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Bringing wind energy to Taiwan

On 2 September the ECCT's Energy & Environment committee hosted a lunch on the subject of wind energy development in Taiwan with special guest speaker Dr Karl-Eugen Feifel, Chairman of the InfraVest Wind Power Group. Feifel gave an overview of challenges and prospects for wind energy in Taiwan.

Taiwan's power supply is controlled by state-owned Taiwan Power Company (Taipower). The company still runs most of Taiwan's power plants but since the 1980's has outsourced a portion of power generation to privately-owned independent power producers. According to Feifel, IPPs now supply 20% of Taiwan's power needs. Infravest and Taipower together currently produce most of Taiwan's wind energy of about 600 megawatts (mw), with each company contributing approximately equal shares.

According to Feifel, Taipower's total costs currently amount to approximately NT$3.2 per kilowatt hour (kwh) but the company currently recoups only about NT$2.6 per kwh from users. Given that the company has been operating at a loss for several years and needs to plug the gap, electricity prices have been raised.

Taiwan's electricity prices are among the lowest in the world. By comparison, the price for Italian consumers is NT$9.6/kwh and NT$4.4 for German consumers. Currently onshore wind generation is reimbursed at NT$2.6/kwh compared to NT$3.5 for natural gas. At this price, wind power is almost as cheap as the cheapest fossil fuel, coal.

Taiwan has great potential to generate a lot more wind energy. According to Feifel, there is potential to install enough turbines to generate 5,000 mw of power in the medium term and 10,000 mw in the long term. The potential for offshore wind generation is even greater – 10,000 mw in the medium term and 30,000 mw in the long term, according to Feifel. The government understands the potential but for various reasons has not taken sufficient action to realize the potential, according to Feifel. The government's current targets for wind power capacity are extremely low but given that no plans are in place to meet the targets, it is doubtful that even the unambitious targets will be met.

It is extremely difficult for private wind energy firms to make a profit at the current reimbursement price and thus attracting more private investors is especially difficult. An alternative would be to allow private wind energy providers to sell their power directly to consumers but this is currently not permitted.

Another issue deterring foreign investors is the highly bureaucratic environment. Rules and procedures governing wind energy providers are the same as those for nuclear energy, according to Feifel. Feifel also expressed concern about importing equipment from overseas if Taiwan does not adopt international standards and practices.

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