Sat, Oct 15, 2016 - Page 1 News List

Electricity draft a ‘setback’ for industry

MONOPOLY:Power generators must sell to Taipower for distribution under the draft amendment, unless a ‘renewable’ energy company builds its own distribution network

By Lauly Li  /  Staff reporter

Wind turbines at a wind farm in Penghu County are pictured in an undated photograph.

Photo: Courtesy of Taiwan Power Co

Academics yesterday criticized the Executive Yuan’s policy stance on a draft amendment to the Electricity Act (電業法) as a “great” setback for the government’s policy to liberalize the nation’s electricity industry.

“The government’s stance represents a policy U-turn, because Taipower [Taiwan Power Co (台電)] would still monopolize the industry,” said Kimmie Wang (王京明), research fellow at the Chung-Hua Institution for Economic Research’s (中華經濟研究院) Center for Energy and Environmental Research.

The proposed amendment would make no difference to liberalizing the industry, because non-renewable energy firms are still not allowed to enter the market to compete with Taipower, he said.

Wang’s criticism came after the Executive Yuan on Thursday outlined the draft amendment.

Cabinet spokesman Hsu Kuo-yung (徐國勇) said the draft would focus on developing the “green” energy industry in its first phase as part of government efforts to reduce thermal electricity generation and carbon emissions, and to improve environmental protection.

Hsu said “renewable” energy companies and power distribution firms would be allowed to sell electricity directly to enterprises through Taipower’s distribution network or by setting up their own distribution networks.

In the second phase, Taipower would be split into two companies — a power generation company and an electrical grid company — six years after the amendment takes effect, as part of efforts to liberalize the industry, Hsu said.

Private power generators still cannot sell their electricity to households, he said.

National Taiwan University Atmospheric Science professor Gloria Hsu (徐光蓉) said she is very disappointed that Taipower is likely to retain its monopoly in the industry.

As the Electricity Act has not been amended for nearly two decades, the government may fall short of liberalizing the industry, she said.

“The proposed amendment has ended the possibility of developing a healthy electricity industry in the nation,” she said by telephone.

Taiwan has used a feed-in tariff (FIT) program for several years in a bid to accelerate investment in “renewable” technologies by offering favorable prices to “green” energy producers.

However, if the government does not plan to initiate a sunset clause to the FIT program, Wang said many “renewable” energy producers would continue with the scheme to avoid additional costs, such as erecting power lines.

Bureau of Energy Director-General Lin Chuan-neng (林全能) said he does not think the policy is a setback for the government.

He said that the amendment is not exactly the same version the bureau drafted a few months ago, but it would still change the industry and provide stable electricity supplies.

Lin said giving the “renewable” energy industry more flexibility is a big step for the government and separating Taipower into two companies in six years would also pave the way toward liberalizing the industry.

“If the government pushes the liberalization too hard it will make it more difficult to reform the industry,” Lin said.

The bureau is to send a final version of the draft amendment to the Executive Yuan next week for approval, before submitting it to the Legislative Yuan for further review, it said.

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