Detailed industry report based on a large number of international and domestic studies, including Taiwan energy status, government regulation, key market players and supply chain, analyzed risk assessment and future trends by SWOT and PESTEL.
4. 2018 TAIWAN ENERGY STATUS
Coal
Natural Gas Renewable
Others1
2
3
4
5
Nuclear
Power
Generation
Import Energy 98%
Fuseli Fuel of Import 93%
Installed Capacity 5,268
GW
Total Power Generation
273.6 Twh
Energy consumption
86.83 million KLOE
Energy intensity
5.16 LOE/Thousand $NTD
*Others including pumped-storage
hydroelectricity and oil-fired gener
5. RENEWABLE ENERGY TRANSFORMATION BY 2025
Coal Green NuclearGas
Decrease Coal
• Decrease power
generation from 46% to
27%
• Maintain present
power plants
• Improve air pollution
control
Increase Green
• Increase power
generation from 5% to
20%
• Raise solar
photovoltaic(PV)
capacity to 20GW
• Raise wind energy
Decommission Nuclear
• Drop power generation from
10% to 1%
• Decommission No.1 nuclear
reactor
• Phase out No.2 and No.3
nuclear reactors
• Abolish No.4 nuclear reactor
Increase Gas
• Increase power
generation from 35% to
50%
• Raise capacity to 12GW
• Install liquefied natural
gas(LNS) and power
plants
6. MARKET SIZE
Job Opportunities
Accumulated more than 20,000
job opportunities
Bureau of Energy, Ministry of Economic Affairs
expected benefits of offshore wind of 5.7 GW
target in 2025
Total Investment
Accumulated investment of
NT$1 trillion in total investment
Related Manufacturing
Industry
Annual output value of related
manufacturing industry reached
RMB 121.8 billion
Related Services
Annual output value of related
services reached RMB 77.3 billion
Total operating value
Total operating value of 20 years of
operation and sales reached
RMB 700 billion
Power Generation
Annual power generation
reached 21.5 billion kWh
8. GOVERNMENT REGULATION
Phase 1 Phase 2 Phase 3
Reward Demonstration Potential Development Section Development
238MW
• 8 MW
Officially operated 2
demonstration wind turbines in
2017/4/28 in Miaoli
• 120 MW
Completed first wind farm in
2019/5/18 in Miaoli
• 110 MW
Will complete second wind farm
by 2020 in Changhua
5.7GW
• Selected 3,836 MW:
a total of 7 developers, 10
wind farms.
• Bid for 1,664 MW:
a total of 2 developers and 4
wind farms. (NT$2.2~2.5
per kwh)
4.8GW
Since the EPA has passed the
10.5 GW EIA review in 2016,
the previous 5.7 GW has been
deducted, and 4.8 GW can be
promoted. It is expected to be
promoted as suppliers
become more stable.
9. Offshore wind power is an emerging cross-sector industry.
Taiwan is currently lacking talents. In the early stage,
Taiwanese manufacturers learned about foreign manufacturers'
technology through international cooperation and had the
opportunity to cut into the industrial supply chain.
Pre-Development (1-5 years)
Financial financing, Legal personnel, International
Public relations, Electrical engineers, Mechanical
engineers, Environmental safety and health, Land
Wind Power Development Industry
Installations (1- 2 years)
Electromechanical integration engineer, Process
engineer, Project management supervisor, Salesperson
Wind Power Manufacturing
Operation and Maintenance (20 years)
Project management supervisor, Electromechanical
integration engineer, Construction engineer, Motor
technician, Ship operator, Mechanical engineer, Civil
engineer, Comfort manager, System management
engineer, Central control technician, System
management engineer, Central control technician;
Blade maintenance engineer , technical staff,
Salesperson, Data analysts, Information engineers,
Logistics personnel
Wind power service industry
SKILLED LABOUR
10. PROTECTIONISM (FIT)
The first 3.5GW ofTaiwan’s offshore wind sector is
being developed under the FIT program – in which
developers are guaranteed a subsidized rate for
the power they generate over the course of a long-
term Power Purchase Agreement (PPA).
The offshore wind FIT was set at NT$5.5 (US18
cents) per kilowatt hour (kWh) for a 20-year PPA,
compared to as low as US7.2 cents in the UK.
China, which already has 2.8 GW of offshore wind
installed in theTaiwan Strait off the coast of Fujian,
has reduced its FIT rates to the equivalent of US12
cents per kWh.
12. Ørsted
The Ørsted vision is a world that runs entirely on green energy.
Ørsted develops, constructs and operates offshore and onshore
wind farms, bioenergy plants and provides energy products to its
customers. Ørsted is the offshore wind market leader as its 25%
market share. Headquartered in Denmark, Ørsted employs 6,300
people. Ørsted’s shares are listed on Nasdaq Copenhagen (Ørsted).
In 2018, the group’s revenue was DKK 76.9 billion (EUR 10.3 billion).
