Green energy innovations move into high gear

  • Date: 2017-05-19

I. Background

As an island nation that meets 98 percent of its energy needs via imports and relies on a wholly independent electricity grid, it is important that Taiwan become more energy self-reliant and diversify its energy sources. To do that, the Taiwan government has designated green energy as one of its “five plus two” innovative industries, embracing the ongoing transformation of the global energy industry and the emergence of clean energy as a key to future economic growth.

To pave the way for a green future, the Executive Yuan passed a green energy industry promotion plan on October 27, 2016 designed to meet Taiwan’s green energy needs, attract massive domestic and foreign investment, increase employment opportunities, and develop green energy technologies and businesses.

In addition to strategies to conserve, generate and store energy while implementing systems integration, the plan contains specific measures to promote green energy infrastructure, expand development of renewable resources, and cooperate with major international firms. These efforts, involving power suppliers, electricity users, systems, industry, and environmental goals, are expected to increase renewable energy sources to 20 percent of total supply by 2025, create 32,000 employment opportunities, and spur total investments of NT$1.8 trillion (US$59.8 billion) between 2016 and 2025.

II. Progress promoting green energy industry innovations

A. Shalun Green Energy Science City

1. Objectives: Establish an advanced facility for the nation’s green energy industry by building a scientific research cluster that combines the industrial, academic and research communities. Use smart ecological city designs to make the Shalun facility a world-class smart city. Bring in at least 2,200 people from research institutes, academic institutions and industry, and spur private investments of up to NT$4 billion (US$131.6 million) by 2021.

2. Progress: Since Shalun’s official opening on November 6, 2016, 11 domestic firms have moved in, and three others have obtained approval to move in. U.S.-based testing and certification firm UL is expected to set up a green energy research and development center in Taiwan, while global semiconductor industry association SEMI, the Okinawa Smart Island Project Office, and the Taiwan Battery Association have signed cooperative memorandums of understanding with the science city’s preparatory office.

B. Solar power industry

1. Objectives: Strengthen the local solar power industry to create a self-sufficient domestic supply chain. Raise the nation’s installed solar power capacity to 20 gigawatts (GW) by 2025, and drive total investments of NT$1.2 trillion (US$39.5 billion) between 2016 and 2025. Generate output value of NT$340 billion (US$11.2 billion) between 2016 and 2025.

2. Progress:

(1) An inventory was taken of available land, areas covered by water, rooftops and unused industrial areas, identifying 12,000 hectares of surface area that can be used for solar power installations.

(2) Businesses received guidance on developing high-efficiency products, which are expected to spur investment of up to NT$100 million (US$3.3 million). The Ministry of Economic Affairs and Ministry of Finance are in consultations to lower tariffs on materials for modular solar units, strengthening the modular production industry and driving estimated investment of NT$2 billion (US$65.8 million) in new solar module factories. 

C. Wind power generation

1. Objectives: Build a local supply chain for the offshore wind turbine industry. Raise the nation’s installed wind power capacity to 4.2 GW by 2025, and drive total investment of NT$613.5 billion (US$20.2 billion) in the period 2016-2025. Generate output value of NT$121.8 billion (US$4 billion) between 2016 and 2025.

2. Progress:

(1) The government has approved 22 potential sites for further evaluation. These sites are expected to have a combined capacity of approximately 10 GW, with about half the total number of sites to be developed by foreign firms.

(2) These projects have attracted 13 big names in wind power from Germany, Japan, the U.S., Denmark and Finland. Denmark’s DONG Energy company, for instance, has applied for potential offshore wind power development sites. Copenhagen Infrastructure Partners also announced on May 11, 2017 that they will invest NT$180 billion (US$5.9 billion) in three offshore wind farms in Changhua, and the company has signed a letter of intent with Taiwanese shipbuilder CSBC Corp. for underwater construction and submerged steel structures.

D. Smart energy conservation

1. Objectives: Promote advanced metering infrastructure (AMI) by installing smart electricity meters for 3 million customers. Generate output value of NT$41.3 billion (US$1.4 billion) between 2017 and 2024.

2. Progress:

(1) Smart meters for low-voltage users: The first batch 200,000 customers will have smart meters installed in 2017 and 2018. Taiwan Power Co. already announced the meter procurement on May 19.

(2) Communication modules: Size and interface design have been included in the procurement specifications.

(3) Pilot phase: A pilot run for the smart meters will be conducted with 1,000 customers in 2017.

(4) Communication technology: Procedures for selecting an AMI communication network have been announced. Procedures for evaluating and testing the communication network will be announced shortly.

III. Promote green financing, create green business opportunities

A. To steer large investments from the private sector into renewable energy, the government has set up an array of conventional financing channels—including traditional and special-case financing, leasing, fundraising mechanisms and venture capital funds—as well as new schemes including “green bonds” and investments from insurance funds. These green financing measures will encourage domestic financial institutions to participate in the growth of Taiwan’s renewable energy sector while creating lucrative business opportunities.

B. In addition to designing specific programs for green financing, the government has established an interministerial task force to promote financing for renewable energy businesses and coordinate related matters. Amendments to the Insurance Act promulgated in November 2016 now allow insurers to participate in the operation of green power facilities and other public infrastructure, and gain membership on boards of directors and supervisors. This measure is also expected to encourage life insurance companies to invest in green energy power facilities.

IV. Conclusion

Green energy, the wave of the future, offers immense potential for business growth. To speed up development of the green energy industry, the government has also designated green energy as a major component of its the Forward-looking Infrastructure Development Program. That plan is designed to build the type of green energy infrastructure Taiwan needs for the future, shore up technological certifications, leverage Taiwan’s strengths in green energy development, and create a domestic demand market for energy. These measures will spur growth and innovation in related sectors while boosting industrial competitiveness, which will enhance Taiwan’s energy security, create a green economy, and ensure environmental sustainability.