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Renewable Energy 31 (2006) 1718–1732
www.elsevier.com/locate/renene
Renewable energy perspectives and support
mechanisms in Taiwan
J.H. Wu, Y.H. Huang
Department of Resources Engineering, National Cheng Kung University, Tainan 701, Taiwan
Received 3 February 2005; accepted 2 September 2005
Available online 19 October 2005
Abstract
The use and development of renewable energy has become a major policy incentive in Taiwan.
Some measures, promoting renewable energy, were previously instituted, but many legal and
institutional barriers, hampering the development of renewable energy, remain; thus, it is necessary
to encourage discussion to eliminate barriers and implement support mechanisms. This article
reviews current measures and addresses the perspectives and support mechanisms of renewable
energy in Taiwan. Basically, Taiwan’s short, medium and long-term development progress and
strategies for renewable energy sources can be seen to correspond to current international initiatives;
in practice, however, many issues (such as establishing domestic renewable energy technologies and
inter-departmental coordination mechanisms) must still be addressed, in order to actively promote
the utilization of renewable energy.
r 2005 Elsevier Ltd. All rights reserved.
Keywords: Renewable energy; Support mechanisms
1. Introduction
The challenge of rapidly increasing global greenhouse gases (GHGs), and their pervasive
impact on humanity, has spurred international initiatives for limitations on GHG
production. Among others, the Taiwanese government is paying close attention to this
issue. A National Energy Conference was convened in 1998, in order to promote the
Corresponding author. Tel.: +886 6 2096174; fax: +886 6 2380421.
E-mail address: hwaa@mail.ncku.edu.tw (J.H. Wu).
0022-5096/$ - see front matter r 2005 Elsevier Ltd. All rights reserved.
doi:10.1016/j.renene.2005.09.007
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utilization of new and clean energy sources. The target share for renewable energy, in the
total energy supply, is 3% by the year 2020.
Recently, according to the Challenge 2008: National Development Plan and the
Nuclear-free Homeland Policy, the government of Taiwan has offered favorable price
incentives to renewable energy producers, for up to 12% of the country’s total power
generating capacity (about 6500 MW). Furthermore, according to the Nuclear-free
Homeland Action Plan, a budget of NT$3 billions (US$90 millions) will be made
available each year, commencing 2004, to promote the development of clean energy and
energy saving industries. This shows that the use and development of renewable energy has
become a major policy incentive for the Taiwanese government.
Some measures, promoting renewable energy, were previously instituted in Taiwan;
many legal and institutional barriers, hampering the development of renewable energy
remain, however. Discussion must be encouraged to eliminate barriers and build support
mechanisms. This article investigates issues related to the potential and current incentive
measures of renewable energy in Taiwan. The perspectives and support mechanisms of
renewable energy are also addressed, with the goal of helping to promote the utilization of
this clean energy.
2. Renewable energy development frameworks and barriers
2.1. The frameworks of renewable energy development
Energy-supply systems have historically been very large, in order to achieve economies
of scale; renewable energy systems are no different. This article applies the framework of
the President’s Committee of Advisors on Science and Technology (PCAST), to analyze
the development progress of renewable energy from four phases [1] (Fig. 1).
Commercial
scale
Scale
Cost buy down
Medium
Small
Research & Development
Demonstration
Cost buy down
Widespread Deployment
Barriers
• Difficulty of capturing
• Difficulty of capturing
benefits of demonstration
• Financing of
• Longtime horizons
• Longtime horizons
• Cost uncertainty
• High risks
• Risks
• Technological and
benefits of R&D
• Large capital costs
incremental cost
other risk
Fig. 1. Development progress of renewable energy.
• Price for competing
technologies doesn’t
include externalities;
• Lack of finance
• Lack of information
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2.1.1. Research and development phase
The research and development phase focuses on moving a technology toward a
potentially marketable application or product. The characteristics of this phase include
long paybacks and high investment risk.
2.1.2. Demonstration phase
The demonstration phase typically consists of building one or more energy-technology
manufacturing or energy production/use facilities, of increasing scale, to prove the
technical and potential commercial viability of the technology.
2.1.3. Cost buy-down phase
Once a technology has been demonstrated on a potentially viable commercial scale,
there remains a long process of building a series of such systems, to scale up equipment
manufacturing facilities, and also to learn how to reduce manufacturing, system
installation, and operations and maintenance costs to competitive levels. As cumulative
production volume increases, costs will be reduced until some innovative technologies
become fully competitive with conventional ones.
