1. 1 APEC EWG N&RE EXPERT GROUP 20TH MEETING Huang WU Energy Commission Ministry of Economic Affairs Chinese Taipei November 4, 2002, Seoul Village Power Opportunities and Challenges in Chinese Taipei

2. 2 Background Chinese Taipei is densely populated and over 99% enjoy electricity services. Opportunities on renewable village powers are relatively limited : Remote Areas or grid capacity insufficient Endowed with rich renewable energy sources VPS can play role to assist government achieve policy goals for a stable, efficient,clean electric supply system

3. 3 Energy Supply Structure in Chinese Taipei Dependency of Importation ： 85.3% 95.3% 96.9% MKLOE *Annual increased by 6.1% during last two decades *Limited indigenous supply, 97% importation GDP (US$) ： 2,542billion 5,519billion 9,376billion 108.5 53.8% 23.2% 58.5 32..9 3.6% 5.1% 15.6% 67.7% 2.1% 8.2% 7.1% 50.3% 32.3% 2.5% 15.0% 5.5% 8.0%

4. 4 *Electricity shares increase, oil products decreased. Energy Consumption by Energy Type MKLOE 9,483 MKLOE 5,519 MKLOE 2,852 34.2% 5.4% 51.4% 9.0% 41.9% 3.9% 41.8% 12.4% 47.6% 2.5% 38.8% 11.1% 1981~1991annual Growth Rate Energy Consumption : 6.8% GDP: 8.1% 。 1991~2001annual Growth Rate Energy Consumption : 5.6% GDP: 5.4%

5. 5 Reserved Rates ： 15.3% 4.8 % 13.2 % Electricity Generation Capacity (by business types)  Annual Growth Rates (1981-2001) ：  Total Installed Capacity : 6.5%  Peak Load Demand : 7.0% 19,770 MW 100.0 % 35,570 MW 15.3% 7.6% 77.1% 10,160 MW 7.0% 93.0%

6. 6 Electric Installed Generation Capacity (by fuel types) 19,770 MW 13.7% 22.2% 54.5% 9.6% 35,57 0 MW 6.8% 7.3% 14.5% 18.2% 20.1% 33.1% 10,160 MW 8.2% 5.1% 26.0% 3.8% 32.3% 24.6%

7. 7 Changes in Foreign & Domestic Energy Situation Trend toward Liberalization of the Energy Industry Increased Environmental Protection Pressure Promoting Energy Efficiency Enhancing Energy Safety and Environmental Protection Stabilizing Energy Supply Reinforcing Energy Research and Development Promoting Energy Education and Dissemination Background Policy Guidelines Energy Policy in Chinese Taipei Deregulating Energy Enterprises Liberalized, Orderly, Efficient, and Clean Energy Supply and Demand System Overall Objective Framework of Energy Policy

8. 8 Village Power Opportunities in Chinese Taipei The opportunities on renewable village powers are limited, some areas may remain potentials: Small islands andremote areas that are sparsely populated. Penhu (39,846 household), Jimen (19,792 household), Machu (3,999 households). There are about 100 diesel-power generators under operation on these islands, with a total installed capacity of about 200 MW, providing a peak power supply of over 110 MW. Due to the high unit cost of diesel power generation, plus noise and environment concerns, these isolated systems are good candidates under this category. Areas that endowed with renewable energy resources: western coasted areas with wind energy; Agriculture or Feedstock wastes Areas that power grid capacity insufficient: The construction of power grid

9. 9  Village Renewable Potentials in Chinese Taipei Off shore islands Agricultural & Feedstock wastes － stable,efficient,clean supply of electricity Interconnection Sea Cables feasibility study Windy west coast areas (Wind Farm) Off shore small islands

10. 10 Village Power Application in Chinese Taipei  Renewables : wind, solar PV  Hybrid System  Cogeneration : co-generation of steam; chilled water and other thermal utilization.  Other Coversion Technolgies : Fuel Cell; Micro-turbines

