December 2023
Luke Hung and Angel Li
The Ministry of Economic Affairs (hereinafter, the “MOEA”) of Taiwan promulgated the Amendments to the Regulations for the Management of Setting Up Renewable Energy Power Generation Equipment of Power Users Above a Certain Contract Capacity (commonly known as the “Large Electricity User Provisions”) via the Jing-Neng-11258024060 Directive of October 17, 2023 to revise the definition of energy storage equipment and specifically stipulate that the electrical energy stored in energy storage equipment shall be used by compulsory user of renewable energy, including the energy storage demand response measures for compulsory user of renewable energy that participate in energy storage demand response programs of the electricity retailing utility enterprise.
Renewable energy obligations of large electricity users
The Large Electricity User Provisions are regulations formulated by the MOEA pursuant to the mandate under Article 12, Paragraph 4 of the Renewable Energy Development Act, which stipulates the renewable energy obligations assumed by large electricity users under the Act. Electricity users who sign an electricity contract with a capacity of 5,000 kilowatts or more are obligated renewable energy users and should fulfill their obligations by choosing one or a combination of the following three methods, or paying a monetary substitution:
1. For the installation of renewable energy power generation equipment, the power generation amount must reach 10% of the electricity contract capacity.
2. For the purchase of renewable energy electricity and certificates, the annual purchase amount is calculated by multiplying the electricity contract capacity by 10% and the electricity sold each year in kilowatts for the selected renewable energy category (solar photovoltaic, wind power, small hydropower, biomass power generation, waste-to-power generation, and geothermal energy).
3. For the installation of energy storage equipment, the energy storage capacity is calculated by multiplying the electricity contract capacity by 10% and the minimum power supply time, which is 2 hours.
In addition, according to the statistics released by the Bureau of Energy of the MOEA in January 2023, 43.6% of large electricity users have set up renewable energy power generation equipment, 52% have purchased renewable energy electricity and certificates, and only 4.4% have set up energy storage equipment.[1] Since stored electrical energy can only be provided for self-use, it may affect the willingness of large electricity users to set up energy storage equipment. To avoid idle energy storage equipment and increase the willingness of large electricity users to set up energy storage equipment, the MOEA has used electricity bill deductions as an incentive to promote the participation of energy storage equipment in Taipower’s grid dispatch.[2] According to Taipower’s Trial Plan for Energy Storage Demand Response Measures for Compulsory User of Renewable Energy, users can choose an electricity bill deduction rate in either the obligated hour type plan or the cumulative feedback type plan so that an electricity bill deduction may apply to energy storage equipment from which electricity is discharged during a specified period. The MOEA pointed out that the measures for the participation of energy storage equipment in demand response are expected to be formally taken in 2024. The Amendments to the Large Electricity User Provisions also specifically stipulate that large electricity users and their energy storage equipment working with the discharge of electricity during a specified period for the utility electricity retailing industry are not deemed to generate profits from the sale of energy storage system capacity or electrical energy.
[1] News released by the MOEA may be accessed at: https://www.moea.gov.tw/MNS/populace/news/News.aspx?kind=1&menu_id=40&news_id=104212.
[2] News released by the MOEA may be accessed at:https://www.moea.gov.tw/MNS/populace/news/News.aspx?kind=1&menu_id=40&news_id=104364.
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