Surfacing Taiwan’s Geothermal Power Potential

Baseload's Westlake geothermal power plant, located in Hualien County, is expected to produce around 2MW of geothermal energy once completed. Photo: Baseload Power Taiwan

With new technology and investments, geothermal power could become a viable energy source in Taiwan – as long as regulatory hurdles are overcome.

Given Taiwan’s location on the Pacific “ring of fire,” its potential for geothermal energy has long been recognized. With more than 4,000 hot spring sites on the island, there is plenty of water to bring geothermal heat to the surface. In some localities, the springs are so hot that tourists bring eggs to hard-boil in hot water bubbling right out of the ground.

However, recognizing the potential does not ensure the ability to harness that potential for electricity. Until very recently, attempts at generating power from geothermal energy have all failed. Attempts in the 1980s by the state-run Taiwan Power Co. (Taipower) ended in a marginal plant that lost productivity over time due to pipe corrosion and silt blockage. Further efforts were cursed with uncertainties ranging from soil acidity to opposition from indigenous peoples holding land rights to some of the most promising sites for geothermal energy. For decades, Taiwan was resigned to treating its geothermal resources as a source of recreation in the form of hot springs rather than an energy resource.

But that did not stop Swedish firm Baseload Capital from establishing independent power producer Baseload Power in Taiwan in 2019. “We see Taiwan as a greenfield country with a lot of potential but not a lot of developers,” says Van Hoang, chairman and CEO of Baseload Power Taiwan. “While it has been tried and abandoned in the past, the technology has advanced a lot since then, and Baseload is bringing in technology that has been proven abroad.”

Baseload’s 1.2MW geothermal power plant in Iceland was constructed in just 10 months, and the company has two smaller demonstration projects in Japan.

“The potential of geothermal to provide power is limitless if we can go deep enough,” says Hoang. “The core of the earth is as hot as the surface of the sun.”

However, the deeper the drilling, the more expensive and complicated the operation becomes. Hoang notes that for its first projects, Baseload is focusing on shallower sites, defined as less than 2,000 meters deep.

“We now have the technology to extract energy from water as low in temperature as 100 to 120 degrees, whereas more traditional geothermal requires temperatures in the range of 150 to 200 degrees,” he says.

Unlike wind and solar energy, where it is comparatively easy to gauge a site’s potential prior to construction, there is an element of risk in drilling a geothermal well. “Geothermal is more like prospecting for oil,” says Hoang. “Not every well you dig is going to yield.”

The company’s first well, in Hualien County’s Hong Yeh village, took almost a year and more than an eye-watering NT$100 million to drill. Luckily, the well found both heat and water – the necessary components for a successful plant – at 1,263 meters. Once Baseload’s geothermal power station is completed and joined to the grid, Taipower will offtake the energy produced from the Hong Yeh site and feed it to homes and businesses around the island.

Hoang notes that while Baseload encountered unexpected issues in Taiwan, these were regulatory rather than geological in nature.

“People talk about soil acidity or other geological uncertainties,” he says. “Well, different technical challenges exist in every country for geothermal, and we are prepared to overcome them. What we are asking from the government are less regulatory hurdles and more support.”

Geothermal currently receives a feed-in-tariff (FIT) from Taipower of NT$5.8 per kilowatt-hour, the highest of all renewables. However, Hoang notes that the rate is still 80% lower than what Japan offers. In addition to more direct support, Hoang calls on the government to cut red tape for developers.

For example, in most countries it is standard to be able to drill continuously, but in Taiwan drilling can only be done during the daytime. Local authorities are also relatively unfamiliar with geothermal power, often trying to apply laws put in place to regulate the hot springs industries, which operate at significantly different scales and purposes than geothermal.

Taiwan’s more than 4,000 hot springs sites, including those in Yangmingshan National Park (pictured here), are a testament to its potential for producing geothermal energy. Photo: Wikipedia

Hoang estimates that Baseload’s first well in Taiwan, which took almost a year to drill, might have taken as little as six weeks in Iceland. “Of course, COVID was a factor,” he says. “We hope that the next well we drill in Taiwan will only take three to four months.”

Two wells are necessary for a successful geothermal power plant, notes Hoang; one to bring up the hot water, and a second to return it to the aquifers, where it can be heated up by the earth again. “We take nothing but the heat,” he says.

But while that water is up on the surface, other applications could create win-win solutions for local residents, including the indigenous Truku and Bunun peoples.

“They are curious about the job opportunities, including recreational business possibilities,” says Hoang, “there are many examples of geothermal power companies partnering with recreational spa businesses, like the Blue Lagoon in Iceland.”

Once a wastewater pool for a geothermal power plant, the Blue Lagoon has been developed into one of Iceland’s top tourism attractions, with holidaymakers flocking to the spas and pools for the mineral properties of the water. Given the Taiwanese enthusiasm for mineral spas, geothermal plants can become “an engine for growth” in east Taiwan, where most of the promising sites are distributed, says Hoang.

Despite the promise of geothermal, Taipower’s Vice President Hsu Tsao-Hua says the company is not counting on it to contribute to the country’s 2025 goal for 20% renewables.

“While it is true that the potential of geothermal is immense, tapping into that potential has proved to be problematic for us in the past,” says Hsu. “While we are not giving up on geothermal, we are concentrating most of our efforts on solar and wind, the development of which entails a lot less uncertainty.”

Hsu cites the example of Taipower’s geothermal demo plants, which suffered from rapid loss of power over time as the pipes to bring up the water became clogged. Although independent power producers like Baseload say that the technology has improved since those pilot programs were launched, Hsu is not entirely convinced.

“The government has rewarded geothermal independent power producers with the highest FIT as we continue to investigate how to tap its potential,” says Hsu. “But we see it as having a longer time horizon while we rapidly ramp up renewables that are already proven to be effective.”

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