A domestic clean energy transition is underway in Taiwan, and the outlook for the future is overwhelmingly positive.
If humans could wholly exploit the energy absorbed by the earth from the sun’s rays, we would be able to generate the equivalent to an entire year’s worth of energy consumption with just one hour of sunlight. But at present, the creation of a great solar-paneled shield wrapped around the world, its launch into the sky and the transmission of the energy it would generate back down to earth is more idyllic fairytale than a practical substitute for traditional energy sources, and was certainly not included in the recent IPCC Special Report.
Yet there has been significant progress in the way humanity harnesses the earth’s resources, and this has important consequences for the global energy supply mix. The cost of generating and distributing electricity from renewable sources is the lowest it has ever been and is only decreasing. Generation from wind and solar power will be cheaper than coal-fired generation before 2023, excluding any beneficial effects of fossil fuel subsidies. And by 2040 almost 35 percent of the total energy we generate will come from wind turbines and solar panels, up from 5 percent today. The figure, if not an electrifying prospect already, represents extraordinary capital spending equivalent to US$7.4 trillion over this 20-year period. Revolution in the methods we employ to generate energy is especially important as traditional resources are increasingly unable to meet global demand. Any basket of finite resources will eventually be unable to maintain an equilibrium alongside a geometrically rising, wealthier global population.
Taiwan, a small, densely populated tropical oasis of 23 million people 180 kilometers off the coast of China, is an increasingly enthusiastic participant in the international clean energy revolution.
But this has not always been the case. For years, much like other recently developed parts of the world, Taiwan prioritized economic growth over environmental concerns. For most of the 21st century, fossil fuels accounted for 90 percent of the nation’s energy generation; consumption of this type of energy has grown almost 4 percent each year since 1991, and during the same period annual carbon dioxide emissions have risen 5 percent. Waste production from dirty industry on the “Made in Taiwan” west coast damaged topsoil, the water table and the flora and fauna. Urbanization reduced natural forest cover as mountain regions were penetrated by road and railway projects. Environmental degradation was accepted as simply an inevitable consequence of the development process.
Eyes have slowly opened to the true hidden costs of reliance on fossil fuel. Ninety-eight percent of Taiwan’s energy is imported, costing 12.5 percent of GDP even before significant annual fossil fuel subsidies are accounted for. Not only is this a hefty piece of the economic pie to spend on electricity, but the figure pales in comparison to the underlying medical costs caused by greenhouse gas emissions. Importing energy to this extent, primarily from geopolitically turbulent parts of the world, is also worrying for energy security. The nation’s electricity grid is isolated from all others, and any future obstacles to trade would create an immediate shortage of power for as long as fossil fuels remain central to the energy supply mix.
Several key players have been crucial in raising public awareness. The Environmental Protection Agency (EPA) was established in 1980 to investigate the potentially harmful effects of massive industrialization and the true externalities of unrestricted pollution. Civic organizations, including the Taiwan Rural Front, have sought to educate the public on environmental issues and force transparency and action from government. Environmentalists and social movements have often found common ground in their desire for the nation’s democratic principles to be upheld from the top down. The union of democratic ideals and environmental concerns was a fruitful one, and can explain the success of the Democratic Progressive Party (DPP) in the 2016 elections. President Tsai-Ing wen’s victory was the manifestation of a growing consensus among Taiwanese to become more self-sufficient. Her ambition for a secure, reliable and clean domestic power grid is an appropriate metaphor to symbolize this liberal mindset.
A new energy supply mix
A comprehensive assessment of the nation’s energy supply mix has been an important first step to facilitate change in energy policy. Recognition of the economic and environmental legacy of fossil fuel-driven industrialization was followed first by the 2009 Renewable Energy Development Act. This watershed legislation reoriented domestic industry towards more sustainable practices and created targets for an independent energy supply, greater energy security, environmental protection and international competitiveness. Goals for renewable energy installation were set, and have since been updated to reflect the new president’s ambitions. The Tsai administration is looking to increase renewable energy generation from 6 to 20 percent by 2025, and reduce carbon dioxide emissions by 20 percent relative to 2005 levels over the same period.
Alongside these efforts to adapt to the threats of climate change, the DPP has also begun to phase out the nation’s nuclear power plants, in response to public concerns that the disaster at Fukushima, Japan, in 2011 could happen in Taiwan, where natural disasters are equally as common.
The attempt to overhaul the energy supply mix to such an extent over such a short timescale is unique. The domestic grid is already operating at near capacity and an increasing, and a wealthier population is forecast to increase its demand for electricity in the coming years. Nuclear power provides 15 percent of Taiwan’s energy needs. To replace this piece of the electric pie with renewable energy is a risk. Nuclear power plants can operate around the clock, but wind and solar power have a far lower capacity factor, at the mercy to the whims of nature. The transformation is made riskier still when considering that almost all fossil fuels burned in Taiwan, almost all of which are imported, are furthermore imported from geopolitically unstable regions.
The process of transforming the traditional power grid, which has remained largely unchanged for a century, is a slow one. But the building blocks for progress are slowly falling into place in Taiwan and a domestic clean energy transition is underway.
Alarm bells ring at every junction, but the president has consistently reiterated her optimism that ambitious targets can be met without disruption to the supply of energy or a significant increase in the cost of electricity.
