The pilot will be at least 1MW — the first MW-size storage facility in Taiwan — and will be based on lithium-ion technology, the developer stated.
Ørsted will partner with the Changhua County Government, the state-run energy company Taipower, the Industrial Technology Research Institute (ITRI) and the National Changhua University of Education (NCUE).
The group will work together "to establish a consortium for energy storage research and promote local development of a green energy ecosystem", they said.
Martin Neubert, Ørsted’s executive vice president and CEO of wind power, said: "Energy storage technology has evolved rapidly, and the costs continue to decrease.
"Ørsted’s energy storage project in Changhua, — also our first storage project in Asia — will collaborate with local partners to enhance grid efficiency and stability, as well as set Taiwan at the forefront of the green energy industry," he added.
Ørsted, which recently announced it would set up an energy storage and solar unit, intends to source storage battery and integrated systems from local suppliers, it stated.
The exact size of the pilot will be decided once the Changhua County Government confirms the location of the project, an Ørsted spokesman said. Once this is confirmed, the project could be up and running within 12 months, he added.
It is hoped a battery-based energy storage system could "support the renewable energy build-out and the green transition in Taiwan", the companies added.
Ørsted has four offshore wind projects with a combined capacity of 4.2GW under development off the coast of Changhua county. It also owns 35% of Taiwan’s first offshore project, Formosa 1, which is currently 8MW but could be extended up to 128MW.
In November 2016, the company opened a new office in Taiwan’s capital city of Taipei in an effort to boost offshore development.
Announcing the storage pilot project, Neubert added: "I'm impressed with the Taiwanese government's strong ambition for the green energy transition and its progressed and comprehensive regulatory framework.
"I believe Taiwan has potential to become a green energy hub in Asia like Denmark is in Europe."
The Taiwanese government has a target of at least 3GW of wind power offshore and 1.2GW onshore by 2025 to help meet its renewable energy target of 20%.
The country currently has just 8MW of installed offshore capacity and 682MW onshore. It sourced just 6.5% of its electricity from renewables in 2016.