Taiwan's Energy Transition at a Crossroads: Advancing Offshore Wind Round 3.3 　While Pragmatically Reassessing Nuclear Options

President Lai Ching-te recently underscored at the sixth meeting of the National Climate Change Countermeasures Committee that the net-zero transition represents a "comprehensive upgrade of national competitiveness," while reaffirming the government's commitment to maximising green power deployment.

As Taiwan's energy transition enters a critical phase, the government has adopted a pragmatic dual-track strategy: on the one hand, it has initiated evaluations related to the potential restart of nuclear power, adhering to the principle of "safety first, decisions second" in a realistic reassessment of nuclear energy policy.

On the other hand, despite global ESG headwinds and volatility in renewable energy investment and financing, the government remains firmly committed to offshore wind development. This includes continued advancement of the Round 3.3 zonal development programme, supported by institutional design measures aimed at enhancing project bankability, lowering power procurement costs, and attracting long-term capital.

Pragmatic Review of Nuclear Energy Policy: Restart Evaluations Launched under a "Safety First, Decisions Second" Principle

In November 2025, the Ministry of Economic Affairs (MOEA) approved Taipower's current status assessment reports for its nuclear power plants, concluding that Kuosheng Nuclear Power Plant (2nd NPP) and Maanshan Nuclear Power Plant (3rd NPP) meet the regulatory prerequisites to submit restart proposals and initiate voluntary safety inspections in accordance with applicable laws and regulations.

Taipower is expected to submit restart plans for 2nd NPP and 3rd NPP by March 2026, after which the proposals will be subject to rigorous review under nuclear safety regulations and supervisory procedures.

Within this framework, nuclear energy is currently positioned at the stage of restart feasibility and safety evaluation. Whether restart will be approved, and the potential timeline, will depend on the outcomes of safety inspections, ageing management and seismic resilience assessments, as well as the competent authorities' reviews.

This approach reflects a pragmatic policy pathway grounded in safety as the top priority, scientific evidence, and rule-based decision-making, demonstrating the government's commitment to safeguarding energy security while keeping all viable options on the table.

Maintaining Offshore Wind Momentum amid ESG Headwinds: Round 3.3 Anchored on Timely Completion and Contractual Performance

In recent years, the global offshore wind sector has faced mounting challenges, including rising supply-chain costs, higher interest rates and financing costs, aggressive bid pricing, and project delays—factors that have led a number of developers to exit the market.

Recognising that the net-zero transition remains a long-term global imperative, and that Taiwan's share of clean energy remains relatively low, the government continues to advance Round 3.3 of the offshore wind zonal development programme. As part of its forward-looking strategy, the government is also preparing for the next stage by launching floating offshore wind demonstration projects. On 8 January 2026, the Energy Administration under the MOEA released the draft developer selection mechanism for Round 3.3, proposing a total allocation of 3.6 GW, with grid connection scheduled for 2030–2031.

The revised framework marks a clear shift from earlier mechanisms that placed greater emphasis on price competition and localisation requirements, toward a model that prioritises on-time delivery and execution capability. Key adjustments include:

• Evaluation criteria centred on developers' track records, financial robustness, and project execution capability
• Inclusion of ESG planning as a scoring item, aligning with international sustainable investment trends
• Incorporation of past records, including delayed completion, failure to execute contracts, or early termination into the assessment process, and strengthen institutional discipline around contractual performance and timely grid connection
  
  

Through these refinements, Round 3.3 not only sustains Taiwan's offshore wind development pathway, but also provides targeted institutional responses to current financing and execution risks, reinforcing policy credibility and market confidence.

Facilitating Project Success: Financing Guarantees, Price Support, and Mobilising Insurance Capital

Yi-Tai Tsai, Lead Partner for Energy Transition Services at PwC Taiwan, notes that to help offshore wind projects reduce overall costs, including development, construction, and financing. Taiwan's government has strengthened policy support across three key dimensions: financing guarantees, pricing mechanisms, and the mobilisation of long-term capital.

(1) Increasing the Single-Project Capacity Cap to 1 GW

Under the Round 3.1 and 3.2 offshore wind auction, the maximum capacity per project was capped at 500 MW. Some developers indicated that this scale was insufficient to achieve optimal economies of scale, limiting further reductions in levelised cost of energy (LCOE).

In recent years, the Port of Taichung of TIPC has made large-scale investments in port infrastructure, including the expansion of back-up land, heavy-lift handling capacity, pre-assembly areas, and logistics support. These upgrades are now capable of accommodating the operational and spatial requirements of large-scale offshore wind projects. Against this backdrop, Round 3.3 proposes raising the single-project capacity cap to 1 GW, with the aim of improving operational efficiency and reducing unit costs through greater project scale.

(2) Using Avoided Cost as the Floor Price to Reduce Cost of Surplus Electricity for Offtakers

With respect to green power transactions and price support mechanisms, Round 3.3 continues to adopt corporate power purchase agreements (CPPAs) as the primary commercial model. For any electricity volumes not fully contracted, Taipower will purchase the surplus power at a floor price not exceeding its avoided cost.

According to Taipower's announcement, the avoided cost for 2024 is NTD 2.92 per kWh, applicable from 1 October 2025 to 30 September 2026. This design is relatively favourable to power purchasers, as it helps reduce the cost burden associated with surplus electricity.

However, historically, Taipower has only announced an annual average avoided cost in the following year. This figure is calculated based on Taipower's audited average generation and procurement cost per kWh from the previous year, excluding renewable energy. In practice, avoided costs vary with monthly supply-demand dynamics. As such, the methodology and application mechanism for calculating avoided costs for offshore wind residual power remain areas requiring further clarification.

(3) Expanding Financing Guarantees and Encouraging Insurance and Long-Term Capital Participation

Offshore wind has been designated as a priority sector under Taiwan's "Trillion NT Dollar Investment National Development Plan." Facilitating access to financing is therefore a critical enabler of project deployment.

In October 2024, the Executive Yuan increased the maximum coverage ratio under the national credit guarantee mechanism from 60% to 80%, significantly enhancing banks' willingness to extend credit and strengthening overall capital momentum. In 2025, three offshore wind projects received financing guarantees, with a total guaranteed amount of NTD 37.06 billion.

Given the continued expansion of offshore wind project scale and the corresponding rise in financing needs, the National Development Council has indicated that the existing guarantee mechanism will be further enhanced. This includes consideration of increasing the dedicated guarantee fund and raising the leverage multiple, with the total guarantee capacity expected to expand to NTD 156 billion, thereby strengthening the system's overall support capacity.

In parallel, the Financial Supervisory Commission (FSC) has adjusted the risk-based capital (RBC) and regulatory framework for the insurance sector, making it easier for insurance funds to invest in public infrastructure and offshore wind. Measures include lowering risk charges for insurers investing in public infrastructure through private equity or venture capital vehicles, as well as reducing risk factors for investments in designated strategic industries.

Winnie Wang, Executive Director at PricewaterhouseCoopers Taiwan, explains that lower risk factors reduce insurers' required capital provisioning under the RBC regime, thereby lowering the capital burden and increasing incentives to invest in offshore wind and other renewable energy projects.

Yi-Tai Tsai concludes that, through these coordinated measures, the government aims to strike a balance between market-based mechanisms, price signals, risk management, and financing feasibility, ensuring that Round 3.3 offshore wind projects remain investment-attractive despite ESG headwinds, are delivered on schedule, and provide stable power supply in support of Taiwan's long-term energy transition objectives.

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