Taiwan is easing offshore wind rules, but questions remain about how – and how far – the shift will go.
Has Taiwan removed its local content requirements for offshore wind? According to news headlines in November 2024, yes. But according to Anton Gao, professor at the Institute of Law for Science and Technology at National Tsing Hua University, the reality is more complex.
Gao and other experts caution that while Taiwan has promised to scrap mandatory localization rules in future offshore wind projects, lingering regulatory uncertainty and abrupt policy shifts continue to trouble investors.
For years, Taiwan tied its offshore wind ambitions to developing a local supply chain. From 2018, developers bidding for projects were required to meet localization targets – building turbines, foundations, and vessels with significant Taiwanese content – as either eligibility criteria or bid-scoring advantages.
The policy aimed to nurture local industries, but it also drew criticism abroad and proved challenging to implement. In July 2024, the European Union filed a complaint to the World Trade Organization, arguing Taiwan’s local content rules discriminated against foreign suppliers in violation of its WTO obligations.
By November, Taiwan yielded. It reached a settlement with the EU and committed to end mandatory local content requirements after the current auction round. Going forward, localization will no longer be a strict requirement for offshore wind tenders – at least on paper.
Gao argues that “nothing has really changed” in practice. According to the Taiwanese government, the European Union agreed to include an annex to Article 3.2 of the policy, stipulating that developers may use foreign-manufactured products if “the quality of domestic manufacturers’ products cannot meet the needs of developers” or if “domestic manufacturers cannot deliver on time.” A government official noted that Taiwan has already granted numerous exemptions to its mandatory localization requirements. However, the core issue, says Gao, lies in the process: the waiver procedure is lengthy and unpredictable, and there are concerns about unequal treatment of different developers.
Taiwan’s web of complex sub-regulations creates a challenging legal environment, undermining investor confidence and complicating project development, says Gao. His concern is that developers will remain wary of abrupt policy changes unless Taiwan reforms its rulemaking by anchoring policies in stable legislation.
Domestic companies have sometimes received informal leeway on localization (such as easier approval to use foreign installation vessels), while foreign developers faced stricter red tape. Such inconsistencies created an uneven playing field and eroded trust. The promise to relax local content rules in the future is welcome news to investors, but questions linger over how it will be implemented.
“Localization will be removed, but how exactly it will be removed is also unclear,” notes Marina Hsu, regional managing director of CISC, a service company owned by CIP-managed funds. CIP, or Copenhagen Infrastructure Partners, is Taiwan’s most heavily invested offshore wind developer. “It will not be mandatory, but the government will not want it completely eliminated.”
Achievements amid delays
Despite policy uncertainty, Taiwan’s offshore wind industry has made significant progress on the water. By the end of 2024, Taiwan had 374 turbines installed with around 3.04 GW of capacity – the seventh-largest offshore wind capacity in the world. This is a remarkable jump from virtually zero a decade ago. A string of large projects off Taiwan’s west coast are now operational, albeit many after delays and cost challenges.
The country’s first offshore wind farm, the 128 MW Formosa 1 demonstrator, was completed in 2019, proving the viability of utility-scale wind off Taiwan. Soon after, domestic utility Taipower finished its own 109 MW demonstration project in Changhua in 2021. These early projects set the stage for a massive build-out under the government’s Round 1 program. Global developers, attracted by generous feed-in tariffs (FITs) at the time, partnered with local companies to kick off construction with a goal of achieving 5.7 GW by 2025.
Danish multinational Ørsted’s Greater Changhua 1 & 2a wind farm – Taiwan’s largest to date – began supplying power in April 2024. The 900 MW complex, located 35–60 km off Changhua County, now powers roughly 1 million Taiwanese households and cuts carbon emissions by an estimated 1.75 million tons per year.
Other major Round 1 projects have also come online. The Formosa 2 wind farm (376 MW) off Miaoli, jointly developed by the Japanese JERA along with its partners, was completed in 2023 after overcoming weather and engineering challenges. The Changfang and Xidao (600 MW) projects, built by CIP, and the Zhongneng wind farm (300 MW), a joint venture of CIP and Taiwan’s China Steel, achieved full operation in 2024. Their completion has firmly placed Taiwan on the offshore wind map. In total, the island now has seven large offshore wind farms in operation.
But Taiwan is now expected to miss its original goal of installing 5.7 GW of offshore wind capacity by 2025, falling short by several gigawatts. Most Round 1 projects have required deadline extensions, a setback the government has acknowledged with little fanfare.
Nevertheless, the next wave is already in motion. In December 2022, Taiwan awarded another 3 GW of capacity in the first auction of Round 3 (2026–2031), and a second 3 GW round followed in 2023.
Notably, CIP’s 500 MW Fengmiao 1 project – part of Round 3 – became the first of this new batch to reach financial close in November 2024. The NT$103 billion (US$3.1 billion) project financing, backed by 27 domestic and international banks and multiple export credit agencies, marked a significant vote of confidence in Taiwan’s offshore wind prospects under the new regime.
