Report: Taiwan’s Renewable Energy Landscape – Prospects for Deepening U.S.-Taiwan Relations

June 30, 2021

Taiwan’s Renewable Energy Landscape:
Prospects for Deepening U.S.-Taiwan Relations

(Arlington, Virginia, June 30, 2021)

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The United States and Taiwan have long benefited from strong economic ties. Taiwan is a crucial partner for the U.S., particularly given its central role in the global technology supply chain. Meanwhile, the U.S. continues to be a major trading partner even as Taiwan re-calibrates its China exposure and expresses a renewed interest in partnering with its South and Southeast Asian neighbors.

In November 2020, the U.S. and Taiwan concluded the inaugural Economic Prosperity Partnership Dialogue (EPPD), intended to further strengthen the bilateral economic relationship. The EPPD culminated in a new economic understanding expressed in the form of a five-year agreement where the two sides pledged to explore future cooperation on numerous strategic sectors. Issues marked for discussion included global health security, science and technology, supply chains, 5G and telecommunications security, women’s economic empowerment, infrastructure cooperation, and investment screening. Subsequent corresponding working groups will be established to conduct further discussions on these issues.

While the five-year agreement is a non-binding Memorandum of Understanding (MOU), it still delivers a high-level message on potential future ambitions for collaboration between the U.S. and Taiwan. The agreement has seen broad support from within both governments and from the private sector, and effectively foreshadows possible future working relationships on trade, industrial policy, and innovation. It is also indicative of areas where both can potentially see significant gains from collaboration – including cooperation on medical, energy, and other critical technology supply chains, as well as exploring joint business opportunities in infrastructure, renewable energy sources like wind and solar, and related areas.

In the aftermath of the signed MOU, and under the banner of the ongoing discussions around a possible U.S.-Taiwan Bilateral Trade Agreement (BTA), this report will analyze the energy sector – one of the sectors identified for future collaboration – with a particular focus on renewable energy. While it may initially be difficult to conceptualize the role of energy in future U.S.-Taiwan trade dialogue and economic cooperation, the connection between energy and the collaborative framework within the EPPD is non-trivial. Energy is inherently tied to many of the areas proposed for cooperation, including science and technology, 5G, supply chains, and infrastructure. As the energy sector in Taiwan is currently undergoing an important transformation, Taiwan also holds unique advantages in the pursuit of digital, decentralized, and democratized energy networks.

As Taiwan presses ahead with its domestic energy and climate ambitions, it also stands to benefit from positioning itself as a trusted economic, technological, and security partner on energy issues. Taiwan already possesses one of the world’s most innovative and sophisticated industrial bases given its outsized role in the technology sector. Since the island is already trying to make its mark on renewable energy through ambitious deployment, Taiwan could play a key role as a partner for cutting-edge green technologies and services. This is true particularly as the global climate mandates from the Paris Agreement, along with individual national policies, attempt to underscore the urgency of supporting a global energy transition away from fossil fuels.

Discussions on Taiwan’s energy ambitions are still predominantly framed through a domestic policy and industrial development lens. Taiwan policymakers and domestic industry players have also focused on incentive mechanisms and clear renewable targets to attract inward investments and to promote socio-economic benefits such as attracting talent, engendering job growth, and stimulating localized supply chains. But as the sector matures and a green energy ecosystem is catalyzed, Taiwan can reformulate its approach to promote national techno-economic competitiveness and to differentiate itself as a cut above the rest. This would mean positioning Taiwan not only as a renewable energy hub but as a reputable and trusted global green energy leader.

Taiwan could reap significant benefits if it focuses not only on exporting its goods and services, but also on offering its technological, financial, commercial, and regulatory knowhow and practices to its global partners. As sustainability becomes intimately embedded in all corners of the global economy, an increasing number of governments will embrace “green growth,” and green energy will be a crucial engine for such growth.

This report will examine critical developments in Taiwan’s energy sector and energy policies. We will discuss potential opportunities for additional bilateral cooperation in new, value-added energy industries, and on finding productive areas of collaboration in support of both U.S. and Taiwan energy and climate evolution and ambitions.

Published by the US-Taiwan Business Council
Edited by Lotta Danielsson

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