Jun 17, 20222 min read

Energy Transition in Taiwan- 20% Renewable Energy by 2025

(Picture source from Taiwan National Development Council)

Taiwan Energy Transition Goals: 20%\ 30%\ 50%

To increase the use of RE (renewable energy) and reduce reliance on fossil fuels, President Tsai proposed 2016 a target energy allocation ratio of 20% RE, 30% coal, and 50% Natural gas. Subsequently, the Ministry of Economic Affairs in Taiwan also proposed the direction of energy development, including the goals of "Developing RE, Increasing the use of natural gas, Reducing the use of fossil fuels, and ending the use of nuclear energy" to ensure a stable electricity supply, while reducing air pollution and carbon emissions.

Expert Insight

With only three years left until 2025, however, many experts associated with the energy market are not optimistic about energy policy, which can be divided into three main challenges:

Challenge A： Stability of energy supply

Taiwan imports up to 97% of its energy from abroad. With the disruption of the epidemic, there has been a shortage of global energy supply, for example, massive power cuts due to coal supply and carbon reduction targets in China last year, as well as power shortage caused by a lack of coal supply in India. Yet, If Taiwan wants to achieve 50% reliance on natural gas for energy by 2025, whether it can ensure the stability of international supply is a major issue.

Challenge B： Energy prices

In the context of Taiwan's high dependence on energy imports, with up to 97% of energy is imported from other countries(109年能源供給概況, 20221–12-24)[1]. Another potential concern will be the burden of fluctuating caused by international energy prices. In the short term, this cost will be borne by the government, but it is not a long-term solution, and will eventually be borne by all the people and the enterprises.

Challenge C： Electricity consumption continues to grow

From the annual electricity sales data, Taiwan's overall electricity consumption has been increasing year by year from 217.2 billion kWh in 2017 to 235.3 billion kWh in 2020(台灣電力歷年售電量, n.d.)[2]. The continuous electricity consumption growth makes Taiwan's electricity shortage even more serious. This also affects the feasibility of the government meeting the 2025 energy use target.

How do corporations purchase renewable energy?

Corporate procurement of renewable energy is increasingly becoming a form of ESG performance. However, with the demand for RE exceeding supply in Taiwan, how should companies achieve their own RE goals?

Solution A： REC (Renewable Energy Certificate) Procurement