They blamed the government and state-owned Taiwan Power Co., which on behalf of the government acts as the only renewable power buyer, for erecting procedural barriers that make the approval for power purchase impossible.The UDN editorial, which is quite sensible, especially for UDN, raises a couple of key points. One is the EPA's bizarre position on power generation (compare to Beijing reporter Jonathon Watts' presentation in Taipei this week) in which it argues for coal and nukes over renewables. This is consistent with its many other "pro-industry" positions. The other is Taiwan's absurdly low power costs. Various numbers are out there on the net, including these from 2005:
Taipower and the Environmental Protection Administration (EPA) responded with their own newspaper ads, arguing that both solar and wind energy are unreliable and cannot possibly replace energy generated by traditional thermal or nuclear power plants.
Taipower and EPA also stated that, under the Renewable Energy Development Act, the prices at which the government is allowed to purchase electricity generated by the private sector using solar power or other renewable means were "unreasonably high" -- five times higher than that for electricity supplied by Taipower.
The key point is that nobody in Taiwan has ever espoused that solar energy should replace traditional power generation. Nevertheless, President Ma Ying-jeou has put renewable energy development on a priority list, and the Legislative Yuan lent its support by passing the act.
Secondly, since the rates at which the government purchases solar power or other renewable electricity from the private sector were determined by the Ministry of Economic Affairs, should the ministry be blamed for the "unreasonably high" rates?
In any case, traditional electricity has been available at rates that were far too low -- among the lowest in the world. Who decided these low rates and why has no official had the guts to raise them?
For industrial electricity rate: the average rate in Taiwan is $0.055 USD per kwh, $0.136 USD in Japan, $0.078 USD in United Kingdom, and $0.058 in South Korea. For other developed countries, it is $0.056 USD per kwh in Canada, $0.053 USD in France and $0.052 USD in United States. China still has the lowest electricity rate among these industrial countries with the rate of $0.032 USD per kwh.Residential electricity rates are 40% higher in Taiwan than industrial rates. This policy is meant to subsidize industry and has been in place since the 1950s. Another comparison in this review of wind power prospects in Taiwan (from the Institute of Nuclear Energy Research) similarly has Taiwan comparatively lower than many countries, but only slightly lower than Korea and a little higher than China.
Low electricity costs have all sorts of nasty effects. They encourage the development of electricity-intensitive industries such as metals processing that are often huge polluters. They discourage the adoption of conservation practices, since electricity is too cheap to conserve. Once the public becomes accustomed to them they hold rising prices against the party that raises them, meaning politicians shy away from price adjustments. Because the public demands low prices, the government chooses coal, whose costs are enormous but whose nominal price is low, as its fuel. The low price is the key factor holding back Taiwan's renewable development:
Analysts say the low price that state-run Taiwan Power Co (Taipower) pays for renewable energy makes it difficult if not impossible to make new wind and solar farms profitable.Power prices in Taiwan are set by Taipower, which is under the Ministry of Economic Affairs. The irony of this short-sighted anti-renewables policy is that Taiwan has some of the world's most important solar cell makers and also possesses considerable potential for manufacturing wind energy systems. There is also some geothermal potential though the only plants here closed in 1994. Unfortunately the Developmentalist State mentality, with its preference for big dirty projects that send cash down through patronage networks to local politicians, and its abiding contempt for renewable energy, still grips Taiwan's energy and economic policy.
"Many parts of Taiwan hold large potential for solar power and other renewable energy," said Wang To-far (王塗發), a former legislator who now teaches economics at National Taipei University. "It's essential that we raise prices to support [this] industry."
A lack of government support means Taiwan's renewable energy sector lags far behind those in other industrialized countries, he said.
Data from Taipower shows that it pays an average of NT$2.38 per kilowatt hour (kWh) for wind-〝generated electricity, far below the NT$3.23 that wind energy operators say they need to break even.
The rate is also below what other countries pay to purchase 〝wind-〝generated electricity. Germany pays an average of NT$4.1 per kWh, Spain NT$3.14 per kWh and Ontario, Canada, NT$4.04 per kWh.
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