Taiwan - Highlights Of The Draft Offshore Wind Energy Zonal Development Plan.

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2 July 2021


On May 11, 2021, the Bureau of Energy (“BOE”) of the Ministry of Economic Affairs (“MOEA”) announced the draft Offshore Wind Energy Zonal Development Plan for the Phase III Offshore Wind Energy Zonal Developer Selection Mechanism[2] (“Draft Developer Selection Mechanism Plan”).  It is expected that the development capacity released each year will increase from the originally planned 1GW to 1.5GW and a total of 15GW will be released in 10 years.  According to the BOE’s announcement, the zonal development plan is focused on four major aspects, namely, the planning of the zonal development mechanism, industry policy, terminal construction, and grid construction.  In particular, the planning focus of the zonal development mechanism primarily includes taking inventory of developable sites and capacity and planning the application qualifications, selection system and handling phases.  According to the draft, a two-stage developer selection method is proposed for the zonal development developer selection mechanism, i.e., “qualification examination before price evaluation.”  As for the industrial relevance policies for zonal development, it is proposed to continue the key development items for zones of potential for the Phase II offshore wind energy development and to add a flexible mechanism and a mechanism that awards additional points.  The highlights of the Draft Developer Selection Mechanism for zonal development are summarized below.


1.  Capacity release and handling schedule during 2026 through 2035


 According to the Draft Developer Selection Mechanism, a total of 15GW capacity is expected to be released in 10 years from 2026 to 2035, with 9GW capacity to be released in phases from 2026 to 2031 (“Phase I Zonal Development”) and 6GW from 2032 to 2035 (“Phase II Zonal Development”).

The Phase I Zonal Development will be conducted by year and by stage.  The first stage grid connection will take place from 2026 to 2027, with an allocated capacity of 3GW (1.5GW per year), and the selection process is expected to take place in the second and third quarters of 2022.  It is currently planned that the cutoff date for accepting the first stage developer selection applications will be June 30, 2022, and the first stage developer selection outcome will be announced by August 31, 2022.  The second stage of grid connection will take place from 2028 to 2029, with an allocated capacity of 3GW (1.5GW per year).  The developer selection is scheduled for the second quarter of 2023.  The third stage of grid connection will take place from 2030 to 2031, with a capacity of 3GW (1.5GW per year), and the developer selection is scheduled for the second quarter of 2024.  The MOEA will conduct a rolling review of the Phase II and III developer selection plans, depending on outcome of the Phase I implementation.

In the Phase II Zonal Development, the MOEA will generally take into consideration the results of the Phase I Zonal Development, as well as international technological development and other factors for its separate planning.

2. Two-stage developer selection process with “qualification examination before price evaluation”


 First of all, with regard to the application qualification requirements, the developer must obtain the conclusion of a pass or conditional pass as adopted in the preliminary review meeting of the Environmental Impact Assessment Review Committee of the environmental protection authority, the wind farm site plan recordation issued by the MOEA which has not expired, and the review opinion of Taiwan Power Company (“Taipower”) on the parallel connection of the renewable energy power generation system.  In addition, all kinds of required documents such as the application form and plan for the allocation of zonal development capacity, the location map of the wind farm and the wind turbine arrangement plan, etc.


In terms of the qualification criteria, the evaluation items cover technical capability, financial capability, and industrial relevance items.  For the technical capability category (60%), the review basically takes into account the experience and capability of the developer and its team, as well as the completeness, feasibility, and suitability of the wind farm plan.  The detailed evaluation items include construction capability (25%), engineering design (20%), and operation and maintenance planning (15%).  In addition, for the financial capability category (40%), the review is in principle primarily focused on the financial soundness of the project and developer (25%) and the capital capability of shareholders (15%).  In addition, with respect to industrial relevance items, the review basically takes into account the qualifications that the industrial relevance development commitments should meet the requirements under the industrial relevance policy of the Industrial Development Bureau (“IDB”) of the MOEA (i.e. localization requirements).  Pursuant to the requirements under the draft Industrial Relevance Implementation Program Plan for Offshore Wind Power Zonal Development[3] (“Draft Industrial Relevance Program”) announced by the IDB on May 11 this year (2021), the number of key industrial relevance development items which has been implemented by an applying developer shall reach 60% of the application capacity and the number of extra points should be at least 10.

