By Britti Paudyal

Taiwan is implementing an ambitious program of offshore wind development and has had to take some bold steps to make it happen. Meanwhile, the US aims to achieve similar goals.

When I began my education in Climate Science at Minerva University, an undergraduate program based in San Francisco that takes me to seven different countries over four years, I expected that my learnings in Cleantech advancements would be concentrated mostly in the US and in Europe. Flying over the wind-turbine-clad coasts of Taiwan, I realized that my Eurocentric misconceptions about the state of the renewable energy transition in Asia were unfounded. My semester living on the beautiful island of Formosa sparked my curiosity to learn more about Taiwan’s efforts in deploying wind to clean up its energy industry.

Taiwan, a strong US ally in Asia, boasts one of the world’s largest hardware industries and a population of 23.5 million who enjoy an exceptional (and carbon-rich) quality of life. The country has a carbon footprint of 12 metric tons of CO2 per capita, only slightly lower than the American average of 16 tons [1]. With regards to sustainability-related attitudes and climate action, the nation boasts incredible amounts of public green space, highly reliable and efficient public transport, and ranks second globally in residential recycling, only after Germany.

Despite these successes, Taiwan’s energy sector lags behind. With 98% of its energy coming from imported oil and gas from the Middle East, Taiwan faces the energy trilemma — a threat to energy security, affordability, and sustainability. Fossil fuels not only contribute to climate change and harm human health but also expose the isolated Taiwanese grid to significant risks of power shortages. Persistent tensions in the Gulf may manifest in shipment delays and supply shocks that could greatly impair Taiwan. Formosa is making strides toward cleaning up their energy industry considering these vulnerabilities and striving for greater energy independence [2].

Recognizing the potential for deep waters and coasts to harness wind power, Taiwan is leveraging the expertise of European wind developers to deploy multi-billion-dollar offshore wind projects up to 60 kilometers into the Taiwan Strait. Prominent off takers for these projects include TSMC, the world’s largest contract chipmaker and Taipower with 20-year guaranteed Power Purchase Agreement (PPA) contracted at a fixed rate. Major wind energy builder Orsted from Denmark developed the Greater Changhua 2b and 4 projects, totaling 920 MW, reported to be the world’s largest corporate offshore wind purchase power agreement [4] [3].

These undertakings have not come easy. To carry out offshore deployment, Taiwan undertook a risk-reward analysis, specific to their own situation. They have confronted barriers to implementation comparable to the US. In 2012, Taiwan enacted a comprehensive three-phase, 20-year “Thousand Wind Turbines Project” with a clear road map towards achieving 40-55 GW of offshore wind by 2050. Taiwan is amending its laws to allow wind farm construction up to 60 miles into deep waters, despite territorial risks from Beijing. Additionally, regulatory changes that allow foreign investors to own 100% of wind power stocks have been crucial to attract investment, accelerating the vast amounts of financing required for wind deployment [4,5].

There are many similarities between Taiwan and the US. President Biden aims to deploy 30 GW of offshore wind in the US by 2030, which presents significant opportunities to clean up the energy industry, create jobs, and spur investment across the supply chain. However, wind developers in the US face unique regulatory challenges. Although proposed wind energy projects total 18GW – over half the projected requirement to meet the 2030 offshore wind goals – the permitting process for wind construction on federally protected waters remains lengthy, burdensome, and ambiguous [6]. The Bureau of Ocean Energy Management (BOEM) follows a four-phase process for offshore wind construction, including planning (2 years), leasing (1-2 years), site assessment (5 years), and construction and operations (2 years). In total, this process takes at least 10 years [7]. Although the Biden administration introduced the National Environmental Policy Act (NEPA) Energy Permitting Reform to streamline the onerous federal, state, and local requirements for projects, these changes will take time to come into effect after the approval of the debt ceiling bill [8].

The Jones Act of 1920, a century-old law that requires only US-built, crewed, and flagged ships to transport cargo within the country, poses a unique obstacle to offshore wind projects [9]. Passed after World War I to protect the critically strategic US maritime industry, the law now hinders offshore construction by forcing project developers to charter from a pool of 32 turbine installation vessels under the EU flag at a rate of up to $180,000 a day and to perform logistical feats to avoid landing at US ports [10]. As an example of unforeseeable consequence, the Act has become a barrier to domestic and international trade, resulting in inefficiencies and missed opportunities for growth.

To install offshore wind turbines in deep waters, specialized vessels costing over half a billion dollars are required [11]. To avoid the restrictions of the Jones Act, Dominion Energy developed its own 14,000-ton steel vessel at a cost of $500 million to install the country’s first full-scale commercial offshore wind farm [11]. Between four and six additional specialized installation ships are needed to meet the 2030 offshore wind goal of 30 GW, which requires the construction of 2100 turbines [11]. Developers are hesitant to build these vessels due to their high cost and the need for constant demand over decades to recoup the initial investment. The Jones Act, along with the lengthy permitting and approval process of NEPA and BOEM, highlights the need for solutions to work around or adjust policies that impede offshore wind deployment.