2.1.4. Widespread deployment phase
After a new technology has proceeded through the R&D, demonstration and cost buydown phases, it is ready for large-scale deployment. Even if the new technology then
appears fully ‘‘cost-effective’’, some significant barriers typically remain, to its widespread
deployment. These barriers can be alleviated through educating end-users on the benefits
of renewable energy, or by legislation supporting renewable energy.
In addition, according to the ‘‘triangulation’’ framework proposed by International
Energy Agency (IEA), the development progress of renewable energy may also be viewed
from three different directions [2]. The triangulation framework is shown in Fig. 2.
2.1.5. A research development and deployment perspective
The first perspective focuses on market learning processes, the ‘‘learning-by-doing’’
effects, which come with its use, improve technical performance and reduce costs.
R&D+
Deployment
Good Market
Development
Market
Policy
Market
Barriers
Transformation
Fig. 2. Triangulation framework.
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2.1.6. A market barriers perspective
The second perspective focuses on an economic analysis of market barriers. In this
perspective, the emphasis is on understanding such barriers and where government may
play a legitimate role in reducing them. Economic analysis, and the discipline it promotes,
is central to the barriers perspective.
2.1.7. A market transformation perspective
The third perspective focuses on market players and gives practical techniques for the
transformation of energy markets. In practical terms, markets must be built for renewable
energy technologies. The behavior and roles of market players, how their attitudes guide
decisions, and how these attitudes can be influenced, are the main concerns.
To conclude the above two frameworks, in the renewable energy development progress,
there are higher risks associated with the research and development phase; thus,
governments can play a valuable role by implementing policies and programs supporting
the initial R&D of renewable technologies. Owing to some existing market barriers, during
the demonstration phase and cost buy-down phase, economies of scale must be achieved,
so costs can be reduced. Renewable energy technologies have some market indetermination, however, causing high investment risk and financial problems; government support
(such as a subsidies) can assist in accelerating these phases. Finally, during the widespread
deployment phase, renewable energy can be actively promoted through educating endusers about its benefits; legislation promoting renewable energy, or levies on the
consumption of fossil fuel, can also help.
2.2. Renewable energy development barriers
As with other energy technologies, renewable energy will be faced with barriers related
to technologies, economies, institutions, laws and public-acceptance during the development process. Table 1 provides a summarized list, along with some typical measures that
can be taken to alleviate these barriers [2].
Technical barriers include buyer’s risk and technology-specific barriers; economic
barriers include price distortion, uncompetitive market prices and finances; and
institutional barriers include inefficient market organization in relation to new
technologies.
Compared with renewable energy development frameworks, it can be seen that buyer’s
risk belongs to technical demonstration during the demonstration phase, which can be
removed by establishing demonstration systems that prove technical viability. Uncompetitive market prices and financing, related to barriers during the cost buy-down phase, can
be removed through learning cost subsidies and financial assistance to accelerate the cost
buy-down of renewable technologies. Price distortion and technology-specific barriers,
related to the widespread deployment phase can be removed through internalizing
externalities and connecting measures to related renewable energy, in order to accelerate
the widespread use of renewable technologies.
In addition to these technical and economic barriers, we must also be concerned about
legal and institutional barriers, which may hinder the development of renewable energy.
Take land-use in Taiwan, e.g., according to the Regulations for the Land-Use of NonCities, permission has already been given to build facilities related to renewable energy.
But renewable energy facilities, built on agricultural, forestry or state-owned land must
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Table 1
Types of market barriers, with key characteristics and measures
Barriers
Technical barriers
Buyer’s risk
Technology-specific barriers
Economic barriers
Price distortion
Uncompetitive market price
Key characteristics
Typical measures
Difficulty in forecasting over an
appropriate time period
Often related to existing
infrastructures
Demonstrations
Costs associated with incumbent
technologies may not be included
in their prices
Internalize ‘‘externalities’’
Taxes
Removal of subsidies
Scale economies and learning
benefits have not yet been realized
Learning investment
Additional technical
Connect measures to other
important business issues
development
Finance
Institutional barriers
Inefficient market organization in
relation to new technologies
Initial cost may have high
threshold
Special funding
Third-party financing options
Inappropriate incentives.
