As Taiwan pursues its net-zero emissions goals, the energy sector stands at a pivotal juncture, balancing decarbonization, energy security, market liberalization, and industrial competitiveness. Clear market design and robust market services are essential. Market design signals how investors can participate in Taiwan’s energy market. Meanwhile, market services (referring to the institutions, rules, and platforms that govern transactions between electricity suppliers and users, including balancing services, ancillary services, and wholesale trading mechanisms) provide the framework enabling developers and users to meet energy needs.

By implementing this year’s White Paper recommendations, Taiwan can build a sustainable, resilient, and competitive energy ecosystem that supports environmental objectives and reinforces its global leadership in technology and manufacturing.

Suggestion 1: Support Taiwan’s renewable energy transition by strengthening policy clarity, administrative efficiency, and electricity pricing mechanisms.

Taiwan’s renewable energy sector faces persistent challenges stemming from regulatory uncertainty, bureaucratic inefficiencies, and approval processes that in some cases take as long as seven years or more. To foster a resilient and competitive renewable energy market, the Committee recommends that the government:

1. Improve policy transparency and predictability. The Committee recommends that the government adopt a stable, predictable, and consistently implemented policy framework to reduce investment risk and enable long-term planning. While Taiwan has set strong net-zero targets, developers continue to face challenges stemming from the disconnect between high-level ambition and site-level implementation. In particular, stakeholders have highlighted the absence of integrated and regularly updated implementation roadmaps that link national targets with spatial planning, permitting timelines, and grid access priorities. Inconsistent coordination across agencies has also resulted in conflicting interpretations and administrative delays. Meanwhile, limited milestone tracking and public disclosure mechanisms hinder investors’ ability to monitor progress or plan project pipelines. A clear roadmap for renewables, storage, and grid expansion should define near-, medium-, and long-term development targets, supported by specific implementation plans and milestone timelines.
   Regulatory transparency should be enhanced through the establishment of a centralized information-sharing platform to provide timely policy updates and implementation schedules. Once projects are approved, additional requirements should not be imposed retroactively. A regular review mechanism, including sunset clauses and industry consultation, should be adopted to phase out outdated regulations.
   The Committee further recommends establishing a cross-ministerial and central-local government coordination platform, as well as a dispute resolution mechanism to ensure consistent regulatory enforcement and avoid delays caused by conflicting administrative practices.
2. Enhance government review efficiency. Administrative processes should be simplified to reduce the risk of corruption and improve decision-making efficiency. The Committee urges the government to standardize review criteria based on project type and scale and to clarify the division of responsibilities between central and local authorities. A fully empowered single-window review system should be established to coordinate cross-ministerial and local government reviews.
   A phased three-stage review mechanism should be followed to minimize unnecessary interventions at early stages:

   ．Initial review: assessment of project eligibility, legality, and technical feasibility.
   ．Supervision stage: oversight by competent authorities or accredited third parties to ensure regulatory compliance.
   ．Final stage: verification of implementation results.

To avoid fragmented requests for corrections and long delays, the Committee recommends establishing a “default approval” mechanism that permits applications to be deemed approved if no response is provided within a designated timeframe. Such a mechanism would help ensure timely government response, pertaining exclusively to applications that have fulfilled all statutory submission requirements, and would serve as a backstop against unexplained administrative inaction rather than a substitute for technical review. High-risk or sensitive projects, including those requiring environmental impact assessments or complex grid interconnection, would be explicitly excluded. Similar “default approval” or “positive silence” frameworks have been successfully implemented in jurisdictions such as France, Italy, and the Netherlands to improve transparency, accountability, and efficiency in standard permitting cases while maintaining rigorous review for matters of elevated risk.

A fully digitalized application platform should also be developed to minimize discretionary interventions, increase procedural transparency, and enhance administrative efficiency.

In parallel, the conduct of local public hearings should be strengthened by standardizing their format, scope, and participation criteria, with a focus on technical issues. Such standardization would help prevent politicization of project reviews and ensure professional, fact-based dialogue.

