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Taiwan Officially Sets Renewable Energy Target, Aiming 20GW of PV Installations by 2025
2016-06-28   |  Editor:rheatsao  |  967 Numbers

President Tsai Ing-wen’s team is proactive in the green energy sector. A month after Tsai took office, the Minister of Economic Affairs went to the Legislative Yuan to report the renewable energy policy. The goal for PV installation is officially set at 20GW by 2025, and for offshore wind power is updated from 2GW to 3GW.

The previous executive team set the goal of renewable energy installations of 17.25 GW by 2025, including 8.7GW of solar PV and 5.2GW of wind energy. The new executive team increased the target significantly. The Ministry of Economic Affairs plans to cumulatively install 1,342MW of solar PV by the end of this year, 8,776MW by 2020, and 20GW by 2025. As for the installation target of 1,342MW by the end of 2016, it means that PV installations in Taiwan in the second half of 2016 should reach 500MW.

Both release of land use and power grid infrastructure required for Taiwan

EnergyTrend thinks that it depends on whether the use of land is effectively managed, the power grid infrastructure is sufficient, as well as the green energy funding is secured, to achieve the 20GW target.

In regards to land, the Bureau of Energy under the Ministry of Economic Affairs previously said that they will use the land that are released by Council of Agriculture (COA) for installing ground-mounted PV power plants. These land includes subsidence areas, salinized land, contaminated land, landfills and other enclosed spaces. As for rooftop systems, the government will start promoting installations on the roofs of public buildings, industrial factories, central government units, agricultural greenhouses and integrated architecture applications. C.K.Lee (Chih-Kung Lee), Minister of Economic Affairs, said that his executive team would try to obtain 10,000 hectares of unused land from COA for large-scale solar power plants. According to EnergyTrend’s research, one hectare can have 1MW of solar installation capacity, so there will be 10GW of solar on land of 10,000 hectares. If the 10,000 hectares land can be used properly, the goal for 2025 is not too high to reach.

Yet the grid issues, such as overly high costs, insufficient capacity for grid-connection, uneven feeder line allocations and excessive transfer distance, can be big obstacles. The same issues have already occurred in China, Japan and Germany.

Taiwan Power Company once told EnergyTrend that the total costs to build a set of feeder line can be extremely high due to high costs of both feeders and substations, particularly a substation compatible with a solar energy system. The costs to build a solar PV compatible substation can be up from tens of millions NT dollars, while the cost of a substation for a 500 MW solar park could even be over NT$100 million. Furthermore, substation installation can be objected by residents who live along the high-pressure cables. As a result, it is necessary to consider time and hidden costs when communicating and negotiating with different parties.

Short-term goals may be difficult to achieve

In EnergyTrend’s view, Executive Yuan’s current platform shows promise to ultimately increase PV installation capacity in the long run. Positive factors include cross-department cooperation, loosening regulations introduced by the Ministry of the Interior, Taipower’s power grid infrastructure development, and promotion of large-scale bidding. However, Taiwan’s short-term goals, such as the 1,342MW target for 2016, will be challenging to achieve.

To finish the remaining 500 MW of PV installation this year, capacities of PV installations should be doubled over the same period in 2015. According to Bureau of Energy’s data, at the end of April, the cumulative solar installation was only 929MW, and the newly added installation in the month was only 86MW. EnergyTrend forecasts that unless 140MW is installed in the first half of the year, and 360MW in the second half of the year, it is difficult to achieve the 500MW target by the end of 2016.

(Author: Celeste Tsai, Analyst at EnergyTrend)