Established companies may have
market power to guard their
positions
Restructure markets
Market liberalization
change their stated purpose, which is not easy as it requires an inter-departmental
coordination mechanism.
Furthermore, measures taken by other countries, in the effective promotion of
renewable energy, are a valuable resource. The measures adopted by other countries are
concentrated on ‘‘financial incentives’’, ‘‘feed-in tariffs’’, ‘‘guaranteed prices for electricity’’
and ‘‘renewable portfolio standards’’ (RPSs) [3–6]. This also illustrates that the cost of
renewable energy is still high and must rely on government support for effective
promotion.
3. Status of renewable energy in Taiwan
3.1. Potential of renewable energy in Taiwan
Taiwan is a densely populated island with limited natural resources. Due to rapid
economic growth and a subsequent increase in energy consumption, Taiwan’s GHG
emissions are also increasing. In addition, due to a lack of self-sufficient energy resources,
Taiwan relies on imports for the majority of its energy; exploiting indigenous energy,
therefore, is becoming more and more critical. Taiwan’s potential benefits from renewable
energy are shown in Table 2 [7,8].
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Table 2
Taiwan’s renewable energy potential
Items
Potential for renewable energy in Taiwan
Major technologies
Solar energy (for heat
supply)
The potential is around 1.8 millions square meters
based on an estimate of the area of solar collections in
Taiwan
Solar water heaters
Solar energy (for
electricity)
The potential is around 12 thousand MWp generation
capacity, based on an estimate of the solar
photovoltaic settings for residences, commerce, public
facilities and others
Solar photovoltaic
Biomass
The potential is around 2000 MW generation
capacity, based on biomass investigation in Taiwan
including MSW, RDF, petroleum cokes, sugar cane,
rice husks, black liquor, scrap tires, paper rejects and
biogas
Different kinds of wasteto-energy technologies
Geothermal energy
The potential is around 1000 MW generation
capacity, based on investigation of over 26 major
geothermal sites in Taiwan
Geothermal generation
systems
Geothermal heaters
Wind energy
The potential is at least 1000 MW generation capacity
in inshore wind power systems, and 2000 MW
generation capacity in offshore wind power systems,
based on investigation of many sites in Taiwan,
having a wind speed of more than 5 m/s
Offshore wind power
systems
Inshore wind power
systems
Hydro energy
The potential is around 5110 MW generation
capacity, based on investigation of over 129 rivers in
Taiwan
Hydropower generation
systems
From Table 2, it can be seen that renewable energy has great potential in Taiwan,
although the quality of renewable energy may greatly differ, according to geographical
positioning. Barriers must be eliminated and related support mechanisms developed, to
facilitate the utilization of renewable energy in Taiwan.
3.2. Current renewable energy measures
Taiwan’s current incentives to promote renewable energy are shown in Table 3 these
measures include system subsidies (installation and exploration), financial incentives and
electricity purchase subsidies.
Having implemented these incentives and provided subsidies, the renewable energy
status, in 2003 was as follows [9]:
The cumulative installed systems for solar water heaters exceeded 300,000 households,
with a corresponding installation rate (by household) of 4%. The installation area for heat
collectors had reached 1,200,000 m2; this is the 10th largest installment base in the world.
For PV demonstration systems, 74 subsidy applications were approved, with an
accumulated installation capacity of 512 kWp. For wind power demonstration systems,
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Table 3
Current incentives for promoting renewable energy in Taiwan
Items
System subsidies (installation
and exploration)
Solar
Installation of photovoltaic
system:
NT$150,000/kWp (about
US$4500/kWp), less than
50% of installation cost
Administration agency,
public school and hospital
suitable for demonstration
are subsidized 100% for
system under 10 kW
Solar thermal water system:
NT$1000–3000/m2 (about
US$30–90/m2)
Wind
Geothermal
Subsidies for purchased
electricity
Subsidy of NT$0.5/kWh
(about US$0.015/kWh) for
landfill gas power system
Taipower’s interim power
purchase measure (2003)
(1) An interim measure
before the ‘‘Renewable
Energy Development
Bill’’ is passed by the
Congress
(2) Total quota: 300 MW
renewable energy
(3) NT$2/kWh (about
US$0.06/kWh) paid to
approved applicants
for 10 years can be
extended up to 20 years
Financial incentives
Statute for Upgrading
Industries
13% tax credit for
investment in energy
conservation, renewable
energy utilization
equipment
2-year accelerated
deprecation
Low interest loans
Wind power demonstration
system: NT$16,000/kW (about
US$480/kW), less than 50% of
installation cost
Exploration of geothermal
resources: up to NT$20
millions (about US$0.6
millions) per site
subsidization approval was given for a total capacity of 8.54 MW (three demonstration
sites).