“Reaching financial close on Fengmiao 1 proves that Taiwan remains a very bankable and promising market for offshore wind,” says CSIS’s Hsu. “It sends a strong signal that the fundamentals of Taiwan’s offshore wind industry remain solid.”
Policy evolution
Over the past decade, Taiwan has shifted from generous FITs to a fully market-driven model for offshore wind, sparking both rapid growth and investor unease. Initially, high subsidies and guaranteed purchase agreements attracted a wave of foreign developers, but by 2018 the government pivoted to competitive auctions and localization rules.
Most recently, Taiwan eliminated subsidies altogether for Round 3 projects, requiring developers to secure financing through corporate power purchase agreements instead of selling to the state utility – marking a bold, high-risk transition to a subsidy-free renewable energy market.
This rapid shift from one of the world’s highest FITs to a purely market-based model has unnerved some investors. “The deteriorating move from the highest FIT to the other extreme of market-based corporate power purchase agreements within such a short period affects even large players,” notes Gao.
He and other experts note that removing fixed tariffs has made it harder for developers to secure financing, as projects now face greater merchant risk tied to uncertain corporate offtake agreements. To address these concerns, the government introduced credit guarantee programs – first to support project loans, and more recently to ensure payments from corporate power buyers – aimed at restoring investor confidence and easing bankability challenges in a subsidy-free market.
Meanwhile, Taiwan’s long-term commitment to offshore wind remains steadfast on paper. Under the government’s Energy Transition 2.0 policy and 2050 net-zero emissions roadmap, offshore wind capacity is slated to reach 15 GW by 2035 and 40–55 GW by 2050.
Further auctions are expected in the coming years, potentially including the island’s first commercial floating wind sites in deeper waters. Reaching these goals will require balancing investor interests with local ones.
As Taiwan recalibrates its policies, developers on the ground are adjusting their strategies and voicing their needs. Some international players have pulled back, but others are doubling down, often in partnership with local stakeholders. CIP falls in the latter camp.
Hsu describes the past year as a roller coaster of breakthroughs and lingering obstacles. On one hand, CIP’s ability to clinch deals with a portfolio of corporate buyers for the Fengmiao project – and bring banks on board – is a sign that the market can work. But it wasn’t easy. “Although our wind farm has sold all our electricity, this took three years and a lot of unknowns and a lot of uncertainties,” she says.
Many of the corporate buyers had never signed 25-year power contracts before, requiring the private sector to navigate uncharted territory in structuring agreements. Even after deals were finalized, a key uncertainty remains: how electricity will be transmitted through state-run Taipower’s grid to end users. Hsu highlights the lack of clarity around these “wheeling” arrangements – a critical regulatory gap, as all offshore wind power must pass through Taipower’s infrastructure, yet the terms of service remain opaque.
In Hsu’s view, the government’s recent pledge to drop local content requirements is a positive “for the sake of good order” in future auctions. Still, she reiterates that other bottlenecks like grid infrastructure and permitting efficiency now need attention.
Infrastructure remains a key concern for developers, who have repeatedly urged Taiwan to modernize ports, invest in specialized installation vessels, and streamline permitting through coordinated, one-stop processes. Progress has been slow. A case in point is the Offshore Wind Operation and Maintenance port in Changhua, which was delayed by local government disputes and is now expected to open by May 2025.
The national grid also requires expansion and modernization to handle intermittent renewables from the coast. The government has announced plans to invest in grid upgrades, but industry players are calling for more concrete measures and faster execution. These improvements are not only needed for current projects but are prerequisites for future innovations like floating wind and “Power-to-X” applications.
Smooth sails ahead?
Looking ahead, companies are excited about Taiwan’s offshore wind potential beyond conventional turbines. Floating wind farms, which can be deployed in deeper waters, are seen as the next frontier post-2030.
“Very soon, we will need to go into floating,” says Hsu, noting that after the Round 3.3 auction, most of Taiwan’s remaining sites suitable for fixed bottom turbines will be used. Developing floating wind at scale will demand new infrastructure and robust policy support, as it is currently more expensive. Another opportunity is integrating offshore wind with green hydrogen or ammonia production.
“We cannot talk about large-scale offshore wind deployment without thinking about hydrogen and ammonia,” Hsu says, adding that these are the next level of energy storage and utilization for excess wind power.
Rather than curtailing turbines during periods of surplus generation, excess offshore wind power could be used to produce hydrogen fuel, which can be stored or converted back into electricity. Taiwan’s Energy Transition roadmap includes such “Power-to-X” strategies, but implementation remains in its early stages. Hsu argues that planning for the full value chain – from offshore wind to hydrogen production and end use – should move in parallel with the development of floating wind projects to ensure Taiwan remains aligned with global trends in renewable energy innovation.
As of 2025, Taiwan’s offshore wind industry stands at a pivotal point. The foundations have been laid – literally – for a world-class renewable energy sector.
“It really takes consistent delivery of government policy to enable Taiwan to have our status today,” says Hsu. She notes that progress is the result of 15 years of policy by both the Kuomintang and the Democratic Progressive Party to make it work. “As Taiwanese, we should be very proud of how far the industry has come.”
