Is Renewable Energy the Way Forward for Taiwan?

The goal has wide political support, but the challenges are immense, especially when abandoning nuclear energy is coupled with stringent targets for reduced greenhouse-gas emissions.

With the two major political parties seemingly in agreement to allow nuclear energy facilities to wind down and be replaced with renewable energy, the near term is likely see a big uptick in investment in alternative power sources regardless of the outcome of next January’s presidential election.

President Ma and Economic Affairs Minister John Deng visit AU Optronics' solar installation atop its Taichung display-panel fab.
President Ma and Economic Affairs Minister John Deng visit AU Optronics’ solar installation atop its Taichung display-panel fab.

The Ma Ying-jeou government has co-opted the “Nuclear Free Homeland” policy of the opposition Democratic Progressive Party (DPP) by suspending construction of the Longmen Nuclear Power Plant (NPP4) and declaring its intention not to seek extension of the lifecycle of the three operating NPPs. Meanwhile, the normally starkly divided Legislative Yuan has come together in passing the Greenhouse Gas Reduction and Management Act to provide the framework for a marked reduction in the emission of carbon dioxide (CO2) and other greenhouse gases.

The government plan calls for generating some 15% of domestic power from renewable sources by 2030. The target is to have in place 5,200 megawatts (MW) of installed wind power and 8,700 MW of installed solar photovoltaic (PV), as well as biomass-fueled power plants and even geothermal, for a total of 17.25 gigawatts (GW) of renewable energy installed capacity. For its part, the DPP’s 2025 Nuclear Free Homeland Initiative, the blueprint for the party’s energy policy, calls for generating 20% of Taiwan’s total power from renewable energies by a decade from now.

But can renewable technologies such as wind power and solar PV provide enough electricity to offset the loss of nuclear power, while also allowing Taiwan to meet its emissions reductions commitments? Nuclear plants currently generate more than 38,000 GWh of electricity annually, making up 18% of Taiwan’s total power supply.

The scale of the challenge is enormous. Researchers at the Industrial Economics and Knowledge Center (IEK) under the Industrial Technology Research Institute (ITRI) estimate that to generate enough power to replace nuclear energy, Taiwan would need to install 55 GW of solar PV, requiring some 700 square kilometers of land.

ITRI estimates that to generate enough power to replace nuclear energy, Taiwan would need to install 55 GW of solar PV, requiring some 700 square kilometers of land.

“It’s quite difficult to replace nuclear power in the really short run, because we aren’t ready in terms of the whole infrastructure, and also the capacity of renewable energy is quite low right now,” says Wen Lih-chyi, director and research fellow at the Center for Green Economy at the Chung-Hua Institution for Economic Research. She adds that new energy technologies such as hydrogen fuel cells are “not really commercialized yet.”

DPP presidential candidate Tsai Ing-wen at the DPP's New Energy Workshop, held at National Cheng Kung University in Tainan April 18
DPP presidential candidate Tsai Ing-wen at the DPP’s New Energy Workshop, held at National Cheng Kung University in Tainan April 18

DPP Secretary General Joseph Wu, in a letter to The Wall Street Journal responding to an editorial criticizing the DPP’s plans to let nuclear power die on the island, said it is “disingenuous” to suggest that the DPP is seeking the one-to-one replacement of nuclear power with renewable energy. According to Wu’s letter, Taiwan could reduce power demand levels by 10% from their current levels by 2025 using existing conservation means, and that technologies such as smart grids and smart meters could add to these power conservation methods. The DPP’s 2025 Nuclear Free Homeland Initiative also calls for industrial transformation away from energy-intensive heavy industries.

Whether or not such major reductions in Taiwan’s total energy demand can actually be achieved, Taiwan will still need to find a way to make up for the loss of nuclear power. And if it wants to cut emissions at the same time, the answer will necessarily be renewable energy.

“Every developed nation needs to go for renewable energy because of the environmental concerns, but also because of the continuous improvement in renewable energy that has lowered the costs,” says IEK Deputy General Director Jack C.C. Chang. “But the question is, how much? What percentage? There are energy security and energy stability issues. And cost. You need to balance all these issues, and in different countries you may have different weightings, different pressing factors.”

Taiwan’s renewable energy sector has grown in value by 195% between 2008 and 2014, increasing to NT$488.4 billion (over US$15 billion) in annual revenue and creating nearly 70,000 job opportunities.

