to consumers via PPAs, which has reduced Taipower’s monopoly while encouraging private investment. The Climate Change Response Act also supports this framework by mandating carbon reduction and supporting the expansion of carbon capture and negative-emission technologies. Financing the offshore wind energy transition This section analyzes the financial aspects of Taiwan’s offshore wind development, focusing on the sources and structures of their funding from both from a project-level and a market lens. Context and sources The 2025 offshore wind capacity target of 5.7 GW will require close to NT$1 trillion in investments (Ministry of Economic Affairs, 2019), creating ~20,000 jobs. Moreover, the additional 15 GW planned by 2035 would cost another NT$2.63 trillion, based on extrapolation from the 2025 investment requirement. This is by no means a small sum, and the government’s commitment to renewable energy has led to a diverse mix of capital sources
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