Industry insiders are sounding the alarm that Taiwan’s Round 3.1 projects could be “headed for a hard landing.” The 6 projects that came out of auctions at the end of 2022 for construction in 2026/2027 have yet to sign their administrative contracts. With the deadline for signing looming at June 30th, a number of developers are not yet ready to sign. Any further delays to the administrative contract deadline, which has already been extended, would impact the planned Round 3.2 auctions (for construction 2028/2029).

Speculation has been rife over which of the 6 developers awarded projects would be willing to sign the administrative contracts, with industry insiders estimating only about half the developers would be in a position to ink the contract.

Speaking to Taiwan Offshore Wind Unredacted, a developer who declined to be identified said they have been unable to find Corporate Power Purchase Agreement (CPPA) contracts in the NT$5-5.5/kWh (€150-170/MWh) range that they need to finance their projects.

Despite high demand for renewable energy from Taiwanese corporates within multiple industries, most are not credible sole-offtakers for a 20-year offshore wind CPPA.

“The majority of Taiwan corporates don’t have an international credit rating such as S&P or Moodys, but instead a Taiwan rating which is considered 4-5 notches above an international rating.”

Since Taiwan projects rely on international financing, this leaves the Taiwan Semiconductor Manufacturing Company (TSMC) as the only credit-worthy offtaker that also have a high demand for renewable energy. However, the unnamed developer described TSMC as “totally unrealistic” when it comes to the price they are willing to offer.

“If we could sell our project at NT$4.5/kWh (€140/MWh) we could have sold it many times over, however knowing the Taiwan market and its hefty localization requirements, that is not possible.”

The focus on offtakers’ credit is even more important for Round 3 because all the winners bid zero in the auction, resulting in no “fall back price” for electricity. If an offtaker defaults, the project would not be able to meet its debt obligations unless a similar offtaker was identified immediately.

“While we do not need a signed CPPA in order to sign an administrative contract, we do need to at least see a possible solution.”

Two possible solutions were suggested: offering developers a “reasonable fall back price” linked to the current Feed-in-tariff (FiT) of NT$4/kWh (€120/MWh) for their CPPAs. Alternatively, the developer called for “government-led credit support” which would improve the bankability of projects through a financial guarantee.


It’s no secret that Taiwan’s offshore wind farms are now the most expensive in the world in terms of CAPEX thanks to the authority’s extensive Local Content Requirement (LCR). I have heard quotes as high as €7 million/MW from credible sources. This appears to be higher than the market can bear, even considering the need of Taiwanese tech companies to fulfill their supply-chain decarbonization obligations.

There is no shame for the Taiwanese government in acting to course-correct. Even apart from the LCR, costs have been surging due to world-wide factors, leading to developers failing to bring projects to fruition all over. Germany is allowing wind developers to scrap contracts as costs climb, citing the “exceptionally sharp rise in costs” that wasn’t foreseeable when the bids were submitted, said the German Economy Ministry.

In Taiwan, the danger of having developers simply abandon Round 3.1 en masse is it leads to a “hole in the doughnut” of construction 2026/27. Can Taiwan’s fragile, nascent supply chains take the interruption without falling apart?

Unless the government acts very, very quickly, we might be about to find out.

For our Subscribers only, here is my private assessment of the 6 developers and how likely they are to sign the on the dotted line, and whether that commitment actually mean a wind farm is likely to be forthcoming. This is in likelihood of signing.



t in Taiwanese projects. Those banks, as we know, are already in short supply.