Developers have expressed dissatisfaction with larger-than-expectation cut on 2019 wholesale PV power rates publicized by the Ministry of Economic Affairs (MOEA) on Nov. 29, according to which the rates for ground PV power and floating PV power will drop by 12.15% and 11.16%, respectively, to NT$3.7728/kWh and NT$4.1665/kWh from the 2018 levels, in addition to switch to fixed rates from existing tiered rates.

Developers criticized that the steep drop will overshadow the outlook of PV power in Taiwan, citing a global report which predicts average international PV-power wholesale rate to decrease by 4.25% annually in the coming years. The new rates are unreasonable, especially in view of relatively high external costs for PV power in Taiwan, according to developers.

Hung Chuan-hsien, chairman of United Renewable Energy, pointed out that in Taiwan, external costs (including land rental, giveback to municipal governments, and environmental-protection cost) accounted for over 30% of PV-power incomes, the highest worldwide, which has been compounded by the nation's special environment (such as salt damage, typhoon, earthquake, and land subsidence). This is a main factor why all of the island's five major PV power operators are still in the red.

Hung charged that the new rate is based on a formula in calculation, which fails to take into account rising land rentals, givebacks to municipal governments, and environment-protection costs.

With external costs expected to remain high and costs of feed lines, steel, and manpower to keep unchanged, Taiwan's PV power developers will benefit only from around 10% cut in module costs in the new year, or 2.5% drop in total costs, as modules have 25% share in the cost structure.

Market players also noted that potential sites for large-scale ground-mounted PV power stations, the backbone for the government 17 GW PV power installation target, are mostly located in backward areas, such as Yunlin, Changhua, and Chiayi, which need construction of power-generation infrastructure, at cost of around NT$10,000/kWh. Developers contend that they need adequate profits from their existing facilities, to help them bear the extra development costs.

Developers also request the government to provide extra 6% rate for ultra high-voltage large-scale ground-mounted stations, to help them cover the costs for installing voltage-booster facilities.

(First photo courtesy of Pixabay)