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The subsea cable project connects Taiwan and Penghu to send surplus renewable energy back to the main island. (Photo: Ministry of Economic Affairs)
Taiwan, surrounded by water on all sides, operates an islanded power grid with no connections to neighboring countries. In the event of an energy crisis, it has no external support to fall back on. As a result, effective power management by the state-run utility Taipower has become essential. Yet as countries across the world deepen cross-border electricity cooperation to accelerate decarbonization, regional power grids are emerging as a major trend—one Taiwan can no longer afford to overlook.
In our special series Rewiring Asia, RECCESSARY explores regional grid developments around the world and assesses their relevance and feasibility for Taiwan, analyzing the key opportunities and challenges on the road ahead.
As Taiwan explores the feasibility of cross-border power imports from renewable-rich countries like the Philippines, the question remains: can the island realistically plug into a regional grid?
In this final installment of Rewiring Asia, RECCESSARY speaks with Walsin Lihwa—Taiwan’s first cable manufacturer to enter the subsea sector—and renewable energy supplier HDRE, which is expanding operations in the Philippines. Together, they unpack what it would take for Taiwan to join a regional grid—and what’s standing in the way.
Subsea grid links pose greater complexity than offshore wind
Walsin Lihwa has long seen opportunity in Taiwan’s offshore wind sector. In September 2023, the company partnered with global cable giant NKT HV Cables AB of Denmark to establish a joint venture—Walsin Energy Cable System (WECS)—focused on producing advanced submarine cables. With plans to lease land at Kaohsiung Port, the facility is scheduled to begin trial production of high-voltage export cables and medium-voltage AC submarine cables by late 2025, and commence full operations by 2027.
As the company’s cable business approaches its 60th year in 2026, WECS COO Wang Wei-hsiung (王維熊) noted that submarine cable manufacturing is a high-barrier industry with few global suppliers. Walsin aims to become one of the world’s top 10 submarine cable producers by 2027—one of just three in Asia outside of China.
Liu Chung-yu (劉忠祐), Vice President of Walsin’s Strategic Development Center, emphasized that submarine cables lie on the ocean floor where maintenance is extremely difficult. The cables must be buried—not simply laid—into the seabed. In addition to robust insulation against pressure, water, and corrosion, the cables often integrate optical fibers and sensors for communication and monitoring.
Subsea cables require high durability in sealing, pressure, and corrosion resistance. (Photo: iStock)
Beyond hardware, cable installation requires a full year of site surveys and geological studies to assess seasonal seabed changes. Earthquakes can shift the ocean floor, so detailed planning and environmental assessments are vital to avoid disrupting marine ecosystems. These projects rely heavily on professional engineering in the early phases before reaching environmental review.
Wang stressed that every subsea cable project must be customized to the seafloor’s depth, terrain, and client needs. The government would need to conduct large-scale feasibility studies and comprehensive planning in advance.
Deep-sea grid links face heightened challenges
Compared to offshore wind, cross-border regional grids introduce even more complexity—spanning longer distances, deeper waters, and harsher conditions. The Luzon Strait, which separates Taiwan and the Philippines, plunges to depths of 3,000 meters and is subject to powerful ocean currents, typhoons, and seismic activity.
Wang pointed out that only two subsea cable projects worldwide have tackled depths over 2,000 meters—both led by global firms Prysmian (Italy) and NKT (Denmark). While subsea technology is advancing rapidly, he added, regional grid integration will ultimately depend on having stable market frameworks and cross-border regulations in place. Upfront commercial and economic feasibility assessments are essential.
Wang Wei-hsiung, COO of WECS, aims to position Walsin Lihwa among the world’s top 10 subsea cable suppliers by 2027. (Photo: Daisy Chuang)
The Philippines offers new green energy opportunities
Beyond cables, Taiwanese firms are also eyeing partnerships in Southeast Asia. In December, HDRE signed an investment term sheet with ATE energy and the San Miguel Global Power (SMGP) group—subsidiary of the Philippines’ San Miguel Corporation—to co-develop solar projects.
The Philippines offers attractive fundamentals: abundant sunshine year-round, and rising power demand. Luzon Island hit a peak demand of 12.6 GW in 2023, while installed capacity stood at 19.9 GW. However, renewables made up just 15% of that mix. The government aims to raise renewables to 35% by 2030 and 50% by 2040. Recent regulatory reforms allow 100% foreign ownership of renewable projects and offer a fast-track “green lane” for permitting.
HDRE had already begun exploring the Philippines before formally incorporating in Taiwan in 2014. ATE Energy, its Engineering, Procurement, and Construction (EPC) partner, has a strong foothold in the local energy sector and is well-versed in land acquisition and grid connection rules. With SMGP’s involvement, the team plans to secure long-term power purchase agreements (PPAs) to monetize their solar assets.
Still, HDRE CEO Chou Shih-chang (周仕昌) emphasized that while cross-border grid technology isn’t the main obstacle, power trade between countries involves a wide array of issues. These include: identifying where power plants can be located, navigating legal frameworks for undersea cables in international waters, and—critically—establishing commercial mechanisms upfront. Key questions include: How much will the electricity cost? Will there be wheeling fees? Will Chinese-made components be allowed? Are import tariffs applicable? All of these need to be evaluated by the government early on.
HDRE CEO Chou Shih-chang says Taiwan can learn from Australia’s experience in building a comprehensive electricity trading framework. (Photo: Daisy Chuang)
Taiwan’s market isn’t ready yet—Rules must come first
Industry experts agree that while the technology for regional grids exists, Taiwan needs robust market structures before going further. In Europe, cross-border power trading is supported by well-established market mechanisms. Each transmission cable also has physical capacity constraints—Spain, for example, has just 2 GW of interconnection capacity with France, despite domestic demand of 90 GW. As a result, cross-border power makes up only a small share of its total electricity. Every country has its own energy priorities, and any regional grid would require a multinational market structure to match.
Chou noted that Taiwan still lacks even the domestic rules needed to trade electricity across different regions or among different suppliers. There’s no real-time market, no forward contracts, and no price discovery mechanisms in place. “Talking about international power grids is premature if we don’t even have domestic trading rules,” he said.
“Rules come first before operations,” Chou added, pointing to Australia as a model. Australia is aiming to retire its coal-fired plants by 2030, and its next goal is to balance renewable supply across regions. Its electricity market includes spot trading, long-term contracts, and financial derivatives—all underpinned by clear regulations and risk controls.
Chou also noted that if Taiwan’s next offshore wind projects (Phases 3-1 and 3-2) fail to connect by 2026–2027, supply-demand imbalances could emerge. In such cases, a domestic green power spot market could help assess the value of excess energy and provide diversified revenue streams for energy storage operators.
Looking ahead, Taiwan’s top priority should be improving the completeness of its electricity market rules. A stronger green power market would not only increase flexibility in renewable energy dispatch—it would also prepare Taiwan to participate in future regional grids.
'Rewiring Asia' special series
- Rewiring Asia: How global and ASEAN grids inform Taiwan’s next move
- Rewiring Asia: Inside Singapore’s strategy to build a regional grid for clean power
- Rewiring Asia: Why Taiwan struggles to plug into regional power grids
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