After a ‘crushing defeat’ of her party in local elections in Taiwan, the country’s president Tsai Ing-wen has resigned as head of the Democratic Progressive Party which could affect support for offshore wind projects in the country.
The Democratic Progressive Party (DPP) lost ground significantly to the opposition Kuomintang (KMT) party in the elections, which could have a number of important implications for Taiwan. It has already been suggested that the president could be challenged from within her own party before the next presidential election, which takes place in January 2020.
Under the president, Taiwan has been making good on longstanding plans to close nuclear power plants and invest heavily in offshore wind energy. Late April 2018 saw the authorities in Taiwan announce the results of the first large-scale auction for offshore wind in the country. The president has proposed to end the country’s dependence on nuclear power by 2025 while sourcing 20% of Taiwan’s electricity from renewable sources, five times the level in 2015.
Recent months have seen Taiwan emerge as the world’s leading export market for offshore wind, but concerns have been expressed about what political upheaval there could mean for energy plans and offshore wind in particular.
Natixis Corporate & Investment Bank managing director Ranjan Moulik told the Offshore Wind Europe 2018 conference in London on 27 November 2018, that for developers, the political situation in Taiwan could be “challenging” because of the two-party system. He told delegates that policy changes were not out of the question as a result of the dramatic shift in sentiment among voters in the local elections.
“It’s possible that we could see a slowdown in the rate at which nuclear power is decommissioned,” he told the conference. “In turn, that could affect the rate of rollout of renewable energy.” Nuclear power and the rate at which it should be decommissioned was one of a number of referendum questions posed to the electorate at the same time as the local elections.
John MacAskill, a director at Offshore Wind Consultants Limited, which has an office in the country and close links with developers there, told OWJ, “In the short term, the effect on so-called ‘fast track’ projects such as Yunlin and Formosa 2 will be minimal.
“They were local rather than central government elections, but the KMT has a different approach to energy policy both in terms of the speed of decommissioning of nuclear power and build-out of renewables, although any effects will probably only become clear after the 2020 elections.
“Certainly, later projects could be at risk of schedule changes or even changes to power purchase agreements. Developers in the Taiwanese market need to engage with the KMT to understand the possible risks.”
However, Mr MacAskill said that a slight cooling down in the Taiwanese offshore wind market might allow for what he described as “a more sensible build-up of the necessary infrastructure.”
He said it is important to be aware of potential changes depending on the timescale of projects and engage with new local government and the KMT.