The Need of “Legal” Strategy to Realize Energy Technology and

Promote Energy Industry in Taiwan: Examples of Renewable Energy

Taiwan’s Recent Efforts to Promote Renewable Energy Development: Policy Measures, Legal Measures, Challenges, and Solutions in the

Post-Fukushima EraAnton Ming-Zhi Gao

Assistant Professor, Institute of Law for Science and Technology, National Tsing Hua University, Taiwan (antongao@mx.nthu.edu.tw)

Global challenges, Technology Solution, & Policy and Legal Response of Taiwan

Source: IEA, Energy Technology Perspectives 2010, Executive Summary, at page 3, www.iea.org/techno/etp/etp10/English.pdf

(visited on 27 July 2011).

Policy Response of Taiwan• Energy White Paper of 1998, • 2005 Energy Policy White Paper• Sustainable Energy Policy Framework

of 2008, • 2010 Master Plan on Energy

Conservation and Emission Reduction• 2011 Energy Development Framework

(draft)

Legal Response :• Renewable Energy Act(RE

Act) of 2009

Various Disputes in 2010 after the 2009 RE Act!!

Ministry of Environment argued that

green energy policy is

playing fake.

The MP argued that wind power

plants were disfavored under the new regime.

A wind farm developer

threatened to withdraw its

investment due to the

governmental unwillingness to promote wind

power.

The PV industrial association accused the

government of taking PV

industries' breath away in October

2010.

Insufficient feed in tariff was provided

to other renewable

energy areas (such as marine

and biomass energy).

Ambitious Goals for Developing Renewable Energy in a Post-Fukushima Era

Before Fukushima(Sustainable Energy Policy Framework of 2008)

Renewable energy in the electricity mix: 8% in 2025

Post Fukushima (New Energy Policy of November 2011)

8% to 16.1% in Electricity Generation Capacity in 2030.

2030: 12500MW total RE electricity capacity

2030: PV capacity 4200MW ; Wind power capacity: 3100MW

Yet how to achieve them???

“Maximization” of

the potential of

Renewable

Energy 2025

500M

W 2030

12,502MW(

16-20 ％

of Electri

city Mix)

Million

Solar

Roof Program 2030 3100M

W

Thousand onshore and

offshore

wind farm Progr

am 2030 4,200MW

Yet How to Achieve this ambitious target ????

6

Renewable Energy

Electricity Heating Transportation fuel

Three Main types of RE

Renewable Electricity

Year/type2009

Aggregate

Hydro power 1938.7 MW

Wind powerOnshore 436MW

Offshore -

PV 11MW

biomassWaste 790MW

biogas 24.MW5

Marine energy -Geothermal -

Fuel cell -

Total 3,200

Current TOP 3: Hydro Electricity, Biomass (& waste incinerator), wind power

Source: http://homepage.ntu.edu.tw/~ntuperc/pdf_meet/0506_1.pdf

Support Scheme under the 2009 RE Act

Main mechanisms

Renewable Energy Development Fund for R&D, investment

subsidy, demonstration subsidy, and feed-in tariff

Feed-in tariffInvestment subsidy for installations and demonstration installations , such as: BIPV, Marine energy, fuel cell

Interconnection (grid connection) obligation for utilities

Others Renewable electricity target

Tax incentives for import of renewable installations

Green procurement

Feed-in Tariff for all RE Electricity in 2010 and 2011

Type of renewable electricity 2010 2011

Run of River hydropower 2.0615 2.1821

Wind power

1kw~ 10kW< 7.2714 7.3562

≧10Kw 2.3834 2.6138

Offshore 4.1982 5.5626

Geothermal electricity 5.1838 4.8039

PV

rooftop

1kW-10kW< 11.1883 10.3185

10kW-100kW<12.9722

9.1799

100kW-500kW< 8.8241

≧500kW11.1190

7.9701

Ground-type 7.3297

Biomass electricity

Biogas 2.0615 2.1821

Waste (RDF) 2.0879 2.6875

Other (Marine energy, Fuel cell, etc) 2.0615 2.1821

Unit: new taiwan dollars/ per kWh

Lack of Stable Funding• State-owned electricity company cannot pass the cost to final

customers, which may lead to the bankruptcy of Tai-Power.

The lack of a liberalized Electricity MarketEx. Grid access and connection rules are less transparent.

The lack of RE electricity low-interest loan and guarantee program • ←→ Ex. Kfw of Germany ex. Low-interest loan program

in US.

Overall Challenges

RE Act only subsidizes

“dike-type” run of the river small hydro power, but

exclude other types (such as: river-type ones)

Small is

beautiful! All

types of

small hydr

o.

Barriers: Small Hydro Power Taiwan

Remain

very Focus

on “wast

e incinerator”

and “coal-fired CHP”

More focus

on bio degrad

able biomass or

biogasEncour

age biomass CHP

Barriers: Biomass Electricity

Taiwan

Taiwan• Focus on pure

electricity generation biomass

Europe and US• Focus on biomass

CHP

Barriers: Biomass Electricity

Taiwan

Biomass generators are forced to build within Industrial Zone under RE Act of 2009.