The Ma administration has encouraged renewable energy research and development with the aim of enabling renewables to fill a larger portion of Taiwan’s energy needs in the future. Passage in 2009 of the Renewable Energy Development Act, for example, funneled research funding into developing renewable energies. Other initiatives include the Million Rooftop PVs and Thousand Wind Turbines programs initiated in 2012, and the Rising Green Energy Industry Program of 2014. The result has been a boost to the development of Taiwan’s renewable energy industries, primarily solar and wind.

According to data from the Bureau of Energy (BOE) under the Ministry of Economic Affairs, Taiwan’s renewable energy sector has grown in value by 195% between 2008 and 2014, increasing to NT$488.4 billion (over US$15 billion) in annual revenue and creating nearly 70,000 job opportunities. The BOE forecasts strong continued growth for these industries, reaching NT$1 trillion by 2020.

Worldwide, Taiwan solar-cell manufacturing industry is second only to China’s, with 2014 revenue of NT$184 billion, and the nation holds a substantial share of the solar wafer and module manufacturing industries as well. Taiwan is also a leader in LED lighting, also considered “green tech” due to its low energy consumption. The BOE reports that the production value of LED manufacturing reached NT$237.9 billion in 2014.

Scant domestic adoption

These industries are primarily export-oriented, however. Green-energy advocates for years have noted the glaring disparity between the amount of production of renewable energy and green technology products and the paltry renewable energy installations on the island. Currently, 323 onshore wind turbines are operating in Taiwan, the equivalent of 644.4 MW of installed capacity, according to the BOE, while IEK says that accumulated solar PV installations total around 430 MW. Conventional hydroelectric accounts for another 1,800 MW in installed capacity. Collectively, these renewable energy sources generated 3.4% of Taiwan’s total power generation of 213,429 GWh in 2013.

In its 2015 Position Paper on Energy and Environment, the European Chamber of Commerce Taiwan (ECCT) says that despite declining costs for renewable energy and a general uptick in installations around the world, “there has been little action so far to further develop renewable energy” in Taiwan.

Critics contend that despite lip service paid to the idea of renewable energy, Taipower has intentionally or unintentionally erected obstacles that slow down the process and reduce the amount of amount of green energy available. Bart Linssen, service manager for SolVent, a Taiwanese wind power firm invested by Enercon, a German wind-turbine manufacturer, says: “On paper, everything works. But grid connection at this point is very complicated and time-consuming.” He also cites difficulties obtaining the necessary permits and approvals in timely fashion.

For example, he notes that in Taiwan every windmill needs its own separate Environmental Impact Assessment (EIA), whereas in Europe large-scale EIAs are conducted for land areas earmarked for wind-power development.

ECCT also calls attention to the failure to provide a stable financial environment for investment. “The Renewable Energy Act, with its ever changing feed-in tariff, isn’t providing the necessary confidence to attract significant investment,” the chamber notes in its position paper.

LNG has become the fuel source for over 30% of Taipower’s total generation, even though at NT$3.91 per kWh, the cost of power generation at LNG-fired plants is more than the utility can charge its customers.

The issue of foot dragging and unstable feed-in tariffs (FiT) may be related to the sorry state of Taipower’s finances. As a state-owned enterprise, the company has to follow the government’s directives, leaving it with little control over its price structure or the policies governing how it generates power. The Ma administration’s emissions-reduction policies have led to liquefied natural gas (LNG) becoming the fuel source for over 30% of Taipower’s total generation, even though at NT$3.91 per kWh, the cost of power generation at LNG-fired plants is more than the utility can charge its customers.

After price hikes in 2012, the average price of electricity is allowed to range somewhat according to fuel costs and currently stands at NT$3.07 per kilowatt hour, according to Taipower. Such policies have put Taipower’s operations in the red for years. In its 2014 Sustainability Report, the company notes proudly that it lost only NT$17.5 billion in 2013, down from NT$61.6 billion in losses in 2012.

Nuclear power costs Taipower only about NT$1.9 per kWh, while solar power is far more expensive. The utility pays FiTs of NT$8.18 per kWh for small rooftop installations and NT$5.62 per kWh for ground-based systems. As Taipower focuses on regaining financial health, it is not surprising that it has been reluctant to accept major quantities of costly solar power.

