Category
Author Dr. Yuan Fang-wei
Updated November 17, 2021

Policy-driven FTM storage

Taiwan, whose development of energy storage is rather slow and immature, mainly implemented demonstration projects with smaller size in the past two to three years. In 2020, Taiwan showed sign of energy storage development trends, with Taipower launching a procurement for energy storage AFC service under bilateral contracts, followed by tenders for projects located in Tainan, New Taipei City, and Kaohsiung. These tenders saw participation of various businesses, indicating the importance of policies to Taiwan’s energy storage development, which has begun to grow.

InfoLink projects developments of energy storage based on the current situation and future demand and divided the developments into front-of-the-meter (FTM) and behind-the-meter (BTM) storage. Drivers behind FTM storage include Taipower’s ancillary services, which will continue to expand, as well as application in wind and PV power plants. Although the application in renewable energy generation is not regulated so far, InfoLink believes that the renewable sector provides the biggest potential for energy storage in Taiwan, just like how the U.S. and China developed its energy storage industry.

C&I sector for BTM storage applications is driven by the “major electricity consumer clause.” However, Taiwan does not provide a favorable condition for businesses to utilize energy storage for now. Other international regulations include RE 100 and ESG. Other drivers include the lowered threshold of 800 kW under the “major electricity consumer clause,” islets, and charging stations.

Policy-driven FTM storage


20 GWh energy storage deployment and 200 billion economic scale by 2030

Based on Taipower’s planned capacity for ancillary service until 2025, the “major electricity consumer clause,” and other related policies, InfoLink projects that the energy storage market will experience significant growth from 2023 onwards in Taiwan, with cumulative installed capacity surpassing 1 GW/3 GWh and its market share exceeding 1% in the global electrochemical energy storage market by 2025. From 2026 to 2030, energy storage is expected to enter a period of installation boom, as deployment of renewable energy increases and costs for energy storage systems reduce. Under an optimistic scenario, cumulative energy storage installations will jump from 3 GWh to 20 GWh in 2030.

Development of energy storage in Taiwan is quite similar with that in China. Residential-BTM storage is difficult to develop without mandate policy because electricity rates are cheap, energy supply is stable, and equipment is expensive. Therefore, Taiwan will focus on developing FTM storage, followed by BTM-C&I. InfoLink projects that FTM storage will make up 90% of the energy storage deployment in Taiwan, with solar-plus-storage applications reaching 50%. In terms of economic scale, energy storage market is expected to surpass NTD 10 billion by 2023 and NTD 20 billion by 2026. The total energy storage economic scale is likely to reach NTD 200 billion by 2030 if the industry retains its rapid growth. This offers opportunities for industries and businesses that seek transformation.
 

Economic scale of Taiwanese ESS market


 

* For more solar-plus-storage market analysis, contact service@infolink-group.com for the 2H21 Solar-plus-storage Global Market Report