Barriers: biomass electricity

• Q:Unit? – Small-kW type

or Large-MW type?

Barriers for :1,000 Onshore and Offshore Wind Farm Program by 2030

VS

• Prosperity in Taiwan• Taiwan-based technology lead to

favorable FIT for small wind power.

Fewer barrier for Small-kW Type

Feed in Tariff(NTD/kW hour)

Wind Onshore

1kW and <10kW 7.3562

≧10kW 2.6138

Offshore 無區分 5.5626

• Too rush? Jump from “middle and high” megawatt hours onshore plants directly to offshore wind？

• The need to raise the FIT for “low megawatt wind hours” onshore wind plants

Barrier for Onshore Wind PowerThe flawed strategy?

Onshore Middle and high wind power plants

(Europe and US: low-hour wind power plants )

Offshore wind power plants

Barrier for Offshore Wind PowerLaw in place but Insufficient Legal “Framework”!!

http://www.bsh.de/en/Marine_uses/Spatial_Planning_in_the_German_EEZ/index.jsp

Barriers for Million PV Roof Program by 2030”

-more ambitious than 100 000 ROOFS SOLAR POWER PROGRAMME of Germany -the new meaning of roof in Taiwan? 3kW * million = 2030 target

From PV boom in 2010 to slow-down in 2011

23

PV Boom in 2010

•High PV FIT!!•Several hundred MWSlow-Down

Measure in 2011

Barriers for Million PV Roof

The introduction of PV “tendering” system to control the development pace of PV as in France

The lack of renewable low-interest and loan guarantee for small household

PV on the Existing Illegal House

Shall FIT be given to PV on the illegal house?• Answer: X

New illegal house in the name of “PV”• The License Exemption under

building code only provided for those PV roof 2 meters to avoid ≦the new illegal house!

Illegal House and PVa very Unique Problem for Taiwan

Ground-type PV:Should the ground-type PV consider as “ROOF”under the Million PV Roof Program?

NO (government)

Ground-type PV is not welcome due to its effect on agricultural land use and food security

No house, no roof.

Common Barriers for Offshore ind, Marine Energy, and Biomass

Unbearable High connection cost

The need for a super shallow connection regime under the RE Act of 2009

Renewable Heat

A Successful Story

•Investment Subsidy (capital grant) since 1986 •Ex. Solar heat collector: NTD 4275 Per piece in 2009

Scheme:

•Up to May 2009, 440 thousand households had already installed solar heaters, making Taiwan No. 3 in the world for installations.

Achievement

29

Europe and USHigh latitude lead to high heating needs of air conditions for RE

Taiwan1. Tropical and subtropical zone2. Heat mainly used for “bath-, shower water”, rather than air condition3.Heat is usually treated as “waste” air and emit out.

Climate Factor behind the Application of RE Heat in Taiwan

Only “solar heating” is subsidized under the Ordinance of Investment Subsidy for Renewable Heating( 再生能源熱利用獎勵補助辦法 )The need to include other RE heating, such as : biomass and geothermal

etc.

Biomass Heat: Only focus on biomass electricity generation

Ignore biomass heating under the current support scheme.

Geothermal heat: Why not provide “geothermal investment ”subsidy to housing complex in less sunshine zone to replace the use of LPG water heater or electricity

water heater

Still Room to improve and Develop !

Renewable Transportation Fuel

• Voluntary 3% mixture scheme The Subsidy Ordinance for Ethanol in Taipei and Kaushiun City was promulgated on July 2, 2009. The subsidy covers the extra cost incurred in the sales of E3 ethanol, including the purchase of ethanol and the mixture, storage, and transportation facilities. Of course, this scheme is not mandatory. Several Demonstration Gas Stations are subsidized under this scheme. In this regard, not all E3 petroleum is available in all gas stations in these two cities.

• Mandatory Using E3 Obligation: government vehicles in Taipei have been mandated to use E3 (3% bioethanol blended with gasoline), available at eight gas stations in Taipei since September 2007 under the Government Vehicles Demo Program

• Mandatory mixture Obligation under the Petroleum Management Act of 2008

• B1(1%) since 2008

• B2(2%) since 2010

Main Measures: Unbalanced Mandatory duty for bio-ethanol and Biodiesel in Taiwan

Not very gifted

• Lack of biomass resources • Too high population intensity• Lack of large-scale farmland to plant energy crops• Government worries about the food security issue.• Far away from other countries makes it less environment to buy biomass

from other countries.

Lack of acquired environment

• Citizens and political parties are very sensitive on “raising oil price”

• Insufficient incentives for farmland to plant energy crops• Limited mandatory mixture duty for bioechanol• Relatively low mandatory mixture duty for biodiesel

Main Barriers: Lack of gifted and acquired environment

Conclusion:Three Main GAPs

RE Vision of 2030

Governmental Wiliness & Policy

Policy and Law

Law and its Implementation