Wind power is far cheaper, with an onshore FiT of NT$2.62 per kWh. But wind power suffers from a poor public image. It was the target of fierce protests in Miaoli County’s Yuanli Township in 2013 that pitted local residents against Infravest, a German wind-power firm that has built 170 of Taiwan’s windmills. The protestors claimed that the turbines were built too close to area homes, presenting not merely a noise disturbance but also a threat to their life and property if they were to collapse during a typhoon. In fact, this summer six of Taipower’s own windmills were destroyed by powerful Typhoon Soudelor.

ECCT and other renewable-energy advocates urge Taiwan to adopt “community-invested energy generation as a viable option.” In such projects, local communities invest in the project in return for a portion of the proceeds. As these generators usually operate under 20-year Purchasing Power Agreements (PPAs), the returns can bring in steady income – usually around 8% annually – for years. In Germany, up to 50% of wind-power installations are community-invested, and giving the local residents a financial stake in the installations tends to “turn complainers into supporters,” observes Peko Ku, a representative for wind-energy consultancies Wind Minds and Forte.

The use of community-invested projects could potentially foster more involvement by Taipower in renewable energy installations. This option is no panacea, though. A substantial number of publicly invested windfarms in Germany failed to generate either the kWh or the earnings that had been predicted, according to German newsmagazine Der Spiegel.

Renewable-energy systems suffer from other shortcomings as well – some more difficult to overcome. The first is the often-cited “intermittency” issue with wind and solar power, since those sources cannot generate power 24 hours a day under all weather conditions. That conflicts with society’s need for baseload power – the always-on, minimum power requirement needed for a grid to operate properly. Baseload power is generally provided by relatively inexpensive and efficient fuels such as nuclear or coal. Most renewable energy, however, is subject to the vagaries of nature and cannot be relied upon to provide baseload in the absence of large-scale, cost-effective means of energy storage.

Many private residences in Western Europe, such as this home in Belgium, install rooftop solar panels to generate power for their own consumption and to sell to the local utility.
Many private residences in Western Europe, such as this home in Belgium, install rooftop solar panels to generate power for their own consumption and to sell to the local utility.

The Nordic experience

Renewable energy advocates dispute the idea that renewable energy cannot serve as baseload. A number of studies, as well as real-world experience in the Nordic countries, show that renewable energies – if strategically placed for maximum output during different times and seasons – can go a long way towards enabling wind and solar to provide baseload requirements. The addition of natural gas “peaking plants” would make it possible to meet a country’s power needs. Denmark, for example, generates 39% of its total electricity needs from wind power alone, and much of the remainder from hydropower.

Denmark relies on a Nordic-wide grid that allows it to sell electricity to Sweden and Norway when it has a surplus of wind power, while purchasing power generated from those countries’ ample hydropower resources when it has a shortfall.

Hydroelectric, which generates power from a steady and reliable source of water stored in a reservoir, is often used as baseload. Most nations with a high proportion of renewable-energy power generation, including Portugal, New Zealand, and the Nordic countries, generally obtain this energy primarily from hydropower. Offshore wind resources in the Baltic region are also fairly strong and reliable, but not constantly available. Denmark relies on a Nordic-wide grid that allows it to sell electricity to Sweden and Norway when it has a surplus of wind power, while purchasing power generated from those countries’ ample hydropower resources when it has a shortfall.

Taipower has already maxed out its hydroelectric resources, and with the reservoirs constantly filling with silt and given the specter of frequent periods of drought, conditions are not promising for any increased reliance on hydropower. As an island, Taiwan is also unconnected to a regional grid, eliminating the possibility of power sharing that makes use of renewables more feasible.

Another factor that could severely constrain Taiwan’s ability to transition to heavy dependence on renewables is the low “power density” of wind and power energy sources. Power density – measured in watts per square meter – is derived by calculating the land area a given energy source requires and then dividing that number by the total power-generation output. It factors in the entire footprint of an energy source, including not just the power-generating facility itself but also the coal mines, natural gas and oil wells, and pipelines, as well as environmental mitigation requirements.

According to energy experts, the power density of coal can range from 100 to 1,000 watts per square meter depending on such variables as whether the coal is anthracite or the lower-quality bituminous, how it was mined, and what environmental mitigation requirements are in effect. More-efficient natural gas ranges from 200 to 2,000 watts per square meter, but renewable energies rate far more poorly. Solar PV was rated at only 9 watts per square meter in a 2010 study. Although technological advances likely have improved the efficiency somewhat since then, the power density would still be extremely far below that of fossil fuels.

