On July 1, the Ministry of Economic Affairs launched a trial “green power rate.” Users have to pay an additional NT$1.06 for each kilowatt-hour (kWh) of low-carbon green energy that they purchase. Based on last year’s average electricity price of NT$2.89 per kWh, buyers are paying NT$3.95 for 1kWh, and the total price may be higher if the electricity price goes up.
The ministry’s trial scheme has received little response so far, and only 19 companies and a few households are using it. That being so, some pro-nuclear power activists are mocking the antinuclear power camp, saying that environmental activists are unwilling to pay just a little bit more for green energy despite their calls for the promotion of renewable energy sources.
The ministry says that this volunteer green power trial scheme emulates international green energy sales systems, and that the trial is a market mechanism based on volunteer purchasing.
With the 2009 Renewable Energy Development Act (再生能源發展條例) and the volunteer trial scheme, the government is promoting the development of renewable energy from both supply and demand aspects. However, the trial scheme is not being implemented for the sake of promoting renewable energy, and both framework and pricing are problematic.
Taiwan’s solar panel production has been the world’s second-highest in recent years, and the Renewable Energy Development Act has been in place for four years. Still, the combination of solar and wind power accounts for less than 1 percent of the nation’s total power generation, and solar photovoltaics account for less than 0.15 percent. The nation is ranked 26th in the world in terms of solar photovoltaic production, and it is not only behind advanced countries such as Germany, France and Greece, but also other countries such as South Korea, Thailand and even Ukraine.
Japan launched its Feed-in Tariff Scheme for Renewable Energy in 2012 to encourage the development of renewable energy sources, and the percentage of solar photovoltaics quickly rose to 1.5 percent of its total power generation in just over a year.
Taiwan has the technology, capital and talent, but the development of renewable energy sources has been stagnant due to the government’s belief that nuclear power should play the lead, with renewable energy playing a supporting role.
Taiwan Power Co (Taipower), which monopolizes the market, has more power generation equipment than it needs, but is still expanding despite the low equipment utilization ratio. How can it tolerate the development of renewable energy sources under such circumstances?
As a result, the company creates technical barriers to private power plants and threatens the public from time to time, saying that renewable energy sources are expensive and unstable so as to maintain its near monopoly.
Why, then, is the government launching the green power rate now?
First, it is trying to strengthen the impression that renewable energy sources are expensive.
Second, it is trying to mislead the public into thinking the government values environmental protection.
Third, companies can obtain a certificate from Taipower for purchasing green energy voluntarily, which can enhance their environmentally friendly image and lower the risk of sanctions in the international market, which attaches great importance to environmental protection issues.
Fourth, the government can criticize enterprises or individuals opposed to nuclear power for being pretentious if they do not purchase green energy voluntarily.
Fifth, Taipower can make hundreds of millions per year by selling green energy.
Unfortunately, all five factors are harmful to the development of renewable energy sources.
Taipower is the only power company in the nation capable of generating, distributing and selling electricity. Private power plants and consumers can only sell or buy electricity through the company and at the prices it decides. This is clearly a violation of the free market mechanism, not to mention that the so-called green power rate itself is questionable.
Total solar and wind power generation was almost 2 terrawatt hours last year, and solar photovoltaics accounted for 17 percent of that volume. Based on Taipower’s feed-in tariff for solar photovoltaics and wind power in the same year, the average price for energy from renewable sources was NT$3.44 per kWh, and this is expected to decline to NT$3.32 per kWh this year.
Compared with the regular electricity price of NT$2.89 per kWh, the price of renewable energy is only NT$0.43 to NT$0.55 higher. However, the government’s trial scheme requires volunteer purchasers to pay an additional NT$1.06 per kWh green energy that they purchase. Is it trying to make exorbitant profits?
Apart from this profit, the trial scheme vaguely claims that perhaps the additional fee attached to renewable energy sources in accordance with the Renewable Energy Development Act can be reduced, but it does not specify what the extra fee is to be used for.
At the moment, solar and wind power accounts for less than 1 percent of the nation’s total power generation, so by increasing the cost by NT$0.5, the average price will only be increased by NT$0.05.
The average electricity price has risen by almost 30 percent over the past six or seven years as a result of several factors, including the importation of fossil fuels, price fluctuations of uranium, Taipower’s excessive investment in equipment and poor electricity generation efficiency. That means that the electricity price hikes are unrelated to the development of renewable energy sources.
The government’s green power rate is suspicious. It seems to be a moneymaking scam intended to improve the government’s image, and it is not afraid of hurting the development of renewable energy sources to achieve its goals.
The government almost behaves as if it were a fraud ring, the only difference being that it has failed to deceive the antinuclear power activists. It is in fact those who are criticizing activists for not purchasing green energy voluntarily that have been deceived by the government, which is the cleverest fraud of all.
Gloria Hsu is a professor in National Taiwan University’s Department of Atmospheric Sciences.
Translated by Eddy Chang
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