In geothermal energy, the Bureau of Energy is working with local governments to
construct demonstration generation systems for multi-purpose applications. Their target is
to assist in promoting at least 5 MW of geothermal power generation in 5 years.
In hydropower, total installed capacity is around 1900 MW (excluding pump storage
hydropower), while the capacity of small hydropower (smaller than 20 MW) is around
130 MW.
In biomass energy, more than 70 biomass installations are in existence, with capacities of
486 MW power generation and 920 kton/year heat production.
3.3. Review of current measures
The measures currently in place to promote renewable energy include system subsidies
(installation and exploration), financial incentives and subsidies for purchased electricity;
they are distributed over many laws, however. In order to more actively support renewable
energy, these measures should, in the future, be integrated into one law. Taking as
examples, the general price guarantee for each kWh of green power granted in Germany
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Measures
Goals
J.H. Wu, Y.H. Huang / Renewable Energy 31 (2006) 1718–1732
Setting Targets to Ensure
Investment Recovery
Target
Purchase
Rates
Establish Specific
Foundation
Contens
1. The incentive target is set for
6,500 MW
2. Rate of electricity is clearly
stipulated at 2 NT$ for each kWh
produced
3. Establishment of a foundation.
Utilities take charge to collect the
differences and reflect to the
electricity tariff.
Establishment of
Management System
Scope for
Incentive
Inter
connection
Reporting/
Auditing
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Removing non-technical
Barriers
Land
acquisition
Demonstration
1. Local utilities are obligated to
provide interconnection services
and to purchase the renewable
electricity.
1. For certain renewable
installation, it is allowed
to have the right to use
the State-own land.
2. Local utilities are obligated to
provide back up power services.
2. Demonstration for application
of PV
3. The tie line is taken care by
renewable operators.
3. Other non-electricity
applications
Fig. 3. The key elements of Renewable Energy Development Bill.
and the capacity auctions practiced in the United Kingdom. By following the example of
Germany, a law could be drafted that would offer price incentive grants to renewable
energy producers.
In Taiwan, renewable energy incentives have concentrated on financial assistance (such
as system and purchased electricity subsidies), but have rarely involved legal or
institutional assistance (such as land-use, building codes, grid connection standards,
etc.). In light of this, a Renewable Energy Development Bill has been submitted to the
Legislative Yuan for ratification to establish a legal environment for renewable energy,
facilitating its sustainable utilization. The key elements of Renewable Energy Development
Bill are shown in Fig. 3. Hence, rapid passage of the Renewable Energy Development Bill
by the Legislative Yuan is a crucial factor in expanding the market of renewable energy in
Taiwan.
4. Taiwan’s future renewable energy target and progress
4.1. The future target of renewable energy in Taiwan
The National Energy Conference in May 1998 set a 3% goal for renewable energy
utilization by 2020 in Taiwan. In 2003, the renewable energy development target of Taiwan
was amended to enhance the determination toward the utilization of clean energy. The
target now is that the share of renewable energy in terms of installed power generation
capacity would be 12% of the total in the long term. By the end of 2003, total installed
capacity in Taiwan reached 40,039 MW, of which renewable was 2569 MW (including
conventional hydro 1909 MW), accounting for 6.4% of the total. Power generation in 2003
totaled 208.9 TWh and total electricity consumption in 2003 amounted to 196 TWh. The
future targets (2020) are shown in Fig. 4, of which 46% will be coal-fired, 3% oil-fired,
25% gas-fired, 9% nuclear, 5% pump storage hydro and 12% renewable energy (about
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Gas
25%
Nuclear
9%
Pump
storage
hydro
5%
Oil
3%
Renewable
Energy
12%
(6,500MW)
Geothermal
0.28%
(150MW)
Coal
46%
Conventional
hydro 4.62%
(2,500MW)
Wind energy 2.76%
(1,500MW)
Solar energy 1.85%
(1,000MW)
Biomass 2.50%
(1,350MW)
Fig. 4. Future targets (2020) for renewable energy in Taiwan.