CIP
Copenhagen Infrastructure Partners is a fund management company
founded in 2012, which currently has four funds and around EUR 6.8
billion under management. Our current investments include a wide
range of energy infrastructure assets including offshore wind,
onshore wind, offshore power transmission, biomass and energy-
from-waste, and solar PV investments. CIP focuses on Europe, North
America and EastAsia (Taiwan).
INTERNATIONAL MARKET PLAYERS
13. Swancor
Primarily a manufacturer of fine chemicals, is among Taiwan’s
wind-power players, having entered the industry first as a maker of
for wind-turbine blades and then forming Swancor Renewable in
directly involved in Taiwan’s nascent offshore wind sector.
The decision to reduce its stake in the market is particularly
Formosa 1, Phase 2 wind farm is set to be commissioned by year’s
will begin earning income for its owners based on a subsidized rate
power it generates.
Swancor has been involved in three major offshore wind
called Formosa 1, 2, and 3. The company was the original
Formosa 1 project, Taiwan’s first, but in 2017 sold large stakes to
Macquarie, leaving it with only 15% of the project.
NATIONAL MARKET PLAYERS
14. Marine
Team
Wind
Team
13 Machinery Manufacturers
CSC,CSMC, Formosa Heavy Industries,
Energy, Atech Composites, Boltun, Chunyu,
Rong Yuan, Yjfcasting,TCS,GJSI,
Sanengsteel
9 Motor Manufacturers
TECO, Tatung, Shihlin Electric, Delta
Fortune Electric, Ta Ya Electric Wire & Cable,
Electric, Walsin, Nan Ya
4 International Wind Turbine
Systems Companies
GE, Hitachi,
SGRE (Siemens Gamesa Renewable Energy),
MVOW (Mitsubishi Vestas Offshore Wind)
1 Organ Of The Corporate Body
Metal Industries R&D Center
China Steel Corp (CSC)
joins with 27 firms to establish Wind-Team
China Ship Building Corporation (CSBC)
joins with 35 firms to establish Marine-Team
In 2017, Taiwan's offshore wind turbine equipment investment amounted
to NT $4.5 billion, with an output value of NT $ 1.27 billion, mainly
supplying blade raw materials, ships, towers, steel structures and
components.
COMPONENT SUPPLIERS
24 Companies
CSBC, CSC, Csebulk, Chunghwa Telecom,
TOWSC, Swancor, Woenjinn, Hunghua,
Hwachi, TMHI, AWEC, OPENGOVTW,
Tipcmarine, DACC, PFEC, Ntpcasm, Max
Seair Logistics, Yu Pin shipping, Maxmart,
TCCY, 銓日儀, Seagreen, Ruentex Materials,
CSBC Coating Solutions
2 Consultant Company
Sinotech Engineering Consultants, CECI
Engineering Consultants
6 Research Institution
Metal Industries Research and Development
Centre, SOIC, COMC of NCKU, ITRI, Sinotech
Engineering Consultants, Taiwan
Construction Research Institute
1 Certification Body
CR Classification Society
2 Financial Institutions
Mega International Commercial Bank, Bank
SinoPac
16. S W
O T
SWOT ANALYSIS
• The industry has not yet sprouted. If it
becomes an offshore wind turbine supplier,
its production process must be certified by
the system vendor, and the industry needs to
be built.
• The offshore wind power industry needs to
invest a lot of money and face competition
from the world's big manufacturers.
• There is a lack of wind turbine testing and
verification platform inTaiwan, and there is
no running performance of components.
• Raw materials, capital communication, metal
product components etc. has been cut into
the international supply chain, available for
immediate domestic offshore wind turbines
should be used.
• Experience in the development of large-scale
wind turbines in the land area, the offshore
wind turbine should be in volume production
demand.
• The localization of components can reduce
transportation and maintenance costs.
• In 2023, the cumulative capacity of offshore
wind power in the world reached 78GW, and
Asia accounted for 47% (China, Japan and
Korea)
• Taiwan has an excellent offshore wind farm.
The wind farm installation aims to complete
520MW in 2020 and completed 5.7 GW in
2025.
• Global blade, tower and submarine pedestal
have a high proportion of geochemistry,
reducing transportation costs
• China, Japan and Korea are actively cultivating
the offshore wind turbine industry and are the
main competitors in the future.
• The offshore offshore wind turbine technology
is mature, the supply chain forms a clustering
effect and cooperates with the wind farm in
the local component factory.
• The top 5 foreign wind turbine system
manufacturers monopolize 85% of the world's
offshore wind farms.
Strengths Weaknesses
Opportunities Threats
17. P
E
S
PESTEL ANALYSIS
• Green energy is included as one of the strategic industries for development as
Part of theTsai administration's 5+2 Industrial Innovation program.
• The current legal-binding renewable expansion targets only reach 2025, and
carbon emission targets 2030. After that, it is still uncertain howTaiwan will
evolve to a deeply-decarbonized society by 2050.
• The increase in NTD 0.3 per degree was predicted on the total at 42GW of
the power supply. It means that the country will spend more around NTD
110 billion (USD 3.3 Billion) per year; therefore, the plan has been criticised
by many since the 20 years' wind power supply plan will cost the people of
the country around NTD 2,200 billion of extra money (USD 70 billion).