Finally, a fixed and transparent contribution mechanism should be introduced to replace ad hoc local benefit schemes. Related costs could be incorporated into the existing electric power development support fund framework to ensure equity, accountability, and local community engagement. By adopting these measures, Taiwan will be better positioned to attract sustainable investment, facilitate regulatory compliance, and accelerate the transition to a low-carbon energy future.

Suggestion 2: Accelerate decarbonization by investing in carbon capture and low-carbon fuel technologies.

The Committee welcomes the inclusion of carbon capture and storage (CCS) and low-carbon fuels, including hydrogen and ammonia, as flagship projects under the National Development Council’s 12 Key Strategies action plan, reaffirmed on January 23, 2025. State-owned Taiwan Power Co. (Taipower) alone accounted for 37% of Taiwan’s total CO₂ emissions in 2022, or 98 million tons of CO₂e, underscoring the need for CCS deployment in the power sector.

1. Accelerate CCS development. CCS is an essential component of any credible net-zero pathway. It is a comparatively mature, cost-effective technology capable of delivering deep emissions reductions from hard-to-abate sectors. Taiwan possesses geological potential for carbon storage, and accelerating the deployment of commercial-scale CCS is necessary to realize this potential.

   To advance CCS, the Committee recommends that the government:
   ．Establish a national CCS task force. The government should designate a lead agency to form a task force comprising relevant ministries, technical experts, and industry stakeholders. The purpose of this task force would be to coordinate the development of Taiwan’s first commercial CCS project, targeting a storage capacity of at least 1 million tons per annum (MTA), with a broader goal of reaching 6 MTA by 2035. The task force would also assess commercial viability, project project cost, roles and responsibilities of state-owned entities, and opportunities for public-private partnerships, while fostering transparency and stakeholder engagement to build public confidence and trust.

   ．Develop a supportive incentive framework. Given the current level of carbon fee(~TWD300 tCO2e), government incentives are needed to stimulate such investment. International models, including the U.S. IRA 45Q tax credit, Malaysia’s Investment Tax Allowance, and the United Kingdom’s Contracts for Difference scheme, offer useful references for Taiwan in designing appropriate support mechanisms. The Committee recommends that insights generated by the CCS task force inform the development of a targeted, durable incentive policy.
   In parallel, the creation of a robust market-based mechanism to recognize and reward verified carbon stored would enhance investment certainty. The Committee notes with interest that academic institutions are currently exploring frameworks to support such a mechanism.

   ．Accelerate the regulatory process for CCS. The Committee urges the Ministry of Environment to hold stakeholder consultations and finalize commercially viable CCS regulations by the end of 2025. A clear and predictable regulatory framework will be essential to de-risk early-stage investment and enable first-mover projects.

2. Invest in hydrogen and ammonia. The Committee supports the Ministry of Economic Affairs’ efforts to activate hydrogen and ammonia markets as part of Taiwan’s long-term energy transition. To support these goals, the Committee recommends that the government:
   ．Conduct a feasibility study for hydrogen infrastructure. A government-led infrastructure assessment identifying suitable sites for receiving terminals, storage facilities, and transportation corridors would facilitate informed decision-making and reduce development risk. Such a study would provide valuable reference for investors and help align infrastructure buildout with broader energy planning objectives.

   ．Clarify development model and fiscal policy directions. Whether the hydrogen market will be led by state-owned enterprises or the private sector remains unclear. If private investment is to play a central role, timely fiscal incentives will be necessary to accelerate infrastructure development and deliver cost-effective solutions to end users. Establishing clear policy direction and enabling conditions will be key to achieving early progress.

Suggestion 3: Strengthen energy security and resilience through stable supply, market reform, and transparent long-term planning.

