Green Power and Agriculture in Taiwan

Green Power and Agriculture in Taiwan

MIN-JU YANG(China Productivity Center Agricultural Innovation Department)

Energy transformation has been a major policy in recent years. The "green power" refers to the power generation process with close-to-zero CO2 emission and thus low impact on the environment. Most world-class enterprises are members of RE100, the international renewable energy initiative organization, which demands the use of 60% of renewable energy by 2030, and 100% by 2050. Three enterprises in Taiwan, including M&R Nano Technology, TCI (大江), and O’Right (歐萊德) are its members. Its procurement regulations also demand a certain proportion of production being by green power. The supply chain for the Apple Inc. including TSMC, Pegatron, Quanta, Compal, Hon Hai Technology Group, etc., for instance, may be faced with the dilemma of either withdrawing from the supply chain or making purchase of the green power at an extremely high price, a hard decision to strike a balance.

There is the "clause for high power consumers", which stipulates that power consuming enterprises with contract capacity of 5000KW or above must switch at least 10% of their power consumption to green power within five years, in order to stimulate the "renewable energy certificates" transaction. This system is managed and regulated by the Bureau of Standards, Metrology and Inspection (BSMI) of MOEA. All registration applications shall be filed with BSMI. Each certificate represents 1KW of green electricity, at a floating value between NT$1,000 and NT$3,000 per 1KW. The current regulations do not mandate transaction under the official mechanism, so enterprises can directly make purchase from solar power producers at prices mutually agreed upon, and have the power transmitted through the Taipower grid. Some large enterprises have their own subsidiaries produce the solar power. The cost per KW is about NT$750 or even lower, subject to the scales of capacity and sunshine conditions. Take TSMC for example, the green power purchased per year is 1.2GW, more than the capacity of a nuclear power unit. At NT$1,000 per KW, the total cost is NT$1.2 billion per year. Lowered cost on purchase of green power would definitely mean further enhancement of competitiveness.

Regarding the development of green power in Taiwan, solar power and wind power are the two major areas. The limited space and high population density have been unfavorable to wind power generation. Nearly all the offshore wind power generation is operated by TSMC by contract (hence the high growth rate). The current focus of the goals and practice of green power is on solar power. The targets set for 2025 were to have 6GW of solar power produced on rooftops and 14GW on grounds. Earlier this year, Deputy Premier Shen Jong-chin announced to raise the rooftop green power production to 8GW, which means reducing the ground-based production to 12GW. This has manifested the fundamental problem of ground-based power production and the impact on the original ecological, aesthetic, or agricultural development. The main reason is that solar power producers seized large amount of agricultural land. For instance, the ordinary annual rent of aquatic ponds in Qigu area is about NT$30,000 to 50,000 per 1/10 hectare, but some solar power producers offer NT$350,000 to 400,000 annually to use the space. This has made it highly unlikely to promote the MOEA policy of "multiple use of land", and has actually deprived farmers and fishermen of the opportunities to rent space for farming purposes. Agricultural land is relatively low in price and comes in large lots, so it is more cost effective for large-scale power generation. Some solar power producers even make fake applications to avoid agricultural regulations. This has led to the strong sentiment of the general public to impose the strict environmental assessment of the solar power producers.

For similar reasons, the original plan to turn the land of Taiwan Sugar Corporation to solar farm has been suspended. Review on ground-based solar power generation is now limited to only salinized land or otherwise unfavorable for farming. Ground-based solar power generation is adopted as supplement only if it does not affect the original functions of the land. The roof-top solar power production has relatively lower impact on the environment, so it requires ecological inspections only rather than environmental assessments. It is currently the prime target of deploying solar power production facilities.

In the agricultural sector, the Agriculture and Food Agency has taken the lead in counting a total of 210,000 cases of roofs of agricultural storage and marketing facilities like warehouses, cold chain logistics centers, etc., in all counties and cities in Taiwan. The capacity of grid-connected power generated has reached 14.6MW in 2020. Projects under construction would add 47.4MW, and potential cases may even reach the capacity of 61.3MW. This indicates the suitability and prospect of rooftop solar power production in collaboration with the agricultural industry. New problems, however, also rise. The ground-based PV system installed on the farmland was the main type of power generation, and there were just a few large cases to work on before. However, the current roof-top cases are over 2000 in number, with an average of less than 30KW per case. Compared with the usual power generation of 100KW per case in the past, the return of investment may be so low as to make major operators reluctant. Operators usually have little relevant information to help with the installation on small cases. On the other hand, the power transmission must be carried out by Taipower for basic feeder layout. In many areas, however, there is no feeder or the feeder capacity is full. It is recommended that all the stakeholders conduct rolling inventory and provide hotspots for the operation of Taipower, and perform "feeder hosting capacity reservation" (饋線容量保留).

For the reluctance of the solar power operators, information like the total area of potential cases such as local agricultural facilities, fish farms, and livestock farms can be disclosed so that both sides of the supply and demand can meet for open communication and negotiation to avoid misunderstanding. As for the owners of agricultural facilities, their reluctance may be of several reasons. The first is the lack of confidence in the solar power operators. This can be solved by the aforementioned arrangement of meetings and information exchange events. Secondly, the application procedure may be tedious. Some facility owners may be discouraged by the red tape involved, for instance, provision of supplementary documents or improvement of the on-site facilities. It is therefore recommended to have dedicated offices set up to help with the preview of the eligibilities, screening of objects, and processing through contract procedures. This may help speed up the progress of the matching and avoid disputes, and then practical measures can be taken and ultimately achieve the policy goals and meet the future trends.