Taiwan’s Legislative Yuan passed amendments to the Renewable Energy Development Act on April 12 to revise renewable target to 27GW by 2025.
Increase renewable target
The amendments set a new goal of pushing the total renewable energy capacity for 2025 to 27GW.
The Ministry of Economic Affairs should establish a renewable energy fund
Transition from FIT mechanism to free market approved
Power generated from renewables shall be purchased by public power utilties, in addition to providing for direct transmission, transfer, self-consumption, and sales to renewable electricity transmission and distribution enterprise in compliance with the Electricity Act. The public rates set for renewable power generation facilities’ first-time power supply is applicable to the green electricity or excess green power that are sold under this Act.
Regulations governing electrical consumers with a large demand passed
Electrical consumers whose contract load exceeds a certain demand from the power grid shall participate in the construction of renewable energy and storage facilities jointly or purchase a renewable energy certificate with a certain electric consumption quota. Those who don’t comply will have to pay allowances, which will be used for renewable energy development.
The revision of the Renewable Energy Development Act shows that the Taiwanese government is turning its subsidy policy toward free trade for renewable energy and seek to stimulate local renewable developments through expanding the distribution channels.
As prescribed by the amended regulations, the public rates set for the first-time power transmission of renewable energy facilities is applicable for the electricity generated from renewables and excess green electricity. PV InfoLink projects that the public rates will be lower than the current FIT rates to achieve policy effectiveness.
Whereas the renewable energy certificate and free market for electricity are not common in Taiwan currently, it will take a while for the policies to be adapted and implemented in the market. In the short-term, the policies won’t have much impact on the PV demand as local enterprise is more likely to put FIT as priority. For the long-term, FIT rates will be lowered continuously to the level of grid system. By then, effects and benefits of electricity trading through free market will start revealing.
Moreover, the revision requires electrical consumers with a large demand to establish renewable energy facilities with certain capacity or purchase a renewable energy certificate with certain quota. Under this rule, the regions to be influenced the most are Hsinchu, Taoyuan, Taichung, Tainan, and Kaohsiung cities where industrial consumption is higher. These cities might also become the driving force behind Taiwan’s PV demand.
In general, the new policy direction brings good news to Taiwan’s PV sector. Related measures are expected to be released no later than October. Some of the new policies might be still applicable after 2020, however, as the presidential election will take place next year, policies might be affected due to administrative reasons.
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