BMI View: Taiwan is not short of ambition for developing renewable energy, but limited progress has been made in the expansion, primarily due to the unstable policy environment and low liberalisation levels in the power sector. However, considering the government ' s focus on offshore wind power and the significant solar panel manufacturing base in Taiwan, we do expect growth to pick up marginally across these segments over out 10-year forecast period.
Taiwan has set extensive targets for renewable energy, aiming to have 16% of energy from renewable sources by 2030 with ambitious programmes such as 'Million Solar Rooftop PVs' and 'Thousand Wind Turbines' setting up a framework for development. The government aims to install 1.2GW of onshore wind capacity by 2030, 3GW of offshore wind by the same time, and 6.2GW of solar capacity also by 2030. However, despite the ambitious targets and the implementation of regulations that aim to encourage the development of renewable energy (including feed-in tariffs, tax incentives and tradable renewable energy certificates), progress has been slow and the project pipeline remains limited.
This relatively unattractive investment environment will ensure that growth in Taiwan's renewables will underperform against the government's ambitious targets. We expect non-hydro renewables capacity to reach 3.1GW by 2024, with annual average growth rates in capacity of 6.2% between 2015 and 2024.
Key Trends And Developments Include:
A new formula to calculate electricity prices in Taiwan comes into effect from April 1 2015, with a short-term drop in prices of 7.3% expected before a correction later in the year.
On December 26, Taiwanese solar cell manufacturer Motech announced that it will acquire domestic rival Topcell Solar International (TSi) via a stock exchange. Motech will offer one share for six Topcell shares, and will issue 45.7mn new shares with a value of TWD2.05bn (USD64.6mn) to complete the acquisition. The acquisition will see Motech increase its total cell (multi-si) production capacity from 1.8GW to 3GW, including 700MW of production capacity that is based in China. Motech will also own 450MW of mono-si cell production capacity.
Taiwan's power supply is becoming increasingly precarious as the power reserve margin narrows, threatening industrial output across the country and increasing the risk of power shortages. The Director General of the Bureau of Energy warned in April 2015 that during May, the power reserve margin could fall below 6%, and even as low as 3.3%. The 3.3% limit would reportedly mark the lowest margin seen in Taiwan for 10 years.
It was announced in August 2014, that turbines on the country's first offshore wind pilot project (Fuhai) is expected to be installed late in 2015. The whole project is expected to go online by the end of 2017.
The US Commerce Department has upheld a decision to charge a tariff of up to 27.6% on solar cells imported from Taiwan, with Taiwan's manufacturers reportedly considering moving manufacturing overseas to avoid the tariff.