Wed, Oct 18, 2017 - Page 8 News List

Digital revolution in energy business

By Yang Chung-han 楊宗翰

At this year’s Taiwan Business Alliance Conference, 22 foreign enterprises signed letters of intent with the Ministry of Economic Affairs to invest about NT$106.3 billion (US$3.5 billion) over the next three years.

“Green” energy is the highlight of all the potential investment plans. Taiwan’s low-carbon energy transition has attracted several international players, such as Copenhagen Infrastructure Partners, Energco, Siemens, wpd AG and Northland Power.

Meanwhile, President Tsai Ing-wen’s (蔡英文) administration is implementing the “five plus two” industrial innovation plan and the Forward-looking Infrastructure Development Program to build ecosystems for the seven prioritized “pillar industries,” including green energy, “smart” machinery, biotech, the digital economy and the Internet of Things.

However, the policy initiatives mainly put an emphasis on each sector’s infrastructure enhancement and the connections and potential synergy between these industrial development strategies have not been well addressed.

The interplay between digital economy and the energy sector illustrates this, as Taiwan liberalizes its electricity market and develops “smart” grid systems simultaneously based on the policy goals mentioned in the Renewable Energy Development Act (再生能源發展條例) and the Electricity Act 2017 (電業法).

Recent global trends have shown that digitalization is transforming multiple industries. The WTO Public Forum has debated digitalization in facilitating inclusive trade and cross-border investment. Agreeing to a new digital trade agenda has become a core issue in the Trans-Pacific Partnership and other large regional free-trade negotiations.

In April, the International Energy Agency hosted a Digitalization and Energy Workshop to evaluate the effects of digital transformation on the electricity power sector and to identify future business and regulatory opportunities.

On the supply side, digitalized electricity supply industries are expected to provide more real-time services and extend the operational efficiency of their distribution assets. New cross-industry partnerships are being formed, as large service providers realize that they need to gain more expertise in digital know-how and data management.

On the demand side, digitalization also changes the patterns of consumption and makes customers as important partners in the energy systems. The era of passive customers and old-fashioned utilities is over. With increased consumer participation, smart connected devices will optimize a more dynamic and efficient energy market.

To respond these trends, the EU has begun to digitalize its energy system and operations since the early 2000s.

This month, ENTSO-E, the European Network of Transmission System Operators, published an IT road map beyond 2020, which aims to put smart-networked consumers at the center of the new European electricity market design and enable the transition toward a sustainable power system with a high share of renewables.

At the early stage of “the fourth industrial revolution” driven by data economy, Taiwan’s energy sector has already established solid industrial know-how and attracted abundant investments from both the public and private institutions.

Nonetheless, more horizontal coordination between energy, technology and environmental policymakers is needed.

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