In a country so desperately short on natural resources as Taiwan, particularly those associated with power generation, there may just be a way out of its ongoing energy predicament.

With long-time overseas firms pulling out of wind investment, nuclear power set to be switched off once and for all in the coming weeks, and the very real and present danger of a Beijing-led chokehold on LNG shipping routes to the island, Taipei is quite literally sat atop the solution to many of its power woes; geothermal energy.

Whilst geothermal is still a relatively new concept in power generation in Taiwan and project sites are still being developed, as Lee Chun-Li, the Deputy Director General of Taiwan’s Energy Administration recently said to Newsbase, “unlike solar and wind power, geothermal energy can provide electricity continuously, 24 hours a day, making it a stable and reliable renewable energy source for baseload power generation.” As such, “geothermal energy has been designated as a "Pioneering Energy" in Taiwan's 12 Key Strategies for achieving net-zero emissions” Lee continued.

To this end, geothermal projects on the East Asian island nation are currently underway in the Yangminshan National Park area north of Taipei, and Yilan County on the northeast coast.

This is all part of Taiwan’s goal to achieve a total of 6GW of cumulative geothermal capacity by 2050 according to Lee. As of 2024, according to the official numbers, five geothermal power plants have been completed, with a combined installed capacity of 7.49MW. The largest of these is Qingshui Yiyuan in Yilan at 4.2MW, Lee says.

The Taiwanese government official also says the country aims to achieve 20MW of cumulative geothermal capacity by the end of 2025 and 200MW by the end of the decade. Both numbers, current rates of installation considered, pose a challenge at the very least.

Swedish solutions

That’s where Baseload Capital comes in.

Based in Sweden, the company “invests in geothermal projects worldwide,” Chairman and CEO of subsidiary, Baseload Power Taiwan, Van Hoang says when speaking to Newsbase at his office in Taipei.

Already active in Iceland and the US, Van explains, "Japan was our first market entry in Asia and Taiwan is the second, so we founded the company in Japan in 2018 and in Taiwan in 2019.”

Fast-forward almost six years and the company in Taiwan is following a greenfield approach with a “couple of projects ongoing but we haven’t (established) a power plant yet.”

When this does happen, output in the country and East Asia will increase significantly. “We have three pilot projects in Japan. These are quite small and utilise existing wells to generate heat, but they are already online,” Van says.

In Taiwan meanwhile, another nation on the infamous Pacific Ring of Fire, the company is currently developing two projects. “One is in Hualien, one is in the Datun Mountains” (Yangminshan National Park). Setting up these sites follows a tried and tested routine. “We start with the wider area to look at the geological setting, to locate the reservoir, then we have a focus.”

The NIMBY element

Key to any development in the highly NIMBY-conscious Taiwan with its limited landmass and high population density are benefits geothermal will bring to local regions.

As such, with global geothermal investment projected to reach $1 trillion by 2035 and $2.5 trillion by 2050, Van sees local communities helped and not hindered by local geothermal projects. “If those figures are dedicated for the industry to develop power plants it is a positive as we need renewable energy. This requires a lot of work and exploration, including surface exploration and exploration drilling” he says.

“So if the majority of that is in power plant construction it is a positive” as there are, he explains, multiple methods to extract geothermal power.

“By extracting heat the temperature goes down. Even with lower temperatures the heat itself can be used for industrial use.” In rural communities on the east coast of Taiwan this could be used “in drying food, or in farming” as this involves merely piping the heat generated underground to the surface.

Hot springs too make up a large sector of the regional economy on Taiwan’s Pacific seaboard. Van adds that “across Asia (hot springs) use heat exchange to heat cold water at hot springs. These require a heat of 40 degrees or lower. And once water loses its temperature we can inject water back into the subsurface reservoir and because the earth is naturally heated it will heat up again and can be used again in cyclic form.” Bringing positive results to the hot spring-rich county of Yilan, Van points out that “there is a tourist attraction, the largest tourist attraction in the county with a power plant inside and hot water to cook corn, eggs, chicken etc. This creates a local experience” of geothermal at work in the community Van adds. It also “creates different income streams “and creates a lot of jobs in local markets.”

Education, education, education

Key to helping a still relatively new form of power production gain understanding in rural communities is education. In developing geothermal plants, one of the most commonly stated worries involves pollution caused by development.

“First off, it is clean, with near to zero emissions and it is also a form of power available if tapped, 24/7. It will never be affected by weather conditions,” Van says, before adding “this makes it a beneficial power source in stabilising the grid” something that is a continual worry in Taiwan.

Responding to a question on geothermal’s role in domestic energy security, Van continues, “this could also help Taiwan’s overall energy security” – being a local source rather than imported form of energy susceptible to shipping issues.

“It is true biogas is also a form of home-grown energy but the advantage of geothermal (over biogas) is the range of green businesses linked to geothermal. This goes back to how local communities can benefit.”

However, with Taiwan living daily in the shadow of an overbearing neighbour seemingly intent on ‘re-unifying’ two entities that have never actually been governed by one authority, speed is of the essence.

Alternative to wind and solar

Asked how long it might be before geothermal is seen as a viable alternative to solar and wind – if ever – Baseload’s Van answers realistically “it depends how much you invest in the industry, in exploration, and understanding the reservoir. You need to know where the reservoirs are, what are the specifics of the site and how you tap into it.”

“Looking abroad to the more mature geothermal markets, they can build a 20-40 MW geothermal site in five to seven years. So if we have that as a best practice benchmark, we could develop some projects in Taiwan in places like Yangminshan where there is believed to be a potential of around 200 MW using conventional technology at a relatively shallow depth” - of 2000m.

Larger power plants could then be developed up to 800MW but “you do it in phases, perhaps 100 MW first, then expand.”

Looking forward

“If I envision (the local situation) 50 years from now,” he says, “if you look at the ring of fire, Taiwan is the only market that is minimally tapped. Indonesia, The Philippines and New Zealand all have output measured in gigawatts, Japan has around 600 MW and Taiwan has enormous potential, so 50 years from now you will see a lot of geothermal power plants. It will be integrated into society and I think it will be up to industry how to use it as an ecosystem that can create benefits for the local community.”

It’s all about “what you know about the situation underground and how fast the investment comes in” he concludes.