Taiwan’s pipeline of 11 offshore wind farm projects totaling 5.7 GW by 2025 is a stark contrast to the United States’ mere two operational farms (Block Island Wind Farm in Rhode Island and the Costal Virginia Offshore Wind pilot facility in Virginia). Taiwan is achieving its goal thanks to its ambitious national targets, swift regulatory amendments, and willingness to collaborate with foreign developers such as Orsted, using vessels such as Seajacks Scylla, who deployed the 111 wind turbines for the Changhua 1 and 2a offshore farms (900 MW) [13,14]. The US has much to learn from Taiwan’s offshore wind success, which highlights the importance of integrating ambitious objectives and billions of dollars in funding with streamlined project approvals, permits, and regulatory changes to allow for efficient utilization of global industrial capacity or the development of domestic capability [12].

References

[1] Knoema . (n.d.). Taiwan Province of China CO2 emissions per capita, 1970-2022 – knoema.com. Knoema. Retrieved August 21, 2023, from https://knoema.com/atlas/Taiwan-Province-of-China/CO2-emissions-per-capita

[2] Hou, E. A. F., Jen-yi, & Hou, E. A. F., Jen-yi. (2020, April 27). Overcoming Taiwan’s Energy Trilemma. Carnegie Endowment for International Peace. https://carnegieendowment.org/2020/04/27/overcoming-taiwan-s-energy-trilemma-pub-81645

[3] Wu, S. (2023, May 10). Taiwan’s wind industry braves cross-strait risks in clean energy boom. Reuters. https://www.reuters.com/business/energy/taiwans-wind-industry-braves-cross-strait-risks-clean-energy-boom-2023-05-10/

[4] Davies, N., Julien, B., & Rebbapragada, A. (2020, October 30). Industry seeks to replicate Taiwan wind success throughout Asia | Global law firm | Norton Rose Fulbright. Www.nortonrosefulbright.com; Petroleum Economist – Energy Transition Newsletter. https://www.nortonrosefulbright.com/en/knowledge/publications/1f7442e2/industry-seeks-to-replicate-taiwan-wind-success-throughout-asia#section1

[5] Chiang, Y.-M. (2023). The Legitimacy and Effectiveness of Local Content Requirements: A Case of the Offshore Wind Power Industry in Taiwan. Springer Climate, 119–133. https://doi.org/10.1007/978-3-031-24545-9_8

[6] US DOE. (2022, August 16). Offshore Wind Market Report: 2022 Edition. Energy.gov; Office of Energy Efficiency & Renewable Energy. https://www.energy.gov/eere/wind/articles/offshore-wind-market-report-2022-edition

[7] Gov, B. (2020). The Renewable Energy Process: Leasing to Operations. https://www.boem.gov/sites/default/files/documents/renewable-energy/Leasing-Process_0.pdf

[8] Nilsen, E. (2023, May 24). What is permitting reform? The critical energy provision buried in debt-ceiling negotiations | CNN Politics. CNN. https://www.cnn.com/2023/05/24/politics/energy-permitting-debt-ceiling-climate/index.html#:~:text=Energy permitting reform could rethink

[9] Duncan, C. (2023, April 3). The Jones Act: How a 100-year-old law complicates offshore wind projects. Spectrumlocalnews.com; Spectrum News 1. https://spectrumlocalnews.com/nc/charlotte/news/2023/04/03/the-jones-act–how-a-100-year-old-law-complicates-offshore-wind-projects#:~:text=The current guidance on the

[10] Grabow, C., Manak, I., & Ikenson, D. (2018, June 28). The Jones Act: A Burden America Can No Longer Bear. Cato Institute. https://www.cato.org/publications/policy-analysis/jones-act-burden-america-can-no-longer-bear

[11] Shields, M. (2023). Supply Chain Road Map for Offshore Wind Energy in the United States. Www.nrel.gov; National Renewable Energy Laboratory.

[12] Hu, A. (2023, July 11). Biggest offshore wind farm in the US gets the go-ahead. Canary Media. https://www.canarymedia.com/articles/wind/biggest-offshore-wind-farm-in-the-us-gets-the-go-ahead

[13] Kuo, J. (2021). Taiwan Offshore Wind Farm Projects Update. Www.jonesday.com; Jones Day. https://www.jonesday.com/en/insights/2021/08/taiwan-offshore-wind-farm-projects-update

[14] Durakovic, A. (2022, April 1). First Turbine Stands at Greater Changhua 1 & 2a Offshore Wind Farm. Offshore Wind. https://www.offshorewind.biz/2022/04/01/first-turbine-stands-at-greater-changhua-1-2a-offshore-wind-farm/