Promotion of Renewable Energy in Taiwan

1. APEC EWG N&RE EXPERT GROUP 23rd MEETING Promotionof Renewable Energy in Taiwan Chen-Chung WU Bureau Of Energy Ministry Of Economic Affairs NOV. 10-12, 2004, NEW ZEALAND

2. Background  Renewable energies are clean and can be harvested domestically.  It is particularly important for Taiwan for the following reasons:  Taiwan is heavily depended on importation of energy supply.(97%)  Environmental concerns and global warming issues.  Aid in the establishment of domestic new industry.  Renewable energy can play a role to assist government in the achievement of policy goals for a secure,clean,and sustainable energy supply system.

3. Dependency of Importation： 87.3% 95.9% 97.7% GDP (NT$) ： 2,855 billion 6,348 billion 10,000 billion  Energy Supply Structure in Taiwan Annual increased by 6.3% during last two decades Limited indigenous supply, 97.7% importation  Fossil energy supply amounted to 91% 121.2 MKLOE 1.4% 8.0% 7.3% 50.8% 32.5% 68.4 MKLOE 2.5% 15.0% 5.5% 35.5 MKLOE 53.8% 23.2% 3.5% 4.1% 13.3% 61.6% 17.5%

4. Policy and Promotion Strategies  Major conclusions from a number of notable energy conferences since 1998 that advise the Government energy policies emphasized on the promotion of RE and regarded as Non-Regret policy :  National Energy Conference(May 1998)  National Economic Development Conference(January 2001)  Sixth National Science and Tchnology Conference(January 2001)  National Nuclear -free Homeland Conference (September 2003)  Promotion Strategies Highlights  Renewable Energy Promotion Program(since 2002)  Establishment of inter-agency coordinating mechanism  Providing Financial Incentive,subsidiary, and R&D program  Legislating “Renewable Energy Development Act”(Draft)(since 2002)  Electricity subsidiary,and ensuring reasonable profit. Tai-Power company’s Interim Power Purchase Measure  Nuclear-Free Homeland Action Plan(since 2003) Government spending NT$3 Billion annually for promoting the development of clean energy and energy Conservation industries.  Renewable energy application has been increased rapidly in recent years. RE increased 13.9% from 2,233MW up to 2,544MW (between 1999 and 2003).

5. Renewable Potentials & Opportunities Comprehensive evaluation on renewable energy in Taiwan. High isolation in most areas (Solar Collectors, Solar PV) Windy west coast areas (Wind Farm) Geothermal Energy Off shore islands (Distributed Electricity) Agricultural,Feedstock, Municipal &Industrial wastes (RDF) Small Hydro  Technical Feasible  Total Potential  Electric Power: 6,500 MW Thermal Application : 1.6 MKLO

6. 100000 92,900 89,100 89,000 90000 82,200 78,300 75,500 73,500 80000 76,600 72,800 69,500 70000 ) 62,800 58,200 2 60,300 57,600 56,500 60000 54,400 Installed Area (m 50000 36,800 40000 30000 18,100 20000 7,300 10000 5,000 5,300 1,910 2,900 1,090 1,000 800 0 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 Year  Solar Thermal System  Taiwan is located in the subtropics, the solar isolation exceeds 3,000 Kcal per m2.  Current status: 310 thousand Installed households (ratio of installed household up to 4%)  Potential:at least 1.5 million installed households(ratio of installed household increasing from 4% to 22%) Annual installation of solar water heaters in Taiwan Diwan Collegze (Tainan) solar thermal energy system for 450 person with 307.5m2

7.  Solar Photovoltaic System  Current status: 56 demon. systems with total capacity of 440 kW. Small scale application in remote area, educational or demonstration purposes.  Future plan (promoting PV by steps, based on the trend of PV’s cost ): 1. To promote innovative technology demon. system :  369 school demonstration systems( about 1,500 kW ).  Solar City Project, integration with buildings (BIPV application200~400kW). 2. To promote 10 thousand household application :  Providing subsidiary, promoting the installation of PV system up to 50 MW. 3. To promote 300 thousand household application : to reach 1,000MW. The Presidential Office (10.5 kW) YEAR 2001 Whether station at the top of Jade Mountain (10kW) Technical College in Southern Taiwan (10 kW)

8.  SolarCity In Taiwan (2004-2007) public space landmarks a. city entrance(edges) b. main path d.landmarks c. public space(nodes) path city entrance • To integrate photovoltaic solar system with architecture and weave the beautiful city with technology and architecture design • Solar technology will imbed with urban design and reveal local characteristics in city entrance, architecture, main path and public space to create an exquisite solar city. Base on Kaven Lynch’s concept about city Image. The 5 elements are: e. architecture(districts)

9. Wind Energy Annual Installation Projections 160 1500 140 1200 120 100 900 Additional capacity(MW) 80 Total installed（MW) 600 60 40 300 20 0 0 2001 2005 2010 2015 2020 additional total installed Total capacity of 1,500 MW by 20220 On land 1,000 MW Installed ：8.5 MW Pre installation : 590.5MW Offshore 500 MW Planning : 401.4MW 0.6% 39.3% 60.1% planning installed Pre installation  Wind Energy  Excellent wind power sites : most of the western coastlines and offshore islands ( more than 2,500 hrs of full - load operation)  Current status: 8.5 MW of installed capacity ,590MW of pre-installation and another 401MW under planning stage.  Potential: 1,000 MW of Land- based Wind Farm and 500 MW of Off-shore Wind Farm. 50m wind speed in Taiwan Potential

10.  Biomass Energy  Power generation from municipal waste incinerators has reached 432 MW. Utilization of biogas from landfill sites has been installed with a total capacity of 22 MW. There are other operations that convert waste to fuels, such as bagasse, rice husk, black liquor, scrap tires, paper rejects, etc.  RD&D projects  Refuse-derived fuels (RDFs)  Alternative transportation fuels a demonstration program of using bio-diesel on city garbage trucks  a demonstration plant converting recycled cooking oils into bio-diesel  Similar to OECD nations, it is estimated that biomass applications will continue to be as the major contributor of renewable energy utilization for Taiwan. Biomass Applications and Potential * Power generation from bagasse, rice husk, black liquor, scrap tires, paper rejects, etc.