6500 MW). The planned target is expected to be reached by 2020, after which there will be
a return to the market mechanism [10].
Furthermore, the Executive Yuan adopted a Nuclear-free Homeland Action Plan for the
Establishment of a Nuclear-free Nation in 2003. A budget of NT$3 billions (US$90
millions) will be made available each year, commencing 2004, to promote the development
of clean energy and energy saving industries. When this target is reached, the proportion of
renewable energy to total power generating capacity in Taiwan will be equal to that of
developed countries, like Japan and Germany. As shown in Fig. 5, the future targets of
renewable energy in Taiwan have high density development as a goal (181 kWh/km2).
Electricity from renewable sources will account for 12% of overall electricity production in
the future, equal to Japan and Germany [10]. In the renewable energy categories, Japan
will have high development in hydropower, which accounts for about 68% of its renewable
electricity generation; Germany will have high development in wind power, which accounts
for about 54% of its renewable electricity generation; and Taiwan will have balanced
development with renewable energy feasibility.
4.2. The future development progress of renewable energy in Taiwan
Taiwan has already introduced renewable energy and energy conservation technologies
through the international stages of APEC, with bilateral and multilateral meetings.
Now, according to the plans of the Bureau of Energy an overview of the short, medium
and long-term development progress and strategies of renewable energy in Taiwan is given
in Table 4 [11].
As shown in Table 4, the short, medium and long-term development progress and
strategies for renewable energy in Taiwan, corresponds to international initiatives
(renewable energy development frameworks). The development progress of renewable
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Geothermal
Energy
4%
Solar PV
4.7%
Geothermal
Energy
3%
Biomass
34.9%
Solar PV
3.9%
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Biomass
19.9%
Wind Energy
4.5%
Wind Energy
14.5%
Hydro Energy
68.1%
Hydro Energy
41.8%
Taiwan:6,500MW/27.5TWh (power
generation from renewable account
for 12% of total power generation)
Development density above
181KW/km2
Biomass
18.1%
Solar PV
1.5%
Japan:32,920MW/120.8TWh (power
generation from renewable account for
10.8% of total power generation)
Development density above 89KW/km2
Hydro Energy
26.3%
Wind Energy
53.9%
Germany:28,200MW/76TWh (power
generation from renewable account for
12.5% of total power generation)
Fig. 5. Comparison of the future renewable energy targets for Taiwan, Germany and Japan.
energy can be divided into ‘‘research and development’’, ‘‘demonstration’’, ‘‘cost buydown’’ and ‘‘widespread deployment’’ phases. According to the potential and development
of renewable energy in Taiwan, the government will plan the work of each phase in detail,
so that the utilization of renewable energy could be actively promoted.
At present, the development of renewable energy in Taiwan is in the initial stage; related
green market mechanism (such as Tradable Green Certificates) has not been introduced.
Considering the relative cheap electricity rate in Taiwan and high developing cost of
renewable energy, it would be very difficulty if not impossible to promote without
governmental support.
5. Support mechanisms to promote renewable energy
Long-term, renewable energy consumption is targeted to reach 12% of the country’s
total power generating capacity. It is important that related support mechanisms are in
place during renewable energy development in Taiwan, to seek a balance among economic
development, energy security and environmental protection.
The framework for the future promotion of renewable energy in Taiwan is shown in
Fig. 6. The keys to its success lie in building a nurturing environment to promote
renewable energy, by exploiting the greatest energy benefits and establishing domestic
renewable energy industries. The progress of renewable energy is dependent on policy, as
well as legal and institutional mechanisms.
