Taiwan’s green energy industry was one of the most promising industries back in 2016, when the government pledged full support to green energy developments as part of its greater push to build energy resilience and combat climate change through a policy revamp. However, the industry’s development trajectory over the past two years has been tarnished by a handful of local government official corruption cases and toxic solar panel disinformation, which raised public concern and spurred opposition against solar system installations.
Since then, solar energy deployment has stagnated. Overall, renewable energy, mostly solar, accounted for about 12 percent of total power generated as of September last year, Energy Administration statistics showed.
What is worse is that Typhoon Danas in July last year caused severe flooding in southern Taiwan and affected 33 solar plants, damaging more than 100,000 solar panels. The incident deepened people’s worries about the safety and reliability of solar energy, although solar power is a highly reliable energy due to durable panels with low failure rates and long warranties of 25 years or longer.
Taking advantage of such unfavorable developments, the opposition-led Legislative Yuan in October last year pushed through three acts to tighten the regulations and step up oversight of new solar panel installations before the new rules were fully discussed. Environment impact assessments would be required for the deployment of large-scale solar systems after those three acts take effect — the Environmental Impact Assessment Act (環境影響評估法), the Act for the Development of Tourism (發展觀光條例) and the Geology Act (地質法).
The implementation of such rules would lengthen the deployment period and increase installation costs, as the amendments stipulate that ground-mounted solar panels are strictly prohibited to be installed in national scenic areas or geologically sensitive zones without an environmental impact assessment.
With the restrictions, about 19 percent of solar applications have been approved and connected to the grid so far, while large-scale ground-mounted solar projects and agrivoltaic projects have been stalled, the nation’s seven major solar energy associations have said.
The future of Taiwan’s solar industry and green energy industry is scattered and uncertain. It is foreseeable that the government would miss its target of boosting green energy to 20 percent of power generated this year. Not only are solar deployments in limbo, offshore wind energy development is also slowing down because of high costs, financial strains and localization hurdles.
Green energy is not simply an environmental protection issue or about the transition to clean energy, but a key factor weighing on the nation’s industrial development. Taiwan’s economy is heavily dependent on the semiconductor and electronics sectors, which consume large amounts of power. Since contract chipmakers Taiwan Semiconductor Manufacturing Co (台積電), United Microelectronics Corp (聯電) and iPhone assembler Hon Hai Precision Industry Co (鴻海精密) are required to join the RE100 initiative to reach carbon neutrality to match the promises of their customers, demand for green energy would only accelerate.
Taiwan would require 40 terawatt-hours of green energy by 2030, with half of the demand coming from semiconductor companies, according to a conservative estimate of the associations. Some even estimate that demand would rise to 70 terawatt-hours, thanks to heavy power consumption by artificial intelligence applications and data centers.
As the EU is gradually introducing a carbon border adjustment mechanism and moving to close the loopholes in its carbon border levy, the demand for green energy would only increase as local enterprises have to increase adoption of green energy and reduce their carbon emissions to enter the market. Without a stable and sufficient supply of green energy, Taiwanese companies would face a higher tax burden and greater risks of being excluded from the supply chain.
To avoid being marginalized, the government has to speed up green energy deployment effectively and streamline the review processes. Launching fast-track assessments for solar panel and wind turbine deployments should be an option. Additionally, the government should come up with clear and transparent regulations for the newly passed acts to process environmental impact assessments and shorten the review process. Only when the investment environment improves would green energy deployments gather pace.
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