An economic analysis on Taiwanese wind power and regional development

Due to environmental concern, Taiwan aims to remove nuclear power from its energy structure. Since an increase in fossil fuel-based generation is foreboded by law, the lost nuclear power can only be replaced by renewable energy sources. The maritime climate and constant monsoons make wind power a feasible alternative energy source to Taiwan. With more than 300 potential wind farm sites under consideration, the government does not have enough information to determine the best sites in terms of power generation and capital investments. To explore such information, this study employs a lifecycle analysis to identify the economic components of these sites under the estimates of wind speed data and potential wind power generation obtained in our previous study. We also use a sensitivity analysis to examine the impact of construction cost, maintenance cost, energy sale, and emission trade on the site selection decision. We show that variations in construction costs and energy prices have larger impacts than greenhouse gases prices. In addition, the results point out that most sites pass the cost-benefit examination, but site rankings may alter in the face of capital rationing and climate change. Some policy implications derived from the results are discussed in detail.