5.1. Policies to promote renewable energy
5.1.1. Research and development phase
The government can strengthen the existing working group by including academics, as
well as experts from industry, the private sector and relevant agencies. In addition,
renewable energy R&D can be conducted jointly by related enterprises, to encourage
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Table 4
Short, medium and long-term development progress and strategies for renewable energy in Taiwan
Products/
technologies
2001–2004 years
2005–2010 years
Solar thermal
Cost buy down
Widespread deployment
Photovoltaic
Strengthen R&D
and demonstration;
establishment of
domestic PV
industry
Renewable portfolio
standards for
electric power
industry and
demonstration
Geothermal energy
1. Demonstration generation systems with multi-purpose utilization
2. Renewable portfolio standards for electric power industry
Wind power
Cost buy down (a
guaranteed price of
electricity)
Cost buy down (a
guaranteed price of
electricity)
Renewable portfolio standards for electric power industry
Demonstration
Cost buy down
Waste gasification
R/D and
demonstration
Cost buy down
Ethanol fuel
Strengthen R&D
and demonstration
Cost buy down
Biodiesel
Strengthen R&D
and demonstration
Cost buy down
Biomass gasification
Long term R&D
Demonstration and
cost buy down
Hydropower
Biomass
Biogas generation
2011–2020 years
Renewable portfolio
standards for
electric power
industry
Widely deployment
Renewable portfolio standards for electric power industry
Widespread
deployment
commoditization of technology, in the development of domestic renewable energy.
Industry-related alliances are being continuously established in Taiwan. A recently formed
Photovoltaic Industry Alliance joined force with industry, institution, government and
academia toward the development and utilization of PV system in Taiwan [12]. It can assist
in technology transfer, technology consultancy and personnel training to enhance the PV
industry’s competitiveness.
5.1.2. Demonstration phase
Demonstration systems will be established for renewable energy in Taiwan. Measures
for subsidizing renewable energy demonstration systems must also be developed to
promote innovative technology (such as solar cities, wind farms and geothermal parks), in
order to actively build a renewable energy demonstration environment. A recently Solar
City Promotional Program implemented by Bureau of Energy, Tainan, Chiayi and Taipei
cities were chosen as sites for the solar city competition. In April 2005, the three entries will
be evaluated, and the best model will win the NT$150 millions ((US$4.5 millions)
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Key Issues
Building a
Nurturing
Environment to
Promote
Renewable
Support Mechanisms
At Research &
Development Phase
The Medium and Long Term Targets
Examining the promotion
of renewable energy and
making adjustments
according to cost changes
Developing domestic
renewable energy at high
utilization density
Exploiting the
Greatest Energy At Cost Buy-Down
Benefits
Phase
At Widespread
Deployment Phase
Perspectives
A budget of NT$3
billions (US$90 millions)
each year commencing 2004
to promote development of
clean energy and energy
saving businesses
At Demonstration
Phase
Development
of Renewable
Energy in
Taiwan
1729
Innovative technology
demonstration system
(solar cities, wind farms,
geothermal parks)
The power generating
capacity from renewable
energy accounsts for 12
percent of the island's total
power generating capacity
in 2020
Seek a Balance
among
Economic
Development
Energy Supply,
and
Environmental
Protection
in Taiwan
Renewable energy
industries from Germination
to Maturity
Establishing
Domestic
Renewable
Energy
Industries
Establishing leadership
in world renewable
technology
Other Auxiliary
Support Machanisms
The output value in
industries of solar PV,
solar water heaters, and
biomass promoted, up to
NT$ 10 billions / year
(US$300 millions)
The Medium Term
Targets (to 2010)
The Long Term
Targets (to 2020)
Fig. 6. Future framework for promoting renewable energy in Taiwan.
demonstration subsidiary. As for the geothermal park, Ilan city has received approval from
the Ministry of Economic Affairs to develop its geothermal energy resources and is working
on a project that the local government hopes will produce 5000 kW of power by 2007.
5.1.3. Cost buy-down phase
It is government support (such as system subsidies or financial incentives) that will
accelerate this phase. The draft of the Renewable Energy Development Bill will offer price
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incentive grants to renewable energy producers (US$0.06/kWh). Also, the Statute for
Upgrading Industries provides corporations with incentives to procure renewable energy
equipment in the form of an accelerated depreciation plan, tax credits and low-interest
loans.
At present, due to the delay in passage of the Renewable Energy Development Bill, the
state-owned utility Taiwan Power Company agrees an interim measure to purchase
renewable energy power at the guaranteed price (US$0.06/kWh) for a period of 10 years.
