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Taiwan’s major electricity consumer regulation set to take effect November

June 17, 2020 PV InfoLink

CN TW EN

The “major electricity consumer clause” under the Renewable Energy Development Act is scheduled to come into force in November, after the Ministry of Economic Affairs (MOEA) amends the subsidiary laws based on public opinions.

The draft, published in February this year, has been put on hold due to disagreements over related measures. 

Firstly, the drafted clause defines a user with contract capacity of more than 5,000 kW as a major electricity consumer. The definition raises concerns about the major electricity consumer threshold, as the ministry is planning to review applicable users on a biannual basis. Electricity consumers responded that they should be notified in advance if the threshold is lowered, let’s say, to 800 kW.

According to the clause, major electricity users are required to install 10% of the contract capacity in five years. After receiving feedback from the business sector, the ministry may amend the clause to allow users fulfill the obligation in phases.

If the contract capacity exceeds a certain volume, users shall install renewable energy generation systems and storage facilities with certain installed capacity or provide space for the purpose or purchase a certain amount of renewable energy and a Taiwan Renewable Energy Certificate (T-REC). 

Users who fail to meet the requirement shall pay monetary substitution, which is initially set at NT$ 4.06/kWh (US$0.14) by the MOEA. This is the least favorable option as a user could pay up to NT$ 5.07 million (US$ 170,000) a year based on the rate.

If users choose to install storage facilities, the system needs to store energy for at least two hours and maintain a certain level of energy efficiency for ten years.

Regarding the T-REC option, users could trade every KW of chartered renewable energy capacity through buying 2500 kWh of green certificate a year. However, the parameters differ in accordance to different renewable energy sources. For instance, a kilowatt equals to1250kWh for solar power, 2500 kWh for onshore wind and 3750 kWh for offshore wind. Some renewable developers concern that major electricity users will only buy solar power to save costs. 

The ministry offers to grant 20% reduction in chartered capacity to users who complete installation within three years and 10% to those that can complete in four years. However, the mechanism fails to appeal major electricity consumers as the cost of renewable energy decreases over time. Some businesses suggest that MOEA should put forward more lucrative initiative.

The stipulation of major electricity consumers is projected to boost NT$ 60 billion (US$2 billion) opportunities and 1.05 GW installed renewable capacity in Taiwan.

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