Wind power generates fairly large amounts of power per turbine, but the space needed between turbines – not to mention between turbines and residences and other protected environments – is so large that its density comes to only 0.5-1.5 watts per square meter. Biomass also scores poorly, as photosynthesis converts only 1% of sunlight into energy, requiring vast amounts of space to grow plants for energy production.

Wind power generates fairly large amounts of power per turbine, but the space needed between turbines – not to mention between turbines and residences and other protected environments – is so large that its density comes to only 0.5-1.5 watts per square meter.

With Taiwan’s extremely limited landmass, the power densities of various renewable energies ultimately are likely to pose a severe limitation on how much they can actually be utilized for power generation.

Do these circumstances mean that Taiwan’s goal of moving to high rates of renewable energy usage is likely to fail? Germany offers both an inspirational and a cautionary example.

Germany began its transition towards green renewable energies in the 1990s, but adding to the challenge is that it also resolved to do away with carbon-free nuclear energy in 2011 after the Fukushima disaster. The stress of trying to meet the twin goals of reducing both carbon emissions and dependence on nuclear energy has spurred Germany to spend billions of euros on renewable energy installations – but also simultaneously increasing its dependence on coal, particularly low-quality, highly polluting lignite.

Since 2010, Germany’s installed capacity of renewable energies, including wind, solar PV, biomass and hydroelectric, has expanded to over 87 GW, almost half of Germany’s entire power capacity, while the installed capacity of power plants burning either hard or soft coal has declined. The utilization rate of coal plants for electricity generation has expanded, however. Lignite was used to generate 25.4% of Germany’s electric power in 2014, up from 23% in 2010, while anthracite declined very slightly, from 18% in 2010 to 17.8% in 2014. Germany’s ability to control emissions has suffered substantially as a result. Emissions have exceeded 2009’s 910 million tons of greenhouse gas every year since then, and reached a high of 953 million tons in 2013 before falling once again to 912 million tons in 2014.

In fairness, Germany is still in the process of transition and no final judgments can be made about the success of its energy program. Nevertheless, the dilemma faced by Germany does indicate what might be expected in Taiwan, particularly in the short term.

Will Taiwan be capable of reducing carbon emissions, eliminating nuclear energy, and maintaining sufficient energy supply – all at prices that the economy can tolerate?

 

This story was updated on September 22, 2015, to reflect revised figures supplied by the Industrial Economics and Knowledge Center (IEK) under the Industrial Technology Research Center (ITRI). To replace nuclear energy in Taiwan, Taiwan would need an estimated 55 GW of installed solar PV capacity, covering 700 square kilometers. Additionally, Taiwan currently has 430 MW of installed solar PV capacity, not 300 MW as given in the earlier addition.

3 comments

  1. Dear Tim,

    always good to see you are writing on this topic. Short question from my side: the Bureau of Energy, MoEA is putting the installed capacity of PV at 687.1 MW. (of which 18.1 MW are operated by Taipower) http://web3.moeaboe.gov.tw/ECW/populace/web_book/WebReports.aspx?book=M_CH&menu_id=142 ( see 再生能源裝(設)置容量)?

    A thought on the land area argument. First of all that is only a small proportion of Taiwans available land (1.9%, at 36.193,km2, even if only 1/3 are usable due to mountains its 5.8%. / could not find a suitable land use number that quickly). Second it is questionable if that is a lump sum of ground mounted and roof top and BIPV systems or if this number actually falls back on a former study comissioned to the Institute for Nuclear Energy Research (imagine the tobacco industry writing the main body of work on the upside of being a non-smoker.) This argument is actually very popular, but ignores the amount of avaivalbe roof tops and land in Taiwan. (“Professor: You know, the world is flat. Columbus: Oh, I see, then I will stay at home.”)

    Regards

    Raoul
    Raoul

  2. Thanks for your comments, Raoul. The difference between the amount of installed capacity given by the MOEA and the amount given by ITRI is that that MOEA includes capacity that has been approved and is in the pipeline but has not yet been installed. ITRI’s number is currently available capacity. That number will presumably rise by year’s end.
    The amount of solar PV required to replace nuclear power was supplied by ITRI as well. I can’t testify as to the ultimate provenance of their numbers but considering that ITRI’s Green Energy lab has been a major force behind Taiwan’s solar PV and LED industries, I would assume they have an interest in promoting solar PV.
    Unauthorized rooftop structures and food security add to the challenges of solar PV installation.
    Social and political will are of course the biggest challenges.

Leave a Reply

Your email address will not be published. Required fields are marked *