11.  Hydro Power  Current status : 1,900 MW of hydropower developed.  Potential :The remaining sites are mostly located in the remote areas or in the nature conservation areas. They are with limited capacity and economic feasibility (small hydro with the potential of 300MW).

12.  Geothermal Energy  Taiwan lies on major geological fault-lines along the Pacific Rim, and has abundant geothermal resources. A comprehensive exploration estimates the total potential at up to 1,000MW. However, most of the resources located in remote areas and that makes them difficult to develop.  Economically and technically feasible potential will be about 150 MW.  Chin-Suei geothermal pilot plant had been promoted for years. The project aims at the integration of geothermal energy usage with a recreational facilities. Main geothermal sites in northern Taiwan Geothermal Power Plant Recreational facilities Chin-Suei multipurpose geothermal BOT Project

13. Key Tasks for Promoting Renewable Energy  Main Impediments: non-competitive cost and institutional barriers  Renewable energy is still more expensive energy supply option that requires government support.  Institutional barriers (e.g. land acquisition and permission procedures).  The key tasks undertaken by the government will be aimed at making renewable energy investment more favorable and removing of the institutional barriers. To implement “ Renewable Energy Promotion Program”  To seek rapid passage of the “Renewable Energy Development Act”  To implement Interim Power Purchase Measure To Implement the Nuclear-free Homeland Action Plans

14. Scale-UP and Technological advancement PV 15-24 External Costs External Costs NT$/kWh > 1.7 Renewables Averaged > 1.7 Renewables Averaged 1.27 Traditional Energies Renewables 1.27 Traditional Energies Renewables Long-term trend Long-term trend Traditional Energies Traditional Energies High cost or new technology  Strategies for Renewable Energy Investment more Favorable 2.0 1.5 1.0 0.5 0 Long-term trend of generation cost Near & Medium terms Government Actions:  Cost reduction through subsidy  Stipulated by the law Z 2.0 1.5 1.0 0.5 0 Z Demonstration Y Y Electricity subside NT$/kWh X Install subside X Renewables X Traditional Energies 1US$ 33NT$

15.  Renewable Energy Promotion Program  Providing economic and fiscal incentives through subsidies, grants or tax credit.  Conducting government-funded R&D on renewable energy technologies.  Establishment of inter-agency coordinating mechanism. Current Incentives for Renewable Energy Promotion

16.  Renewable Energy Development Act (Draft)  The most important action to be taken by the government.  A fixed reimbursement system for subsidies  aimed at making renewable energy investment more favorable Key Elements

17.  Tai-Power Co.’s Interim Power Purchase Program  An interim measure enforced in November 2003 to promote green energy before the Renewable Energy Development Act to be cleared by the Congress.  Tai-power is requested to purchase a quota of 600 MW RE.  Based on the competitive mechanism, all applications shall be evaluated by MOEA twice a year. For those applications approved, Tai-power Co. agrees to pay a fixed rate of NT$2/kWh for 15 years.  After the period mentioned above, the PPA can be renegotiated till as long as the lifetime of the renewable energy power generators.

18.  Action Plans for Nuclear - free Homeland  The conclusion of the “Nuclear-free Homeland Conference” held in June 2003.  The Cabinet’s Committee for the establishment of a Nuclear-free Homeland emphasizes on renewable energy to be as an important role in the creation of a nuclear - free nation.  Harmonization of various related policies of environment, construction, industry development , and energy .  Integration of resources between agencies.  Earmarking three billion NT dollars (about 90 million US$) budget every year commencing from 2004.  Promotion of industry development (opportunity & niche existing in Taiwan, e,g, PV). Promoting PV Industry Up stream Mid stream Down stream Industry Construction Industry Silicon & Materials Wafer Solar Cell PV Module PV System & Installation Comp. Sino-American Silicon Products Sinonar,Motech, Eton Photonic Energy Semiconductor Ever Bright Taiwan Sun Energy China Electric Sysgration, Phoenixtec,Fortune, BP, Motech, Sinonar, Uniergy Engineering, China Electric, Top Tower, Photonic Energy,,Semiconductor, Ever Bright, Chung-Hsin,Lighwave Solar Power,, Seki-Show, Solar-i

19. Future Prospect  National goal : Installation capacity of 6,500 MW.  High density of RE development, exceeding180 kW per kM2.  applying updated technologies to harness domestic renewable energy

20. ConcludingRemarks 1. A clear and definite target for RE development has been committed, with good progress to date. 2. To seek rapid passage of “Renewable Energy Development Act” is among the most important actions taken by the government. The promotion of renewable energy would require inter-agency coordination mechanism to overcome multiple non-economic barriers. 3. The promotion of renewable energy is regarded as a non-regret energy policy. Taiwan will increase the use of renewable energy in an attempt to achieve a wide range of policy goals of energy security, environmental protection, and industry development.