Executive Yuan passes draft amendments to the Electricity Act

  • Date: 2016-10-20
  • Source: Department of Information Services, Executive Yuan

To  develop  Taiwan’s  green  energy  capabilities  and  kick-start  transformation  of  the  domestic  energy  industry,  the  Executive  Yuan  Council  passed  draft  amendments  to  the  Electricity  Act  today  that  will  be  sent  to  the  Legislative  Yuan  for  review.

The  development  of  renewable  energy  and  the  green  energy  industries  are  important  elements  of  President  Tsai  Ing-wen’s  policy  agenda,  Premier  Lin  Chuan  said,  so  if  Taiwan  cannot  liberalize  its  power  industry,  the  country  won’t  be  able  to  promote  green  energy  industries,  impacting  a  whole  series  of  government  policies.  If  Taiwan  cannot  liberalize  the  supply  and  sale  of  all  green  energy,  and  our  country’s  sole  electricity  provider,  the  Taiwan  Power  Company  (Taipower),  continues  to  play  the  role  of  both  player  and  umpire  in  the  energy  industry,  there  will  be  no  way  to  develop  the  green  energy  sector  quickly.  This  is  why  it  was  imperative  for  the  government  to  amend  the  Electricity  Act.

The  government  needs  to  liberalize  the  green  energy  industry  during  the  current  legislative  session,  Premier  Lin  said.  He  added  that  the  Electricity  Act  will  be  amended  in  two  stages  to  make  regulatory  adjustments  that  simply  cannot  be  postponed  any  longer,  and  that  the  second-stage  amendments  will  also  aim  to  achieve  energy  industry  liberalization.  This  two-stage  approach  will  help  allay  the  public’s  concerns  about  consortiums  controlling  the  power  industry  and  high  rates  for  electric  power.

The  premier  explained  that  trying  to  push  through  all  of  the  amendments  at  one  time  would  have  caused  massive  disputes  and  drawn  out  power  industry  liberalization  measures  for  another  legislative  session  or  two.  That  was  too  high  a  price  to  pay,  so  he  has  asked  the  Executive  Yuan  and  relevant  Ministry  of  Economic  Affairs  (MOEA)  personnel  to  continue  communicating  with  all  sectors  of  society  so  that  the  public  will  understand  the  Executive  Yuan’s  approach.

According  to  the  MOEA,  the  government  is  going  all-out  to  develop  green  energy  and  transform  the  domestic  energy  industry,  hoping  to  achieve  the  goal  of  a  non-nuclear  homeland  by  2025.  

Taking  into  account  the  opinions  of  other  agencies,  Taipower,  the  Taipower  Labor  Union  and  environmentalist  groups,  as  well  as  the  relevant  rules  and  regulations  and  legislative  developments  in  various  countries,  the  MOEA  is  planning  to  allow  the  sale  of  renewable  energy  to  end  users  through  “wheeling”  (transmitting  electrical  power  from  one  service  area  to  another),  direct  sales  and  public  power  utilities.  Plans  also  include  having  state-owned  enterprises  handle  power  transmission  and  distribution  to  ensure  equal  access  to  power  grids;  ensuring  that  end  users  will  be  granted  the  right  to  select  their  power  providers;  having  the  competent  authorities  designate  an  agency  to  manage  and  supervise  the  power  market;  subjecting  electricity  rates  set  by  public  power  utilities  to  government  control;  and  the  establishment  of  an  electricity  price  stabilization  mechanism  to  prevent  price  volatility.

According  to  the  MOEA,  the  draft  amendments  to  the  Electricity  Act  also  call  for  Taipower  to  set  up  two  separate  subsidiaries,  one  to  handle  the  power  generation  function  and  another  to  handle  power  transmission  and  distribution,  which  will  allow  Taipower  to  become  the  parent  holding  company  of  both  entities.