Business

Taiwan courts US collaboration in energy sector

• Publication Date：01/08/2010
• Source： Taiwan Today
• By  Manik Mehta

A high-powered delegation of Taiwan businesspeople, led by Deputy Minister for Economic Affairs Hwang Jung-chiou, visited the United States Nov. 29-Dec. 8, 2009 to scout for business opportunities and identify corporate partners for collaboration in the energy sector, as many U.S. states are giving priority to tapping “green energy.” One key stop for the delegation was the Taiwan-U.S. Green Energy and Technology Joint Conference in New York.

Taiwan highlighted two focal points—solar energy and electric-powered vehicles—where it has been doing pioneering work. The intention is not only to produce cleaner energy, in an attempt to cut carbon emissions, but also to reduce dependency on oil, which shook the world in 2008 when prices hit the ceiling at US$150 a barrel.

In this backdrop, the Taiwanese entrepreneurs in the delegation were “very excited” about tapping business opportunities in the U.S., where energy production, despite technological advancement, is still quite expensive compared to other countries.

In an interview with “Taiwan Today” in New York, Hwang observed that energy is a “hot subject.” “We all talk about cleaner, greener energy. President Obama has been emphasizing energy. It’s a very crucial issue both now and in the future,” he said.

“Our goal is to project Taiwan as a ‘green island’,” Hwang added.

Bilateral trade between Taiwan and the U.S. amounted to some US$61.6 billion in 2008. Further cooperation in the energy sector could open up new opportunities in both trade and investments, according to the deputy minister.

The U.S. energy industry is aware of the fact that Taiwan’s human capital reserve, with a pool of highly qualified workers, is another attraction.

Though Hwang’s visit was aimed at attracting investments and technology from the U.S., many American states are also looking at Taiwan as a source of investments.

So it was hardly surprising that many New York state officials, entrusted with promoting international trade and investments, flocked to the joint conference and listened attentively to what the Taiwanese delegates had to say.

They also had a few things to say themselves. Sam Natapoff, senior advisor to the Governor of New York on international commerce, pointed out that New York’s GDP had reached US$ 1.1 trillion in 2008. On its own, the state of New York would qualify as the world’s 11th largest economy.

“New York is the headquarters of 94 of the world’s Fortune 500 companies. Both the U.S. and New York maintain a robust trade with Taiwan. New York exported products worth US$ 1.5 billion to Taiwan in 2008,” he added.

The state would be a good place for Taiwanese green energy businesses, he said, as it provides financial incentives aimed at reducing carbon emissions. The American clean energy market is huge because of the government’s proactive involvement.

Despite the U.S. interest in attracting Taiwanese investments, Taiwan’s industry remained steady on its course to get American investments and increase cooperation between the corporate sectors of the two countries.

Taiwan’s first push was in the area of solar energy. Due to the growing demand for renewable energy sources, the manufacture of solar cells and photovoltaic arrays has grown dramatically in recent years.

Global photovoltaic production has doubled every two years, increasing by an average of 48 percent each year since 2002, making it the world’s fastest-growing energy technology. World solar photovoltaic (PV) installations were 2.826 gigawatts peak in 2007, and 5.95 gigawatts in 2008, a 110-percent increase.

The three leading countries—Germany, Japan and the U.S.—represent nearly 89 percent of the total worldwide PV installed capacity. Navigant Consulting and Electronic Trend Publications estimate worldwide PV installation outlook for 2012 at 18.8 gigawatts and 12.3 gigawatts, respectively.

Motech Industries, Inc., Taiwan’s largest solar energy cell company, is making substantial investments in the U.S. Taiwan’s prowess in R&D and industrial inventions, is also reflected in its impressive record of patents registered with the U.S. Patent Office, which rates Taiwan as the world’s fourth largest owner of patents.

“Taiwan is the world’s fourth largest producer of solar cells,” C.Y. Wang, vice chairman of the ROC-USA Business Council said. “We have set a target of 80,450 megawatts by the year 2025,” he said, adding that Taiwan was considering passing legislation on renewable energy.

Lan Chung-wen, director of the Photovoltaic Technology Center at Taiwan’s Industrial Technology Research Institute, suggested that the size of the global PV market was about six gigawatts. “Thus, the room for growth in PV is huge. Taiwan exported more than 900 megawatts of PV last year,” he said.

Explaining the rationale for seeking collaboration with U.S. companies, Lan said PV is still expensive to produce, and collaboration helps reduce costs. “Taiwan has a booming PV industry whose costs are reasonable and much lower than in the U.S.,” he said.

The plan by state-owned Taiwan Power Co. to build the island’s largest solar power plant in Kaohsiung County has also not gone unnoticed in the American energy industry. At the conference, American businesspeople were discreetly enquiring about the progress made by Taipower in setting up the plant, which is expected to start commercial operations this year with a capacity of 4,000 kilowatts.

In the field of electric vehicles, the second focus for the Taiwan delegation, the Ministry of Economic Affairs will create 10 parks for such vehicles. American participants in the joint conference expressed great interest in Taiwan’s growing capabilities in this sector.

Jamie Hsu, an advisor to the MOEA and a professor at Lawrence Technological University, said Taiwan’s automobile industry was “moving up the supply chain and elevated lifestyle. The future vision is to reinvent the automobile industry, enhance the Taiwan brand and provide it greater visibility for U.S. consumers, who are not aware of Taiwan’s capabilities,” he maintained.

In this context, Natapoff pointed out that Riva, an Indian company which recently showcased its electric-powered automobile at the Frankfurt International Motor Show, had set up its plant in New York State, preferring it over Michigan, the center of American car manufacturing. A major reason for Riva’s decision was New York’s incentives to companies engaged in clean energy technology.

The interest from the state government and local businesspeople in these two segments of Taiwan’s energy sector is also reinforced by the fact that despite the weak economy’s restraining effect on investments in the energy sector, U.S. utility photovoltaic activity has actually spiked over the last 18 months. With only 77 magawatts of utility-driven projects currently operating, U.S. utilities have announced a pipeline of more than 4.8 gigawatts of large, utility-scale PV projects.

This explosion of activity highlights the PV sector’s changing landscape and the key role utilities are expected to play going forward, according to a new study from Emerging Energy Research, which provides an analysis of the clean and renewable energy market.

The international push to reduce carbon emissions and dependency on petroleum also bodes well for the expansion of Taiwan’s electric-powered vehicle industry, with deals similar to that between New York and Riva a definite possibility.

—Manik Mehta is a free-lance writer based in New York.
Copyright © 2010 by Manik Mehta

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