So far, concrete steps have been taken to ensure the stability of the grid and that goals can be met. Novel public policy has attempted to shift private investment towards renewable energy installation. Amendments to the Electricity Law have created a roadmap for independent power providers to sell directly to the national grid. Introducing a Feed-in-Tariff system has subsidized the cost of doing so. The long-overdue disassembly of the Taipower monopoly will foster healthy competition in the electricity market, to the benefit of local firms and foreign direct investors. The process of transforming the traditional power grid, which has remained largely unchanged for a century, is a slow one. But the building blocks for progress are slowly falling into place in Taiwan and a domestic clean energy transition is underway.
Foreign investors have embraced the positive rhetoric and complementary legislation. It is helpful that Taiwan can boast a variety of comparative advantages when it comes to renewable energy. The nation receives plenty of sunshine year-round and the Taiwan Strait alone represents a treasure trove of consistent strong winds, estimated to be equivalent to 5Gw of installed capacity. The country is home to world-class engineering and production capabilities, especially in important, relevant technologies like inverters and silicone.
Several projects, products of the “Million Solar Rooftops” initiative, have already been completed. The Taiwanese National Stadium (pictured below) generates all its power from 8,800 solar panels, and when not in use this energy is diverted to the local electricity grid, meeting 80 percent of the communities’ needs. A similar scheme is in operation at Pingtung Jail.
Progress is particularly tangible in the market for offshore wind power, where joint ventures between local firms and foreign players are announced almost every week. To achieve the administrations’ target of 5.5Gw of offshore wind capacity by 2025, Taiwan has partnered with nine foreign companies to develop 14 offshore wind farms. Industry leaders from Spain, Denmark, Germany and Japan have all applied for contracts, and construction is already underway.
It is easy to be swept away by the relentless positivity surrounding the market for renewables in Taiwan. Despite impressive progress to date, several important obstacles remain. There is frequent miscommunication at every level of government, slowing the adoption of new regulations. Often there is a divergence of interests between local stakeholders and government agencies, further hindering the process.
Foreign companies have complained about the cumbersome nature of Environmental Assessment Reports. EOLFI, a French firm specializing in floating wind turbine technology, was denied clearance to begin development of its W1N project 15 kilometers off the coast of Taoyuan on navigation concerns.
There are also well-documented drawbacks of relying too heavily on alternative energy sources. Solar and wind power operate at roughly 15 and 30 percent capacity respectively, meaning that to provide X amount of electricity, these sources require significantly more installed capacity than nuclear or coal, which operate at almost full capacity. To achieve government targets for renewable energy generation, 60Gw of renewable capacity will be needed, at a cost of NT$1.3 trillion (US$42.3 billion).
Then there is the problem of storage, without which renewable sources cannot be considered baseload or be added to reserve margins. On windy days in Germany, excess power generated can simply be zapped to other parts of Europe via the continent-wide electricity grid. Taiwan, an island, does not have this luxury, and so must rely on other methods to compensate for when there is either too much or too little wind and sunlight. The nature of nature creates other causes for concern. Taiwan suffers from frequent typhoons, is prone to earthquakes, and is surrounded by rough seas in the wintertime. This combination of problems is one that engineers have yet to face anywhere else in the world.
A positive outlook for the future
The wonderful thing about problems is that they inspire solutions. Storage issues can be solved by batteries, which are increasing in efficiency and decreasing in cost and size every year. Demand-response networks also help. End-users can be provided with incentives to reduce energy consumption at times of excess demand or reduced supply. Advanced weather forecasting technology will be able to better predict when these times of need will be.
Given its expertise in most things mechanical, Taiwan is an excellent testing ground for smart energy technology and other new ideas, for example micro grids, which generate and distribute power independently of the national grid. “Micro grids combine local energy storage with community-scale projects and so provide relief from peak load pressures,” argues Frank Ling, an energy and climate policy analyst at Cypress River Advisors. Another benefit of the micro grid is that it provides diversification, and so mitigates the potential impact of island-wide risks, such as natural disasters.
Taiwan has done a lot right. Steps toward a cleaner, more sustainable and decentralized electricity grid have been taken in recent years. The deregulation of the energy market and subsidization of new technologies has encouraged flows of capital from abroad.
Innovation in the market for renewables has created opportunities in other areas. Enthusiastic government, a highly skilled workforce and transparent, fair legal framework have led Google and Microsoft, among others, to cite Taiwan as a key hub for research and development. Investment in one industry has created a multiplier effect, and it is hoped that further foreign direct investment will stem a brain drain of young engineering talent from the island.
Taiwan has done a lot right. Steps toward a cleaner, more sustainable and decentralized electricity grid have been taken in recent years. The deregulation of the energy market and subsidization of new technologies has encouraged flows of capital from abroad. A shift away from fossil fuels is the right choice economically, will improve energy security, and represents a small victory in the global war on climate change. Residents of larger cities on the north and west coast will be grateful for the improvement in air quality that will likely accompany the transition towards cleaner energy generation. Obstacles to progress remain, but by most accounts, a domestic, “Made in Taiwan” green energy revolution is well underway.
You might also like
More from Society & Culture
Despite the adoption of a new law on May 17, campaigns will continue to legitimize the kind of homophobic discourse …