1. Ensure power supply stability through improved project coordination. Taiwan’s baseload power supply faces structural challenges as nuclear energy is phased out and coal-fired generation declines in line with decarbonization goals. With no active plans for new baseload capacity and global fuel disruptions affecting gas-fired development, delays in projects by both Taipower and private developers raise concerns about future reliability, particularly for critical sectors like semiconductors and AI.
   The Committee recommends reforming the bundled bidding model, which packages all components of a power generation project into a single contract or bidding process, to improve efficiency. The government should allow Taipower to secure major equipment and fuel contracts in advance, followed by construction tenders to developers. This approach, modeled on international best practices, would reduce delays and strengthen long-term energy security.
2. Advance fair market design through transparent separation of generation and transmission/distribution. The Committee urges the government to preserve Article 6 of the Electricity Act, which mandates the separation of generation and transmission, a foundation of competitive electricity markets worldwide. This separation prevents monopolistic practices, promotes transparency, and ensures accurate price signals, enabling informed investment decisions for energy producers and cost forecasting for consumers. However, the implementation deadline stipulated in Article 6 has passed without a clear rescheduling plan, and its removal has been proposed in the latest amendment draft.
   Many global companies have invested in Taiwan on the assumption of continued liberalization since the reform in 2017. Maintaining fair competition and policy stability will bolster Taiwan’s energy transition and economic resilience.
3. Improve long-term planning through international consultation and data transparency. To enhance system resilience, the Committee recommends engaging qualified international consultants for long-term assessments, including grid expansion, production cost modeling, and power flow analysis, with findings made public via a transparent information-sharing platform to align private investment with national goals and support efficient market development.
4. Expand market mechanisms to improve efficiency and attract investment. The Committee supports continued market liberalization through phased implementation of sub-markets that improve transparency and price discovery. A capacity market, where generators are paid not only for the electricity they produce but also for making it available when needed, would provide investment certainty for long-lead infrastructure and emerging technologies, while also supporting project financing.
   Further, a real-time imbalance market would improve operational efficiency by better matching supply and demand. The development of ancillary services markets, including for black start, voltage control, and inertia response, would further enhance grid stability and flexibility. These mechanisms broaden market participation, improve price signals, and support a more responsive electricity system.
5. Clarify participation rights for energy storage and distributed energy resources (DERs). To modernize the grid and enhance flexibility, the Committee recommends amending the Electricity Act to guarantee market access for energy storage systems and DERs. Taiwan can draw on U.S. FERC Orders 841 and 2222, which support full market participation, including energy, capacity, ancillary service, recognition as buyer, seller, and transmission assets, for these resources.
   The regulatory framework should clearly define eligible technologies, such as battery storage, pumped hydro, hydrogen, and flywheels, and implement mechanisms for real-time monitoring, energy source tracking, and Taiwan Renewable Energy Certificate (T-REC) issuance. Clarifying participation rights and market mechanisms will support renewable integration, improve system resilience, and attract further investment in Taiwan’s energy sector.

Suggestion 4: Maintain a competitive industrial electricity environment and improve the corporate renewable energy procurement process.

Taiwan’s energy market is gaining momentum, driven by corporate decarbonization goals, mandatory sustainability reporting for listed companies in 2025, and the rollout of round 3.1 offshore wind projects. Renewable energy is the most cost-effective way to reduce life-cycle emissions across the full energy supply chain by 2030. As large power users work to meet climate targets, corporate power purchase agreements (PPAs) have become critical enabling tools.

While bilateral PPAs offer price certainty for RE, high electricity costs remain a concern. To expand access and maintain industrial competitiveness, the Committee recommends the following:

