Elemental Decisions

Economic News

22 Jul 2010
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This month the bureau of energy, under the ministry of economic affairs, finalised guidelines for a programme to encourage companies to develop offshore wind turbines.



The new programme comes just as sites for onshore wind turbines on the island are reaching saturation point. Six key areas have been identified, most along the western coast of Taiwan, where businesses will be allowed to build wind power turbines to take advantage of the wind-rich resources in the Taiwan Strait. Coastal areas enjoy average wind speeds of five to six meters per second and are subject to strong northwesterly winds for six months of the year. The government estimates that projects completed under the programme are expected to add NT$40bn ($1.2bn) to the output value of related local industries.



The ministry of economic affairs (MoEA) has actively encouraged the use of renewable energy in the past seven years through a variety of development initiatives that have been given their impetus by the country's lack of indigenous fuel resources. The government's aim is to encourage energy sector diversification while reducing the country's dependence on fuel imports, which currently represent around 98% of total energy supply.



In July the MoEA issued a report on Taiwan's industrial development and renewable energy use in which it outlined its goal that renewable energy generation account for 10% of the nation's energy capacity, around 5139 Megawatts (MW), by 2010. Wind power, solar photovoltaic, terrestrial heat, water power and biomass fuels form the short-term development focus of the MoEA in this regard. Hydrogen energy and fuel cells are expected to be targeted in the future.



Taipower, the national power utility company, began to utilise wind energy in 2001 and is actively involved in helping the government increase its sources of renewable energy. In this regard, it established a long-term plan for the development of wind power generation that commits to building 200 wind turbines by 2010. In the longer-term, between 2010 and 2020, Taipower will build a further 546 wind turbines off the west coast and the archipelago of Penghu with a total capacity of 1980MW.



Currently more than 100 onshore wind turbines have been set up across Taiwan, which have the potential to produce enough renewable energy to reduce annual carbon dioxide emissions by 250,000 metric tonnes.



The government began promoting the installation of large-scale onshore wind turbines in 2000 with an incentive programme. According to the MoEA, at the end of 2006 the total capacity of installed wind turbines reached 187.7MW, which is enough to generate electricity for 135,000 households. This figure is projected to increase to 2159MW by 2010 and to 2700MW by 2020.



Taiwanese firm Formosa Heavy Industries was one of the first to install a wind turbine farm under the 2000 programme and its current four units of wind turbines produce over 6m kilowatt hours per year. Formosa is among the companies that have expressed interest in building wind turbines under the new offshore programme, along with China Steel Corp and TECO Electric & Machinery Co.



Keen to see the development of local industry, the MoEA offshore wind turbine programme will require multinational corporations that receive licences to source some of their technology and components for the turbines from Taiwanese manufacturers.



Applications to build offshore wind turbines are being reviewed on a first come first served basis. Once a company has been issued with a permit to operate, it will be given three years to complete setting up its operation or it will forfeit its right to operate. More permits may be issued in 2010 when the government launches a second stage of the programme.



The MoEA will continue to allow land wind power development in tandem with the offshore projects.



In August, Taiwan's Institute of Nuclear Energy Research (INER) announced plans to create a solar energy research centre in southern Taiwan's Kaohsiung Science Park to promote development of solar power generation technology and industry. The 18,000-hectare research centre will be established in the next three years and is anticipated to become a hub that will enable the institute to transfer its core technology and develop inspection standards in order to build an inspection centre for solar energy products at a later date. The local county government has invited solar energy businesses to invest in the park.



Around 380,000 households in Taiwan currently use solar water heater systems, with a total installed area of 1.53m sq metres, according to the MoEA. INER would like to see the government collaborate with the Kaohsiung county government to build a 10m-kilowatt photovoltaic solar power generation system, which would generate electricity to be sold to Taipower.



Photovoltaic systems are currently being used in some government buildings to generate power for lighting. Such systems are more than twice as efficient as conventional electric power generation systems. The existing 168 solar photovoltaic power systems yield a capacity of 1581 watts and this is expected to be increased to 21,000 watts by 2010.



Legislation for renewable energy development is expected to be approved later this year. If passed, it will provide a variety of incentives to those who invest in renewable energy fields, including low-interest loans to companies engaged in research and development of solar energy-generating equipment.

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