The precarious finances of Taiwan’s sole electricity utility are threatening the island’s clean energy ambitions, tarnishing its attractiveness as a manufacturing hub for the world’s biggest chipmakers and even adding to its vulnerability in the event of a conflict with China.

Taiwan Power Co. is forecasting another massive loss in 2023 and doesn’t see much of an improvement this year. The state-owned company, known as Taipower, has been unable to fully pass on higher costs for gas and coal to customers due to political pressure to keep power prices low. It’s also made a bet on offshore wind, a renewable technology that’s facing difficulties across the world as costs and delays increase.

If Taipower can’t make sufficient progress on clean-energy generation, the island could potentially lose some of its allure as a destination for chip manufacturing. Taiwan Semiconductor Manufacturing Co. (TSMC) — the world’s largest chipmaker that supplies the likes of Apple and Nvidia — has a target of using 100% renewables by 2040.