101 MARTINDALE CENTER FOR THE STUDY OF PRIVATE ENTERPRISE Recent amendments to the Electricity Act facilitate trade among retailers of renewable energy, permitting transactions between renewable energy merchants instead of limiting sales solely to end consumers. This change is positive for offshore wind: Developers can sell varying levels of their output directly to corporate buyers (via CPPAs) or retailers, instead of relying solely on Taipower, adding flexibility that can lead to more efficient pricing and expanding the offshore wind power market, similar to the Germany model (discussed previously). In addition, other Electricity Act amendments created a new category, Specific Electricity Supply Operators, to control new power resources. These operators can now legally act as participants in trading platforms for energy delivery and storage, which include demand–response mechanisms and grid-connected energy storage systems. To facilitate regulatory oversight and improve grid stability and dependability, they must also meet operational and emergency reporting requirements. Offshore wind developers, specifically those simultaneously building battery storage platforms, could collaborate with these operators to optimize power delivery during peak times, thereby increasing revenue and grid stability. Despite the market improvements, further changes are needed to the current electricity pricing structure. While the structure controls inflation, it poses a barrier for the accelerated build-out of offshore wind. Low and subsidized rates increase financial risks for renewable energy developers and provide little reason for end users to pay a premium for guaranteed renewable energy supply. Residential rates remain fixed and subsidized, while industrial consumers are subject to time-of-use pricing, which approximates price variations but fails to fully capture the marginal cost of production, creating significant distortions. A transparent and cost-reflective pricing framework would allow offshore wind developers to store energy during off-peak periods and sell during peak periods, improving their profitability. Taipower has started building large-scale storage projects, such as the 20-MW energy storage system in Tainan’s Salt Field Solar PV Farm (Taiwan Power Company, 2025b), and Taiwan aims to reach 590 MW of battery storage capacity by 2025 (U.S. Department of Commerce, 2021) through public and private initiatives. These projects are key to integrating offshore wind into the grid. Better pairing between offshore wind and storage not only smooths power delivery but also likely will create revenue opportunities via energy arbitrage and storage services. Time-of-use pricing offers some flexibility for industrial users, but the current pricing structure masks true costs of clean energy development. Electricity pricing reform is crucial to Taiwan’s pivot from subsidies and FiTs to a market-based model. Conclusion Taiwan, one of the most energy-dependent economies in the world, is heavily reliant on imported fuels; at the same time, it is exposed to a complex geopolitical situation. The government’s ambitious energy transition goals, primarily with offshore wind, are both a response to the political economic vulnerabilities and an alignment with the global emphasis on decarbonization. Despite significant progress in attracting foreign investment in offshore wind infrastructure, several challenges persist: regulatory uncertainty, project delays, limited land availability, and grid modernization. Moreover, Taipower’s dominance discourages market liberalization and innovation, although this hesitancy is gradually changing for the better. The geopolitical status cannot be ignored. Taiwan is excluded from many international energy cooperation bodies and faces an ever-present risk of crossstrait confrontation with mainland China, underscoring the demand for domestic energy generation, primarily through renewables. Offshore wind holds promise for Taiwan’s energy future as well as further aligning, through investment, the island’s allies. Taiwan’s energy future will depend on its ability to address four critical areas. First, the government can accelerate project delivery by simplifying regulatory procedures and enhancing the transparency of government processes and decisions. Second, Taiwan should foster greater public–private cooperation and leverage international partnerships for investment. Third, the grid’s infrastructure and market design need updating to accommodate greater shares of variable renewables while maintaining reliability and affordability. And fourth, Taiwan must balance energy security with sustainability, ensuring that progress simultaneously reduces carbon emissions and mitigates geopolitical risk. Taiwan’s energy transition is both a challenge and an opportunity. If successful, it can set an example for energy-dependent nations facing the dual imperatives of energy security and sustainability. The coming decade will show whether or not Taiwan can realize its vision for a greener and more resilient energy future.
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