This measure will be available until the passage of the Renewable Energy Development Bill
or a cap of 300 MW. By proposing the fixed feed-in tariff for renewable energy at US$0.06/
kWh, investment on mature renewable energy and sites with better resources, such as wind
power with better wind conditions, small hydropower and biogas power plant would be
encourage preferentially. In addition, the cost to install PV capacity is about US$9000/kW
in Taiwan, as a result, the levelized cost is about US$0.42/kWh. Considering the
development potential of PV in Taiwan, apart from a general price guarantee for each
kWh anchored in the Renewable Energy Development Bill, Government could also
subsidize for the equipments of PV and set gradual targets to diffuse PV step by step.
5.1.4. Widespread deployment phase
This phase focuses on dissemination to end-users and educates them on the benefits of
renewable energy technologies and their effective use. The government could play the main
drivers of such development as they set the legislative framework and provide large shares
of funding. Additionally, the mass media could also play an important role in
communicating the benefits of renewable energy to the public and thereby raising general
awareness and acceptance. In Taiwan, the renewable energy website has been established,
in order to make the information widely available. The educational TV programs about
renewable energy issues also already exist.
5.2. Legal and institutional mechanism for promoting renewable energy
With both legal and institutional mechanisms, renewable energy will enter the energy
market through legislation. For example, a Renewable Energy Development Bill has been
submitted to the Legislation Yuan for approval so as to remove non-technical barriers.
According to the Bill, it is allowed to have the right to use the state-own land for certain
renewable installation. Utilities are obligated to provide interconnection services and to
purchase the renewable electricity. Furthermore, the Green Procurement Law can be
combined with renewable energy to guarantee the use of renewable energy, and related
laws can be modified, in order to actively promote the use of renewable energy. In
addition, an RPS is the international trend to encourage development of renewable energy.
The old version of the Revised Draft of Electricity Law in Taiwan has provided an RPS.
However, obligation has been deleted in the new version. This violates the trend toward the
development of international renewable energy; thus, efforts should be made to amend the
Revised Draft of Electricity Law.
The promotion of renewable energy also requires the cooperation of both central and
local governments. To effectively promote renewable energy, it is necessary to establish
inter-departmental coordination and cooperation inside government. Other auxiliary
support mechanisms, such as setting up a fund to promote renewable energy and
approving related renewable energy facilities are still in the planning stage.
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To conclude, the government of Taiwan is planning, executing and reviewing support
mechanisms presently in place and will hopefully assist in fostering a nurturing
environment to promote renewable energy, by developing the greatest energy benefits,
and establishing domestic renewable energy industries. Because the cost of renewable
energy is uncertain, renewable energy potential must be considered and a balance sought
between the domestic economy and the supply of electricity.
6. Conclusions
Taiwan is an island nation with very few indigenous conventional energy resources, and
energy imports are over 97%. To facilitate domestic energy diversity as well as improve
environmental quality, the promotion of renewable energy has become an important part
of the energy policy in Taiwan.
The National Energy Conference in May 1998 set a 3% goal for renewable energy
utilization by 2020 in Taiwan. In 2003, the renewable energy development target of Taiwan
was amended to enhance the determination toward the utilization of clean energy. The
target now is that the share of renewable energy in terms of installed power generation
capacity would be 12% of the total. Additionally, according to Nuclear-free Homeland
Action Plan, a budget of NT$3 billions (about US$90 millions) annually commencing from
2004 for promoting the development of clean energy and energy saving industries to
facilitate the achievement of the renewable energy development target.
Some measures to promote renewable energy have been implemented before. In addition
to financial assistance (such as system subsidies and purchased electricity subsidies), nonfinancial assistance (such as the removal of legal and institutional barriers) is also
required.In order to integrate and coordinate the challenge of promoting renewable
energy, the Renewable Energy Development Bill has been proposed to establish an
appropriate legal environment. Rapid passage of the Renewable Energy Development Bill
is a key factor in expanding the market for renewable energy in Taiwan. In future, related
policies, as well as legal and institutional support measures (related Architectural Laws,
Green Procurement Laws) must strive to facilitate the sustainable utilization of renewable
energy. The Revised Draft of Electricity Law must be amended and revised toward the
development of renewable energy.
The short, medium and long-term development progress and strategies of renewable
energy in Taiwan are seen to correspond to current international initiatives. In practice,
many issues of each phase (such as establishing domestic renewable energy technologies at
R&D phase or building inter-departmental coordination mechanisms at widespread
deployment phase) must be addressed, in order to actively promote the use of renewable
energy.
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