1. Expand access to green tariff mechanisms. The Committee considers Taipower’s current renewable energy auction model suitable for commercial users, especially smaller buyers with short-term contracts, and complementary to longer-term bilateral power purchase agreements (PPAs). However, the current cap of 200 MWh per meter over a five-year period may not meet the needs of buyers with larger demand. The Committee recommends scaling up the program by increasing the cap per offering and incorporating additional projects to serve a broader range of users at affordable prices.
2. Improve PPA-regulated charges transparency and predictability. Regulated charges such as wheeling fees and reserve capacity cost have directly increased buyers’ all-in cost of procuring renewable energy, currently estimated between 50% and 70% above Taipower’s retail rates. The Committee urges the government to clarify pricing methodologies and cap annual adjustments to these costs. Including buyers in fee-setting would enhance long-term predictability and support renewable energy procurement planning.
3. Minimize surplus energy and provide T-REC transfer flexibility. While the Electricity Act is being amended to set up a secondary market where retailers can trade surplus energy, concerns remain about its capacity and effectiveness, particularly for offshore wind. The Committee recommends conditionally allowing a transfer of T-RECs to the respective PPA offtakers when Taipower consumes the surplus renewable energy and expanding the sandbox settlement mechanism across Time-of-Use periods and entities. These steps would reduce waste of energy attributes and support corporate buyers RE realization targets.
4. Transition from feed-in tariff to feed-in premium. To align with international practice, the Committee recommends shifting from fixed feed-in tariffs for solar to a feed-in premium (FIP) model. A FIP system would preserve government support while promoting competition and lowering long-term costs. Revenues from carbon fees could also be considered to reduce renewable energy development costs, thereby stimulating corporate demand.
5. Continue supporting the development of Taiwan Smart Electricity and Energy Co. (TSEE). TSEE is designed to play a key role in aggregating offshore wind and reselling in smaller volumes with shorter terms, reducing credit and contract hurdles for corporate buyers. Continued government support will enhance procurement flexibility and bolster strategic industries.
6. Stabilize industrial electricity prices. Electricity affordability is essential to competitiveness. From 2022 to 2025, rates for large industrial users increased by up to 66%, even as fuel costs began to stabilize. As of March 2025, Taipower’s average generation cost was NT$3.31/kWh, while industrial users paid NT$4.29/kWh. Despite these increases, overall pricing remains subsidized through lower household rates.

The Committee recommends avoiding further rate hikes, offering financial support to Taipower for public service obligations, and adopting cost recovery mechanisms tied to actual generation costs. Ensuring Taipower’s financial stability is critical to infrastructure investment and policy execution, particularly in industrial zones and public institutions.

By implementing these recommendations, Taiwan can accelerate renewable deployment, meet net-zero targets, and preserve its export-driven competitiveness.

Suggestion 5: Bolster the operational environment for renewable energy developers.

In support of Taiwan’s net-zero goal and the continued development of the renewable energy sector, it is essential to address the practical challenges faced by energy developers during both the construction and operational phases of their projects. The Committee emphasizes the need for greater regulatory clarity, coordinated planning, and supply chain stability to support successful implementation and long-term investment.

1. Clarify the regulatory framework for renewable energy and emerging technologies. The scope of Taiwan’s renewable energy policy has expanded beyond traditional sources to include emerging technologies such as geothermal energy and energy storage systems. However, a comprehensive regulatory structure to guide these developments remains underdefined.
   The Committee recommends that the government prioritize regulatory alignment through inter-agency coordination, ensuring that emerging technologies are incorporated into national energy plans. A clear and unified framework would support developers in assessing investment risks and operational requirements, ultimately facilitating the deployment of innovative solutions in Taiwan’s energy transition.
2. Accelerate spatial planning for offshore wind development. As nearshore shallow-water sites reach saturation, future offshore wind development will depend on access to new maritime areas. The Committee recommends that the government establish a cross-ministerial coordination task force to evaluate and designate additional offshore zones suitable for wind development. Early disclosure of potential sites would enable developers to conduct timely feasibility assessments, contributing to the effective realization of long-term offshore wind targets.
3. Enhance grid coordination to support power system stability. The Committee recommends that Taipower establish formal mechanisms for communicating grid maintenance schedules, shutdown notices, and other operational requirements in advance. Clear coordination protocols would help developers mitigate disruptions and avoid the imposition of burdensome conditions such as virtual power reduction mandates. Strengthening grid transparency and engagement will help ensure the stability and predictability of energy delivery.
4. Facilitate equipment supply through streamlined certification processes. Given the long lead times associated with the procurement and replacement of specialized renewable energy equipment, delays in import certification can significantly hinder project execution. The Committee urges the government to review and streamline relevant administrative procedures to ensure timely processing of critical equipment imports. Doing so will help safeguard project schedules, reduce downtime, and ensure the continued reliability of renewable energy generation assets.

By improving regulatory transparency, supporting coordinated grid operations, and ensuring supply chain efficiency, Taiwan can strengthen the operating environment for renewable energy developers and continue advancing toward its long-term climate and energy goals.