• Excellent wind conditions that allow offshore wind to compete on
cost.
• Good market design with a feed-in tariff that attracts new market
entrants and has ample volume, and supporting infrastructure
build-out programme including grid connections.
• The EIA process and the grid award conclude as planned and bring
significant volume to the market.
18. T
E
L
PESTEL ANALYSIS
• Based on the protection of the Earth’s environment, although the
cost of offshore wind power construction is relatively high at this
stage, in recent years, with mature technology in place, experts
predict that the costs per degree of offshore wind power in Asia
will be less than NTD 2 dollars.
• NGOs concern about the impact on the migration of migratory birds and the
restrictions on fishing activities
• However, it had also been suggested that the agglomeration effect of the
foundation of the turbines based on the seabed may have a positive effect on
the increase in catches.
• To promote the development of renewable energy, the Renewable
Energy Development Act and related regulations all encourage the
establishment of enterprises engaging in renewable energy-based
power generation and sales enterprises through a variety of
incentives.
20. • The market outlook for the global wind industry is
positive. Over the next five years, GWEC Market
Intelligence expects that over 300 GW of new
capacity will be added.
• That is more than 55 GW of new installations each
year until 2023.
• Near-term, governmental support (auction/ tender
programmes and renewable targets) are still a main
driver for installations.
• For the near-term, the price pressure will not be as
severe, but will continue to exist as a key element to
mature the wind industry.
GLOBAL WIND ENERGY EXPECTATIONS
21. • In South-EastAsia (including Indonesia, Philippines,Thailand,
Vietnam Malaysia, Laos, Myanmar and other smaller markets)
the rising demand for energy is driven by economic growth,
growth of population and increased urbanization.
• The fundamentals for wind energy are good to play a leading
part.
• Governments in South-EastAsian markets have set targets
for wind energy deployment (e.g.Vietnam with 800 MW by
2020, and Philippines with 1.5 GW by 2030).
• As of December 2018, 1.5 GW of onshore wind capacity was
installed in total andGWEC Market Intelligence expects more
than 4 GW new capacity to be installed by 2023 thus
contributing to the growth. of the Asian wind market.
ASIA PACIFIC DEVELOPMENT
22. • For the first time, China installed and connected more offshore
capacity (1.8 GW) than any other country.The United Kingdom
took the second place with 1.3 GW and Germany third place with
0.9 GW.
• AsiaChina accounted for the highest proportion of new
installations in 2018, both offshore (40%) and onshore (45%).
• Governments of South-East Asian markets likeVietnam and the
Philippines have set targets for wind energy deployment to
increase installations.
• Indonesia and Thailand have plans in place to decrease reliability
on nuclear energy and fossil fuels.
ASIA PACIFIC DEVELOPMENT (Continued)
24. Given all this,Taiwan is not only relatively well positioned
to secure its place as the regional hub for offshore wind
development in the Asia Pacific — or at the very least East
Asia — the country is also likely to be one of the world’s
leading offshore wind countries by 2025, and maybe even
earlier.
With strong governmental support, not to mention
favorable wind conditions and locations,Taiwan is tapping
into a market with massive potential for growth, and one
that could remake the global energy landscape.
CONCLUSION
25. 1. Bureau of Energy, Ministry of Economic Affairs 107年全國電力資源供需報告
https://www.moeaboe.gov.tw/ECW/populace/content/ContentDesc.aspx?menu_id=6985
2. Industrial Technology Research Institute 20190425_能源轉型行不行?台灣能源轉型的挑戰
https://www.slideshare.net/DoEnergy/20190425-143184993
3. Industrial Technology Research Institute REN21發佈2019年再生能源全球現況報告--太陽光電與風力發電_周桂蘭
https://www.slideshare.net/DoEnergy?utm_campaign=profiletracking&utm_medium=sssite&utm_source=ssslideview
4. Bureau of Energy, Ministry of Economic Affairs 【離岸風電】問答集
https://www.moeaboe.gov.tw/ECW/populace/infographics/Infographics.aspx?menu_id=2828&info_id=26
5. https://udn.com/news/story/7238/4101063
6. https://www.moeaboe.gov.tw/ECW/populace/infographics/Infographics.aspx?menu_id=2828&info_id=27
7. https://energypedia.info/wiki/Energy_Transition_in_Taiwan#Renewable_Capacity_Expansion_Plans
8. https://orsted.com/
9. http://cipartners.dk/
10. https://www.moeaidb.gov.tw/ctlr?PRO=policy.rwdPolicyView&id=5614
11. https://energywhitepaper.tw/upload/201711/151115554850570.pdf
12. https://www.lexology.com/library/detail.aspx?g=d78ac5fd-cd61-4c49-b395-8fb2ea5da35d
13. https://gwec.net/wp-content/uploads/2019/04/GWEC-Global-Wind-Report-2018.pdf
REFERENCES