11. 11 Removing non-economical barriers Liberalization of the electricity markets Land acquisition and permission use Providing Incentives for application of renewable energy providing financial incentives (tax credit, subsidize) legislating “Renewable Energy Development Bill” Promotion of RD&D Solar Cities ( BIPV) :integrate with architect building designer Wind Farms: Green Islands: a feasibility study to convert the Green Island and PonHu Islands into a sustainable energy demonstration island. The result of these studies will be available next year. Technological reserch and devepment:cost down, high efficiency and tablility;(ex. nanotechnolgy application) Key Tasks for Promoting Village Power in Chinese Taipei

12. 12 1. Opening of the Independent Power Generation Industry 2. Revision to the“Electricity Law” proposed a deregulated Utilities 3. Deregulation of State-Own Utilities Strategies in Response ： Challenges for the Power Generation Deregulation

13. 13 ◎ ChangSen 900 MW(NG) ◎ ShinTao 600 MW(NG) ◎ MaiLiang 1800 MW(Coal ) ※ ChiaHuai 670 MW (NG) ◎ Hopeing 1300 MW(Coal) 註： 1st phase IPPs 2nd phase IPPs ◎ Commercial Operation ※ Under construction Since 1999, IPP has entered into power market. There will be totally 8 plants with a capacity of 7,200 MW. 台北縣 桃園縣 新竹縣 苗栗縣 宜蘭縣 台中縣 南投縣 花蓮 縣 彰化縣 雲林縣 嘉義縣 台南縣 高雄縣 台東縣 屏東縣  Status of IPP Promotion ※ KuKung480 MW(NG) ※ SinLung 490 MW(NG) ※ SunBa 980 MW(NG) 3rd phase Ipps

14. 14 Liberalization of Power Industry in Chinese Taipei Transmission Integrated Utility General Users Existing Generation IPPs (Non-utility) Direct users Contract Users Obligation for supply Generation Contract Whole Sale Electric Firms Obligation for renewable: 1.self construct 2.contracted with others 3.fund Obligation of hydro, nuclear and renewable power supply. Setting a renewable quota for purchasing or self-construction Self- producer New Generation (Non-utility) ISO No renewable obligation for small plants Self-built tie-lines Self- uses Distribution

15. 15 1. Formulating strategies for the development of Renewable Energy in response to the impact of the United National Framework Convention on Climate Change 2. The cost of renewable energy is still too expensive to be widely applicable for domestic power generations. 3. Many more non-technical barriers than anticipated for the promotion of RE. Promotion of Renewable Energy Main Impediments:

16. 16 1. A” Renewable Energy Promotion Program” in the form of an executive order to coordinate all parties involved toward the rapid removal of all non- technical barriers to the promotion of RE. 2. To create a sustainable environment favoring utilization of renewable energy, a ” Renewable Energy Development Bill” has been submitted to the Congress for approval in August 2002. Strategies in Response ： Promotion of Renewable Energy

17. 17 Current Incentives for Promotion Renewable Energy

18. 18 Key Elements  Legislating Renewable Development Bill

19. 19  Strategies for Promotion of Renewable Energy 2.0 1.5 1.0 0.5 0 2.0 1.5 1.0 0.5 0 NT$/Kwh Demonstration Electricity subside Y Z Renewables Y Z X NT$/Kwh Renewables Traditional Energies 補 貼補 貼 B 1.27 Traditional Energies External Costs Scale-UP and Technological advancement A > 1.7 Renewables Long-term trend PV 15-24* Long-term trend of generation cost Current Incentives Traditional Energies High cost or new technology *battery included Stipulated by the law X X Install subside

20. 20 1. The Promotion of Village Renewable Power would require breakthrough in various regulations (e.g. land-use, building codes, grid- connection standards etc), which require inter- agency coordination mechanism to overcome multiple barriers. 2. To initiate DG and speed up the utilization of Village RE, the revision to the “Electricity Law”, the formulation and passage of “Renewable Energy Act” and the execution of “Renewable energy promotion program” are among the most important actions to be undertaken by the government. 3. A clear and definite target for RE development has been committed, with good progress to date. Concluding Remarks