A few years ago, the Ministry of Economic Affairs formulated a two-stage plan to amend the Electricity Act (電業法) to encourage electric power generation from renewable sources. The first-stage amendments, which the legislature enacted on Jan. 11 last year, opened the door to the liberalization of both ends of the renewable market: the generation and sale of electricity. This step marked a milestone in Taiwan’s energy transformation project.
The legislature is now deliberating proposed amendments to another important law that concerns Taiwan’s energy future — the Renewable Energy Development Act (再生能源發展條例).
Greenpeace believes that the foremost purpose of these amendments should be to establish robust mechanisms for free trade in renewable energy, making it possible for businesses and the general public to purchase genuine “green” electricity.
A broad look at the progress that various countries have made developing and transitioning to renewable energy shows that most of them have promoted liberalization of the electricity market so that consumers can fairly and freely choose from various types of electricity sources, thereby achieving energy diversification.
Taiwan’s energy reforms, on the other hand, give precedence to the adoption of green energy sources. They involve first opening up the markets for renewable energy electricity generation and sales, and then going on to gradually complete the process of electric power liberalization.
A year after the Electricity Act was amended to open up the market for sale of renewable energy, the Bureau of Energy announced regulations concerning the direct and indirect supply of electricity. This enables renewable energy power generation companies to skip Taiwan Power Co’s wholesale contracts and, through power purchasing agreements and other means, sell electricity directly to businesses that are heavy power users.
Although the amendments to the Electricity Act opened up the market for selling renewable energy, there are still no associated regulations or implementation rules governing the electricity sales business. Small and medium-scale enterprises and households must wait for related regulations before they can freely choose the source of electricity they use.
As long as people cannot buy green electricity, they are unlikely to be very aware of what the government is doing to promote the development of renewable energy and bring about change.
The main purpose of amending the Renewable Energy Development Act at this stage should be to remedy this situation. Establishing comprehensive mechanisms for free transactions in green electricity would help create a renewable energy electricity sales sector through which businesses and individuals could buy green energy, thus genuinely giving “power to the people.”
Among the proposed amendments to the Renewable Energy Development Act, the one that has attracted the most attention is Article 12, under which business consumers would be compelled to get a certain proportion of the electricity they use from renewable energy sources.
Greenpeace has for a long time encouraged businesses around the world to use renewable energy so that they can use their influence to lead the way in the worldwide energy transition to mitigate climate change.
Greenpeace is happy to see the direction that Taiwan’s legal amendments are taking, but among the clauses that are in the early stages of deliberation, those that concern the means by which businesses can buy renewable energy only list certification, while leaving out the key aspect of electricity transactions.
This will not help encourage electricity generation businesses to go beyond wholesale contracts and sell green electricity to businesses through direct or indirect supply. It could also lead to a situation where, although transactions are certified, the electricity is not actually generated from renewable sources.
The call for businesses to use green electricity would then be no more than empty words. To avoid such an unfortunate outcome, wording should be added to the proposed amendments that stipulates “buying electricity from renewable resources” as an option for large-scale electricity users.
For the electric power market to be gradually opened up, the government must first establish operation mechanisms for a robust competitive market. It should also make information more transparent and expand the space for public participation.
The proposed amendments to the Renewable Energy Development Act are meant to give precedence to the adoption of green energy sources and give people the right to freely choose their source of electricity. Whether and how they will achieve this depends on how legislators apply their expertise and wisdom.
Lee Chih-an is the energy project manager at Greenpeace East Asia in Taiwan.
Translated by Julian Clegg
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