Since the Renewable Energy Development Act (再生能源發展條例) was amended in April, Article 12 — also known as the “major electricity consumer clause” — has become key to boosting the nation’s renewable energy development by requiring that major electricity consumers use a certain amount of renewable energy.
The Ministry of Economic Affairs has been discussing the threshold for defining a consumer as a major electricity consumer, as well as related supplementary measures. The resulting subsidiary laws could encourage industrial electricity consumers in the private sector to join the nation’s energy transformation efforts, or it might put a halt to the development of renewable energy.
According to newspaper reports, after considering the nation’s supply of renewable energy and the burden of businesses, the ministry is planning to change the major electricity consumer threshold by increasing contract capacity from 800 kilowatts (kW) to 1,600kW.
Meanwhile, Taoyuan, home to the greatest number of major industrial energy consumers in Taiwan, has been planning to reduce the threshold from 5,000kW — designated by the city government’s Department of Economic Development in accordance with Article 25 of the Taoyuan Self-governance Regulation on the Development of a Low Carbon Emissions Green City (桃園市發展低碳綠色城市自治條例) — to 800kW, thereby asking more businesses to increase the proportion of alternative energy used in their electricity consumption.
One wonders whether the ministry, at its wit’s end trying to designate the threshold value for major electricity consumers, is helping energy users to shirk their social responsibility or pragmatically helping fulfill the nation’s renewable energy target.
To explore the issue, it is necessary to evaluate the impact of major electricity consumers on Taiwan’s overall energy usage.
For the past 20 years, 68 percent of the growth in electricity usage can be attributed to industrial demand. The massive increase in thermal power plants to meet the rapid consumption increase has led to deteriorating air quality around the plants and greenhouse gas emissions.
The act’s subsidiary laws are to define a contract capacity threshold to determine which companies should be categorized as major electricity consumers and require them to face the external costs incurred by massive energy usage.
If the threshold is lowered, the government would be unable to enforce the law and demand that businesses fulfill their environmental responsibilities, and the clause would come to exist in name only.
According to ministry data and Greenpeace estimates, there are about 5,000 major electricity consumers in Taiwan whose contract capacity exceeds 800kW.
If these users turn to renewable energy for 10 percent of that capacity in accordance with local government ordinances, they would only yield 1.6 billion kilowatt-hours by 2022, or 0.6 percent of the nation’s renewable energy needs.
Greenpeace argues that to achieve fair electricity consumption obligations, most of the additional green energy supply should be developed in response to business demand in accordance with legal requirements.
The government should also evaluate the feasibility of using electricity consumption as the basis for calculating the price of electricity, as well as allowing businesses to buy energy through free-market transactions.
This would be the only possible way to ensure that the additional green energy would not be dependent on the procurement price assigned by the central government’s renewable energy development fund.
It could also help the nation surpass its energy transformation goal of 20 percent of energy generated from renewable sources by 2025.
On the other hand, if the ministry insists on raising the contract capacity threshold to 1,600kW, the number of affected users would drop drastically to 600 companies, and major electricity consumers — who use more than half of the nation’s energy — would only be responsible for less than 1 percent of renewable energy, which creates a great imbalance in electricity consumption obligations and fails to match the legislation’s original intentions.
In Greenpeace’s opinion, reducing green energy obligations to end a backlash from major electricity users opposes the spirit of the legislation. Narrowing the gap between industry and renewable energy requires a pragmatic increase in the amount of green energy available on the energy market and supplementary measures should be drawn up to prevent businesses that are capable of making investments from sitting back and waiting for Taiwan Power Co to provide renewable energy.
The government should also work on enhancing the added value for business installations of green energy facilities to effectively expand the scale of renewable energy development.
Tsai Tu-wei is Greenpeace’s distinguished project manager of energy.
Translated by Chang Ho-ming
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