According to the Draft Industrial Relevance Program, there are a total of 26 key industrial relevance development items under four major categories, namely, electrical facilities, underwater foundation, wind turbine parts and components, and maritime engineering of the potential site items in the previous phase, including land-based electrical facilities (transformers, switchgear equipment, and distribution panels), wind turbine full nacelle assemblies and fasteners, towers and fasteners, and other items.  In addition, land-based cables, offshore substation equipment, wind turbine pitch-control system, etc., are added.  In addition, the items that provide extra points include a total of 57 items with more difficult technology landing such as wind turbine generators, as well as submarine cables, floating type underwater foundations, etc.  A developer may choose its own items and quantities and describe its own core process technologies.

In accordance with the requirements of the Draft Developer Selection Mechanism Plan, a developer is required to pass the qualification examination before price evaluation can be conducted.  With respect to the price evaluation, there is a cap on competitive pricing, and the upper limit of the bidding price is the avoided cost of the year prior to the developer selection as announced pursuant to Point 8 of the Operating Guidelines of Taipower for Purchasing Renewable Energy Power, and the lower limit of the bidding price is set at NT$0/kWh.  The lowest bidder will rank the first, the second lowest bidder will rank the second, and so on.  If the prices are the same, the one with a higher score in “additional industrial relevance development commitments” will be given priority.

3. Capacity allocation principle and upper limit 

The capacity allocation principle set forth in the Draft Developer Selection Mechanism Plan will be based on the ranking, the available annual grid connection capacity to the point of interconnection as announced by Taipower, and the upper limit for the capacity allocation for each phase (i.e., 3GW for 2026-2027, 3GW for 2028-2029, and 3GW for 2030-2031).  The application capacity will be accumulated each instance from the first ranking and the first year of each phase until the capacity cap for each phase is reached.  If the annual capacity allocation cap is insufficient for allocation, the shortfall will be allocated to the next capacity provision year of the current phase.  However, if the capacity of the point of interconnection or the capacity available for allocation in the current phase is less than 100MW, no allocation will be made any further.

As for the upper limit on capacity allocation, 0.5GW is the upper limit on capacity allocation for a single wind farm and the same developer in each phase.  However, the MOEA may increase the capacity allocation by 100MW by considering the integrity of the wind farm, development efficiency, domestic industry capacity, and the announced grid connection capacity of the electricity transmission and distribution enterprise.  According to the Draft Developer Selection Mechanism Plan, the “same developer” is defined as one (1) with the same preparatory office/company or one of the promotors who is the same, or one of the external representatives who is the same in the application; and (2) with one of the juristic person shareholders who is the same or one of the general partners of fund who is the same in the application.  The above-mentioned promotors or juristic persons refer to those whose direct or indirect shareholding is not lower than 20% in the application.  As to the determination and application of such definition in a specific case, it is advisable to further clarify this with the BOE.

 In addition, regarding the principle of selecting multiple developers for the same wind farm, if there are multiple developers competing for the same site, the first in line will be allocated first, while those with lower rankings will not be allocated capacity.

However, the draft Developer Selection Mechanism Plan for this zonal development and the Draft Industrial Relevance Program suggest that the BOE and IDB have responded to the long-term expectations of all relevant sectors, e.g., expanding the release of development capacity and adding a flexible mechanism and extra point mechanism to the industrial relevance policy.  However, with respect to important controversial issues such as wind farm site development zones and sea area planning, environmental and ecological protection planning and the principles for the regulation and review of share transfer of developers, which various related industries and different interested parties are paying attention to, no specific and clear explanation is provided in the draft announced this time.  Since the adequacy of the planning mechanism for zonal development and the concrete implementation of the planning objectives are crucial to the sound development of Taiwan’s offshore wind power industry, and developer selection schedule for the first stage of the Phase I Zonal Development planned by the BOE is imminent (the second to the third quarter of 2022), it is expected that the BOE and the relevant government agencies will release specific and clear regulations on the above important issues as soon as possible for the compliance of all relevant sectors.


For further information, please contact:  


Jiselle Ong, Lee Tsai & Partners

[email protected]


[1]The author is a lawyer at Lee, Tsai & Partners.  However, the contents of this article merely reflect personal opinions and do not represent the position of this law firm.

2] https://www.moeaboe.gov.tw/ECW/populace/news/News.aspx?kind=1&menu_id=41&news_id=19823

[3] https://www.moeaboe.gov.tw/ECW/populace/news/Board.aspx?kind=3&menu_id=57&news_id=19817